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Cablegate: Fy 2003 Transparency and Accountability

This record is a partial extract of the original cable. The full text of the original cable is not available.

UNCLAS SECTION 01 OF 03 COLOMBO 001027

SIPDIS

STATE FOR SA/INS

STATE FOR EB/IFD/OIA

E.O 12958:N/A
TAGS: AA AMGT EAID EFIN EINV EPET ETRD MV ECPN
SUBJECT: FY 2003 TRANSPARENCY AND ACCOUNTABILITY
SURVEY - MALDIVES

REF: STATE 100283

1. Post response for Maldives to reftel survey
request follows:

a. Does host government publish national budget in a
timely manner?

1 - Does not publish, or publishes with significant
delay (three years or more)
2 - Yes, with some delay (one year or more)
3 - Yes, with minimum delay (under one year)

ANSWER: 2 - YES, WITH SOME DELAY (ONE YEAR OR MORE)

b. Where subnational levels of government are
significant, are their combined fiscal position
published?

Yes/No.

ANSWER: NOT APPLICABLE (NO SUBNATIONAL LEVELS OF
GOVERNMENT)

c. In what form is national budget published?
Government publication or newspaper? Private media?
Internet? Other? Please indicate.

ANSWER: GOVERNMENT PUBLICATION.

d. Please rate the quality and comprehensiveness of
fiscal data published.

1 - No adequate system of budget reporting and
monitoring and no adequate classification system.
There are significant payments arrears, and actual
expenditures often deviate significantly from amounts
budgeted

2 - Limited system of budget reporting and monitoring
with limited classification system. Some payments
arrears and deviations between actual expenditures and
amounts budgeted

3 - Excellent system of budget reporting, monitoring
and a consistent classification system. No payments
arrears and actual expenditures equal amounts budgeted

ANSWER: 1 - No adequate system of budget reporting
and monitoring and no adequate classification system.
There are significant payments arrears, and actual
expenditures often deviate significantly from amounts
budgeted

e. List up to 5 key laws and/or regulations governing
public disclosure of revenues and expenditures in the
national budget, if applicable and such laws exist.

ANSWER:
1. Constitution of the Republic of Maldives, 1997
2. Financial Regulations.

f. Assess adequacy of those laws and regulations
establishing fiscal transparency and accountability
requirements.

1 - Wholly inadequate
2 - Some recognition and legal foundation, if spotty
3 - Detailed/comprehensive

ANSWER: 1. Wholly inadequate

g. Assess extent to which laws and regulations on
fiscal transparency and accountability are implemented
and enforced.

1 - Not enforced
2 - Sporadically/unevenly enforced
3 - Fully enforced

ANSWER: 2 - Sporadically/unevenly enforced

h. How would distribution of tax powers and
expenditure responsibilities of central government be
described?
1 - Unclear
2 - Currently being clarified
3 - Clear and supported by open and stable
intergovernmental transfer mechanisms

ANSWER: not applicable. The Government structure is
based on a unitary central government.

i. Does a national audit body or equivalent
organization, independent of the executive, provide
reports for the legislature and the public on the
financial integrity of government accounts?
Yes/No

ANSWER: NO. NATIONAL AUDIT BODY IS APPOINTED BY THE
EXECUTIVE (PRESIDENT) AND REPORTS TO THE PRESIDENT AND
IS OBLIGED TO ACT ON THE ADVICE OF THE PRESIDENT.

j. How would the link between non-financial
public/state-owned (e.g. extractive industries)
enterprises and general government be described?

1 - Poor with semi-independent spending/procurement
authority of non-financial public enterprises
2 - Limited independence of spending/procurement
3 - Clear control under central government budget
process

ANSWER: 2 - Limited independence of
spending/procurement


k. Are privatization processes transparent and
published?

1 - No or limited
2 - Moderately transparent
3 - Fully transparent and comprehensively reported

ANSWER: MODERATELY TRANSPARENT

l. How would the reliability of budget revenue and
expenditure estimates best be described?

1 - Unreliable
2 - Moderately reliable
3 - Very reliable

ANSWER: MODERATELY RELIABLE

m. Please provide a short evaluative narrative of
host government commitment to fiscal transparency and
accountability (not to exceed two or three
paragraphs).

Maldives government is praised for good economic
management and generally prudent macroeconomic
management. Nonetheless weaknesses in budget process
have been identified. The existing budget process and
public accounting system was introduced more than
three decades ago and is subject to a number of
constraints. The budget papers are usually prepared
in December of each year for submission to the
Parliament and comprise the past year's performance,
current years status and proposed future budget
proposals. The financial legislative framework is not
comprehensive. Under the current legislative
framework, no annual financial statements regarding
the government's financial position and status are
reported to the parliament and no audited financial
statements are prepared. The annual accounts and
information are included in the budget papers. In
fact, no policies identify the ownership and
responsibility for the accounting function, and
provide for a data entry system. Only a limited
accounting reporting structure exists. Not all
transactions are reflected. The accounting system
used in atolls is highly inefficient, leading to
excessive holdings and movements of cash.

Maldives Constitution gives broad powers to the
executive branch in performing most of the core
functions relating to public expenditure and budget
management, planning, execution, monitoring and
evaluation. The power of budget approval rests with
the legislature. Currently, the President is also the
Finance Minister.

The Auditor General is appointed by the President and
reports to the President. The Constitution provides
for certain accounting functions of the State to be
performed by the Auditor General. However, the
Auditor General is obliged to act on the advice of the
President in this regard. Accordingly, ultimate power
and authority for determining the manner and form of
public accounting system, under the constitution,
rests with the President.

Three key bills including a new public finance act,
amendments to the audit act and the public enterprise
act have been drafted to define the legal framework
for an improved budget process.

n. Please list U.S. government-sponsored programs and
activities that promote accurate disclosure of
revenues and expenditures in the national budgets of
your host country. Please also summarize the results
of those programs and activities (not to exceed two or
three paragraphs).

There are no US Government sponsored programs. ADB
and the World Bank are trying to promote budget
practices and improve financial reporting,
transparency and accounting. ADB has approved a
project for strengthening Public Accounting Systems.
WB has provided training assistance in Public
Expenditure Management.

End Questionnaire.

WILLS

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