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Cablegate: Maldives, Transparency of Budgets/Military

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

240949Z Nov 04

UNCLAS COLOMBO 001906

SIPDIS

STATE EB/IFD/OMA:L. GALLAGHER
TREASURY FOR OASIA/MDM:J. FRANCO

E.O 12958: N/A
TAGS: ECON EFIN EAID MV
SUBJECT: MALDIVES, TRANSPARENCY OF BUDGETS/MILITARY
SPENDING

Ref: STATE 239929

1. RESPONSE TO REFTEL FOLLOWS:

A. General Overview of Auditing Procedures:

2. The Maldives has a system of public audit by the
Auditor General (AG), a civilian authority. The
Auditor General is appointed by and reports to the
President. Audit reports are also sent to the heads
of the respective agencies (auditee). The
Constitution provides for the audits of government
agencies by the AG. Accordingly, the AG audits
military expenditures and security forces
expenditure. National Security Service (NSS), under
the Ministry of Defense and National Security (MOD),
is the military arm of the Government of Maldives
(GOM). The Police force is under the Ministry of
Home Affairs (MOH). The AG performs annual audits of
NSS, MOD, Police and the MOH.

3. The audits of these institutions are carried out
according to guidelines established by the Ministry
of Finance. There is no Audit law. A new audit law
has been in drafting since 1999. The audits are not
published for public scrutiny and there is no system
to send audit reports to the Parliament. Action on
audit reports needs to be taken by the President's
office. AG can refer questionable transactions
directly or through the President's Office to the
Anti Corruption Board.

4. The effectiveness of the public audit function in
Maldives, in general, is weakened due to its close
relationship to the executive branch. Weaknesses in
the staff capacity at AG's office are also identified
as constraints and the Government has launched, with
donor support, programs to strengthen capacity of the
Audit Office. Further, both internal and external
audit functions of the Government are housed in the
AG's office and indistinguishable.

B. The Military Budget and On-Budget and Off-Budget
Revenues and Expenses

4. The Government of Maldives' defense budget
includes the budget for NSS. The expenditure of the
Police force comes under the budget of the Ministry
of Home Affairs.

C. Military Component of the National Budget

5. The Government budget includes the military
component. The power of budget approval rests with
the legislature, the People's Majlis Parliament. A
parliamentary budget debate takes place.
LUNSTEAD

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