MALDIVES, TRANSPARENCY OF BUDGETS/MILITARY

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