1. (U) Expenditures by the Djiboutian military are audited on
a yearly basis by the Chambre des Comptes (the Public
Accounts Auditing Board). The audit is limited to accounting
books and other financial documents. Audits of military
budgets are reported only to the President of the Republic,
who is also the Supreme Commander of the military forces.
The President is the only civilian authority that receives
the audit of military expenditures.



2. (U) A standard procedure for conducting annual audits
exists, though it is not mandated by government policy or
legislation. Judges from the Chambres des Comptes work with
the Administration and Finance Direction of the Armed Forces,
Gendarmerie, and the police in reviewing the accounting
books. No audit is done on military bank accounts of petty
cash funds. The Republican Guard's budget comes directly from
the Presidency and is not audited.



3. (U) The Minister of Finance is responsible for settling
the military budget. The President finalizes the military
budget with the advice of his Chief of Defense. All
expenditures are co-signed by the Minister of Finance and the
President's Chief of Defense. However he has little power to
verify what funds in the military budget are spent on since
the army budget is a discretionary power of the President.



4. (C) Comment: It is generally understood that the
government is unwilling to be transparent in the creation and
use of military budgets for what it describes as security
reasons. The capacity to audit the military expenditures does
exist within the framework of the Chambres des Comptes.
However, due to the sensitive nature of military affairs in
Djibouti, the annual review seems to be more a theoretical
verification than an actual audit.



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



5. (U) The military budget for 2004 totals 5.5 billion DF (30
million USD) and provides for the Armed Forces and the
Gendarmerie. The National Police Force is funded from the
budget for the Ministry of Interior. Off-budget receipts are
not significant and are not audited.



C. The Military Component of the National Budget:



6. (U) The military budget makes up 19.5 percent of the total
government budget. The military budget is second largest
portion of the total state budget. Education comprises the
largest portion of the state budget. Due to the large budget
given to the military, political leaders turn to the armed
forces to back public services, such as emergency medical
services, air transport of civilians without access to the
capital, and high-speed military boats used for medical
evacuations from the northern regions.



7. (U) The National Assembly devotes one of its two yearly
sessions entirely to budgetary concerns. Debates on budget
priorities are televised nationally. However, input from the
Parliamentarians is rarely taken into consideration.
RAGSDALE