DEMARCHE RESPONSE: CENTRAL GOVERNMENT BUDGET TRANSPARENCY

UNCLAS KABUL 003402 SENSITIVE SIPDIS DEPT FOR EEB/IFD/OMS - SAUNDERS AND SCA/A - JEA TREASURY FOR JCASAL, ABAUKOL, AWELLER, AND MNUGENT E.O. 12958: N/A TAGS: EAID ECON EFIN PREL PGOV AF SUBJECT: DEMARCHE RESPONSE: CENTRAL GOVERNMENT BUDGET TRANSPARENCY REF: (A) STATE 81177 (B) STATE 288885 (C) KABUL 2812 ¶1. (SBU) Deputy Finance Minister Mastoor responded October 20 to the demarche on budget transparency (Ref A),expressing appreciation for Afghanistan's FY-2009 waiver of the Foreign Appropriations Act's prohibition on assistance to "a central government that does not make its national budget, both income and expenditures, publicly available on an annual basis." He noted, however, his Ministry annually publishes the Afghan national budget on a publicly available website www.budgetmof.gov.af/nationalbudget/budget/bu dget.html in three languages: English, Pashto, and Dari. In addition, Mastoor said the Finance Ministry also posts mid-year reviews of the national budget (reconciling expenditures with the budget ceiling), the MOF's Treasury Department execution and disbursement reports, and end-of-the-year closing account and audit reports on its web site. Responding to the point that the Ministry might also post national budget documents in government offices and other public places, Mastoor said he would consider the suggestion. ¶2. (SBU) Mastoor acknowledged his Ministry must refine its budgetary submissions further to meet international transparency and internal controls standards. He stressed the Finance Ministry is seeking the reinstatement of Article 61 of the Public Finance and Expenditure Management Law to permit his Ministry to audit line ministries (Ref C). Mastoor predicted the issue would be resolved in the next few weeks, thereby strengthening the Ministry's oversight powers. Mastoor added that the MOF is considering adopting a performance review system that would report both disbursements to line ministries and the actual performance outcomes of those disbursements. Deputy Minister Mastoor said he would soon request USAID and World Bank assistance in implementing this performance-based budgetary reporting system so that it could encompass as well provincial and district-level offices. EIKENBERRY