US embassy cable - 04COLOMBO1906

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