US embassy cable - 04DJIBOUTI1516

C O N F I D E N T I A L DJIBOUTI 001516 
 
SIPDIS 
 
TREASURY FOR OASIA/MDM (J. FRANCO); STATE FOR EB/IFD/OMA 
(L. GALLAGHER) 
 
E.O. 12958: DECL: 11/22/2014 
TAGS: EFIN, EAID, MASS, DJ, MAAR 
SUBJECT: DJIBOUTI: TRANSPARENCY OF BUDGETS/MILITARY SPENDING 
 
REF: SECSTATE 239929 
 
Classified By: Pol/Econ Erinn C. Reed for reasons 1.4 (b) and (d). 
 
A. General Overview of Auditing Procedures: 
 
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