President Ibrahim Mohamed Solih on Wednesday ratified the seventh amendment to the Public Finance Act (Law No. 3/2006). Parliament passed the bill at its 10th sitting of the first session, held on February 27, 2023.
The amendment seeks to strengthen procedures for acquiring loans, issuing guarantees, disbursing special assistance from public funds, tracking public finances, and drawing up the state budget. The amendment outlines guidelines on the management of the Sovereign Development Fund and public procurement mechanisms, resolves challenges to their implementation, revises the penalties for violating the law, and addresses challenges to the enforcement of the law.
The amendment adds a separate chapter on sovereign guarantees and outlines provisions to waive or permit leniency on payments owed to local councils. The bill includes requirements for opening and administering a custodial account at the Maldives Monetary Authority (MMA) as a Sovereign Development Fund to ensure the long-term investment of state finances, debt repayment, and increase state revenue. It also necessitates the formation of a position titled Accountant General, tasked with managing public funds, and specifies the competencies and responsibilities of the job.
The bill also mandates the establishment of an Internal Audit System for the state, outlines the responsibilities of the Chief Internal Auditor and the formation of a seven-member Internal Audit Committee. The bill also adds a separate chapter on the procurement system and outlines the process of penalising those who violate the law.
Following ratification, the Act has been published in the Government Gazette and has now come into effect.