President of Maldives Ibrahim Mohamed Solih on Wednesday, 15th March, ratified the seventh amendment to the Public Finance Act (Law No. 3/2006).
The Maldives Parliament passed the bill at its 10th sitting of the first session, held on 27th February 2023.
The amendment seeks to strengthen procedures of;
- Acquiring loans
- Issuing guarantees
- Disbursing special assistance from public funds
- Tracking public finances
- Drawing up the state budget
The amendment outlines the guidelines on the management of the Sovereign Development Fund (SDF) 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.
In addition to this, the amendment also adds a separate chapter on sovereign guarantees and outlines the provisions to waive or permit leniency on payments owed to local councils.
The bill also includes requirements for opening and administering a custodial account at the Maldives Monetary Authority (MMA) as a Sovereign Development Fund to ensure long-term investment of state finances, debt repayment, and increase state revenue.
The amendment also necessitates the formation of a new government position; Accountant General, tasked with managing public funds and specifies the competencies and responsibilities of the job.
Moreover, the bill 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 penalizing those who violate the law.
The amended Act has been published in the Government Gazette and has come into effect.
