President of Maldives Ibrahim Mohamed Solih on Wednesday, March 15, ratified the seventh amendment to the Public Finance Act (Law No. 3/2006).
Maldives Parliament passed the bill at the 10th sitting of its first session, on February 27, 2023.
The amendment sought to strengthen the procedures of acquiring loans, issuing guarantees, disbursement of special assistance from public funds, tracking public finances, and drawing up the state budget.
The amendment gives guidelines on the management of the Sovereign Development Fund (SDF) and public procurement mechanisms. The bill also seeks to resolve challenges to the implementation of the law and revises the penalties for violating it.
The bill added a separate chapter on sovereign guarantees and a separate chapter on the procurement system. The chapters outline provisions to waive or permit leniency on payments owed to local councils, and the process of penalizing those who violate the law, respectively.
Moreover, the bill includes requirements for opening and administering a custodial account at the Maldives Monetary Authority (MMA) as a Sovereign Development Fund (SDF). This has been stipulated to ensure long-term investment of state finances, debt repayment, and increase state revenue.
The amendment also mandates the formation of a new government position; Accountant General, tasked with managing public funds and specifies the competencies and responsibilities of the job.
Additionally, the bill enforces the establishment of an Internal Audit System for the state and outlines the responsibilities of the Chief Internal Auditor and the formation of a seven-member Internal Audit Committee.
The amended Act has been published on the government’s gazette and is now in effect.