Maldives Monetary Authority (MMA) has lauded the decision of the government to introduce a regulation to follow if the expenditure allocated in the state budget for government offices exceed the amount. The new regulation yet to be passed by the parliament was published by Ministry of Finance on Monday.
Every office must ensure the budget allocated for the respective office do not exceed in expenses, according to the regulation published by finance ministry. However, in the event the allocated amount exceeds, the office can spend five percent more than the amount, with permission from the finance ministry.
Moreover, a new Public Sector Investment Programme (PSIP) project not included in the budget can only be conducted with a written permission from the finance minister and the project cost must not exceed USD 64,946. Further, if the cost of an already budgeted project increases by 30%, it can only be approved by a written permission from the president.
The aim of implementing such a regulation is to encourage completing projects within the allocated budget, spending the allocated budget for the allocated project and implementing the budget as prepared.
In a statement, MMA said within the past two years in advisories to parliament has stressed the importance of establishing a fiscal appropriation law. MMA revealed the aim of such a bill is to maintain deficit of the country as recurrent expenses when underestimated and the revenue overestimated, the deficit will increase year on year.
MMA noted, therefore, enhancing financing policy for PSIP projects is a step forward in strengthening the financial system of the country.