Law No.

3/2006

LAW ON PUBLIC FINANCES

Introduction and 1 (a) This Law provides for the principles and procedures for
Title
control and management of the finances and property of the
State and establishes financial and other principles and
procedures related to the finances and property of the State.
(b) This Law shall be called the “Law on Public Finances.”

CHAPTER 1

PUBLIC MONEYS AND PUBLIC PROPERTY

Payment and 2 (a) No liability for any expenditure of public moneys shall be
expenditure of
public moneys incurred by any person except in the following circumstances:
(1) public moneys to meet the liability are lawfully available;
and
(2) the incurring of the liability has been authorised in
accordance with the Public Finance Regulations.
(b) No payment of public moneys shall be made by any person
except in the following circumstances:
(1) public moneys to make the payment are lawfully
available; and
(2) the payment has been authorised in accordance with
Public Finance Regulations.

Not to lend public 3 No public moneys shall be lent to any person unless the loan has
moneys except for
an approved loan been approved by the President, or the loan being of a class of loan
that has been approved by the President, has been approved by the
Minister.

Lending public 4 (a) Unless this Law or another Law states otherwise, Public
moneys as loans
moneys may be lent as loans only in conformity to and within
the limits set out in the Public Finance Regulations and only
for public purposes in accordance with the Public Finance
Regulations.
(b) For the purposes of this Law, “public purposes” means
purposes that include the following interests:
(1) The entire society or a substantial part thereof should
benefit from it;
(2) It is directly related to responsibilities that need to be
carried out by being a government;
(3) One of the main reasons for carrying it out is not
something that would amount to protecting the interests
of a particular person;
(4) It is something that would assist in attaining public
health, public security, public order, peace and
tranquility, national progress or national well-being.
(c) Loans must be given by the State in accordance with a policy
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set in a publicized fair manner. The circumstances in which a

loan granted by the State can be pardoned must be specified in
such policies.
(d) The State may provide money as a loan only with the
permission for the granting of such loan from the President.
The written application submitted for permission from the
President for the granting of a loan must include the reason for
granting the loan, the principal amount of the loan, interest
rate, other charges if any, and the procedure for the repayment
of the loan.
(e) Where payments are not made regularly for the repayment of a
loan granted by the State, the Minister must take all available
measures in the matter.
(f) The Minister shall, as per the Public Finance Regulations,
maintain information and statements concerning any public
moneys being lent as a loan or which had been lent as a loan to
any person by the State.

Borrowings and 5 (a) Any application to borrow money by or on behalf of the State
guarantees by the
State or to give a guarantee by the State shall be made and
submitted to the Minister in accordance with the Public
Finance Regulations.
(b) Upon receipt of an application by the Minister as stated in
subsection (a) of this section, it shall be the responsibility of
the Minister to attend to matters relating to such borrowing as
required by the Law.
(c) Money may be borrowed by the State and guarantees may be
given by the Government only as maybe determined by the
President in accordance with the Constitution, upon
submission by the Minister having considered the effects and
the consequences to the economy of the country and to public
finances of such borrowing or giving of such guarantee.
(d) If money is borrowed by the State, the principal amount
borrowed, the interest accruing for the same and other
expenses of borrowing the money, must be paid from the
Consolidated Revenue Fund as appropriated and passed in the
budget.
(e) Each time money is borrowed by the State as per subsection
(c) of this section, information relating to the borrowing shall,
within 30 days from the date of the borrowing, be sent to the
People’s Majlis by the Minister.
(f) The information sent to the People’s Majlis pursuant to
subsection (e) of this section shall state the purpose of the
borrowing, benefit to society, the principal amount borrowed,
the interest accruing for the same and other expenses of
borrowing the money. A copy of the report on the study
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relating to the borrowing shall also be sent to the People’s

Majlis.

Loans and 6 The Minister shall, according to procedures laid down by the
guarantees to be
recorded Auditor-General, establish and maintain a written record and
account of moneys borrowed by the State and any guarantee,
indemnity or undertaking given by the State.

Sale of and dealing 7 Public property may be given, sold, leased, disposed of, mortgaged
with public
property to be or destroyed only in accordance with this Law and regulations made
authorised hereunder, in a manner determined by the President upon a
recommendation made to the President by the Minister. All such
acts shall be carried out by the accountable officer designated under
this Law in every government agency.

Payments after 8 If an account for goods or services supplied in a financial year is

end of financial
year presented for payment to the Minister within 30 working days after
the end of that financial year, the Minister may approve the
payment of that account from moneys appropriated in the budget
for that financial year or from the Advance Fund in accordance with
subsection 23(a) of this Law.

Writing off 9 The amount of any loss of or deficiency in public moneys, or any
irrecoverable public moneys, or the value of any lost, destroyed,
damaged or obsolete public property, may be written off by the
Minister, according to procedures laid down by the Auditor-
General, after having recorded it in the appropriate accounts and
having obtained the approval of the President.

Grace payments 10 (a) Payments may be made from public moneys to a person or
party as a grace payment in a manner that does not amount to a
payment for a liability under law or a payment for a legal
obligation.
(b) A payment may be made as a grace payment from public
moneys to a person or to a party under subsection (a) of this
section only if making of a contribution by the State to the
person or party in loss or misfortune is deemed just or of
social interest by the Government. Alternatively, such a
payment may be made, if salvaging a person or a party in
financial difficulty is, in addition to being in the interest of an
appropriate percentage of the public, deemed by the
Government to be the most fair and just course of action in the
circumstance.
(c) Any grace payment under subsections (a) and (b) of this
section shall be made in accordance with the Public Finance
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Regulations by the Minister, under instructions from the

President or with the approval of the President.
CHAPTER 2

PUBLIC BANK ACCOUNT

Opening of Public 11 All public moneys must be kept in the Public Bank Account,
Bank Account
opened and maintained by the Minister and held with the Maldives
Monetary Authority. On islands where no branch of the Maldives
Monetary Authority exists, public moneys must be kept in a bank
with which an account is held by the Maldives Monetary Authority.
On islands where no such bank exists, public moneys must be kept
in an account opened and maintained in accordance with section 12
of this Law. On islands where no such account exists, public
moneys must be kept in a manner that provides safe custody of the
same.

Opening of an 12 (a) On islands where neither a branch of the Maldives Monetary

account with
Maldives Authority nor a bank with which an account is held by the
Monetary Maldives Monetary Authority exists, a government agency
Authority or with may open an account under section 11 of this Law with the
another bank
written permission of the Minister. Such permission shall be
given by the Minister only in the following instances:
(1) the agency applying to open an account is an agency
operating on an island where neither a branch of the
Maldives Monetary Authority nor a bank with which an
account is held by the Maldives Monetary Authority
exists; or
(2) the Minister is satisfied that the account is needed to hold
grant aid or loan assistance moneys under the terms of a
grant aid or loan assistance agreement and moneys that
do not include public moneys.
(b) A bank account opened under subsection (a) of this section
must not be overdrawn.

Deposits into the 13 All public moneys collected or received, other than an advance
Public Bank
Account from a Public Fund, must be deposited into the Public Bank
Account. If the money is collected or received on an island where
there is no branch of the Maldives Monetary Authority, such money
must be deposited in a bank with which an account is held by the
Maldives Monetary Authority. A government agency operating on
an island where there is no such bank shall deal with such money in
accordance with section 11 of this Law.

All deposits into 14 All deposits into the Public Bank Account, except deposits of the
the Public Bank
Account to be principal of public moneys that have been invested under subsection
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accounted for 16(a) of this Law, must be accounted for in accordance with
procedures laid down by the Auditor-General and details thereof
shall be included in the accounts of Public Funds.

Withdrawals from 15 (a) No public moneys shall be withdrawn from the Public Bank
the Public Bank
Account Account except in the following circumstances:
(1) To invest, in accordance with this Law, public moneys
that are not needed immediately as per section 16 of this
Law; or
(2) in accordance with a warrant authorizing expenditure
from the Consolidated Revenue Fund as per section 20 of
this Law; or
(3) in accordance with a warrant authorizing expenditure
from the Loans and Capital Works Fund as per section 22
of this Law; or
(4) from the Advance Fund in accordance with
subsection 23(a) of this Law; or
(5) from the Trust Fund in accordance with the trust
statement of a trust account.
(b) All withdrawals from the Public Bank Account, except
withdrawals made under subsection 16(a) of this Law, must be
accounted for in accordance with procedures laid down by the
Auditor-General and details thereof shall be included in the
accounts of Public Funds.
Investment of
moneys in the 16 (a) The Minister may withdraw from the Public Bank
Public Bank Account any public moneys that are not needed
Account that are immediately and invest them, in accordance with
not needed
immediately international financial security standards, in any of the
following ways —
(1) in securities issued or guaranteed by a foreign
government or an international financial institution;
(2) by placing the moneys on deposit with a bank approved
by the Board of Directors of the Maldives Monetary
Authority.
(b) The Minister must maintain accounts of the public moneys
invested under subsection (a) of this section in accordance
with procedures laid down by the Auditor-General.
(c) Any interest received from investments made under subsection
(a) of this section must also be deposited into the Public Bank
Account and must be dealt with in accordance with section 30
of this Law.

Warrants 17 (a) Expenditure from the Public Bank Account of public moneys
in the Consolidated Revenue Fund or the Loans and Capital
Works Fund can be authorised only by the issuance of a
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written warrant signed by the Minister.

(b) The warrant stated in subsection (a) of this section must only
be issued for an expenditure appropriated in the passed budget.
(c) The warrant stated in subsection (a) of this section must be
issued at the beginning of each financial year. Only one such
warrant shall be issued per year.
(d) The total expenditure authorised to be paid from the
Consolidated Revenue Fund or the Loans and Capital Works
Fund in a financial year by the warrant stated in subsection (a)
of this section must not exceed the total expenditure
appropriated in the budget from that Fund for that financial
year.
(e) A warrant issued as per subsection (a) of this section for a
passed budget shall not be used for an expenditure once the
said budget ceases to have effect except as provided in section
8 of this Law,

CHAPTER 3

Public Funds

Accounting 18 (a) The Minister must establish and maintain, in accordance with
records for Public
Funds procedures laid down by the Auditor-General, accounting
records for the following Public Funds:
(1) the Consolidated Revenue Fund;
(2) the Loans and Capital Works Fund;
(3) the Advance Fund;
(4) the Trust Fund.
(b) The sum of the amounts in the Public Funds must equal the
sum of the public moneys in the Public Bank Account and any
moneys that are invested under section 16 of this Law.

Payments into the 19 Unless another Law states otherwise, all public moneys must be
Consolidated
Revenue Fund paid into the Consolidated Revenue Fund except the following:
(a) public moneys collected, received or held by a government
agency on an island where neither a branch of the Maldives
Monetary Authority nor a bank with which an account is held
by the Maldives Monetary Authority exists or by a
government agency operating overseas;
(b) public moneys that section 21 of this Law states must be paid
into the Loans and Capital Works Fund;
(c) public moneys that section 24 of this Law states must be paid
into the Advance Fund;
(d) public moneys that subsection 27(a) of this Law states must be
paid into accounts in the Trust Fund;
(e) public moneys that section 30 of this Law states must be paid
into the Interest Suspense Account.
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Payments from the 20 (a) Public moneys must not be paid from the Consolidated
Consolidated
Revenue Fund Revenue Fund except in the following circumstances —
(1) in accordance with the budget passed by the People’s
Majlis for that year; or
(2) in accordance with a Law that requires payments to be
made out of the Consolidated Revenue Fund; or
(3) for the purposes of making refunds of public moneys in
accordance with the Public Finance Regulations.
(b) Public moneys must not be paid from the Consolidated
Revenue Fund unless a written warrant authorising
expenditure is obtained.
Payments into the 21 The following public moneys must be paid into the Loans and
Loans and Capital
Works Fund Capital Works Fund —
(a) All moneys that are appropriated in accordance with the Public
Finance Regulations to the Loans and Capital Works Fund
from the Consolidated Revenue Fund for the purposes of
being lent by the State, in accordance with the Public Finance
Regulations, for public purposes stated in subsection 4(b) of
this Law and for capital works.
(b) Repayments of the principal of loans made from the Loans and
Capital Works Fund.
(c) Moneys from any sale of public property.
(d) Moneys received as unconditional grant assistance for capital
works by any person, including an international agency;
(e) Moneys borrowed by, or loaned to, the State by any person
whether for capital works or otherwise.

Payments from the 22 (a) Public moneys may be paid from the Loans and Capital Works
Loans and Capital
Works Fund Fund only in accordance with a passed budget.
(b) Public moneys must not be paid from the Loans and Capital
Works Fund except in accordance with a written warrant
authorising expenditure.
(c) If public moneys are paid into the Loans and Capital Works
Fund for a specific purpose, such moneys must not be paid
from the Fund except for that purpose.

Payments from the 23 (a) Payments may be made from the Advance Fund only for the
Advance Fund
following purposes—
(1) to make advances for the temporary financing of public
services and capital works and to government agencies
on islands where neither a branch of the Maldives
Monetary Authority nor a bank with which an account is
held by the Maldives Monetary Authority exists or to
government agencies operating overseas;
(2) to make payments where an urgent and unforseen need
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for a payment of public moneys arises; and

(3) to make payments where the payment can not lawfully be
made from any other of the Public Funds.
(b) If any payments are made from the Advance Fund in
accordance with subsection (a)(2) and subsection (a)(3) of this
section, the Minister must include, in the budget for the next
financial year, or in an addition to an already passed budget,
an appropriation from the Consolidated Revenue Fund or the
Loans and Capital Works Fund or both of public moneys, to
the Advance Fund to repay those payments.
(c) Public moneys must not be paid from the Advance Fund for
any of the purposes stated in subsection (a) of this section
unless a written authorization of the Minister is obtained and
except in accordance with such authorization.

Payments into the 24 The following public moneys must be paid into the Advance
Advance Fund
Fund —
(a) Repayments of advances made from the Advance Fund under
subsection 23(a)(1) of this Law;
(b) Moneys appropriated and passed in the budget as stated in
subsection 23(b) of this Law to repay any payments made
from the Advance Fund under subsection 23(a)(2) and
subsection 23(a)(3) of this Law.

Composition of the 25 (a) The Trust Fund consists of the Interest Suspense Account
Trust Fund
referred to in section 30 of this Law, any trust accounts that
other Laws establish as part of the Trust Fund and the trust
accounts stated in subsection (b) of this section.
(b) The Trust Fund shall also include any trust accounts that are
established from time to time for the following purposes —
(1) For holding public moneys appropriated and passed in
the budget for specific public purposes;
(2) For holding public moneys that the State holds for or on
behalf of any person that is not a government agency;
(3) For holding temporarily as public moneys, money
received as conditional grants and money received as
grant assistance, gift or donation for a specific public
purpose;
(4) For holding temporarily public money received until the
purpose for which the money was received is identified;
(5) All public moneys that have been appropriated and
passed in a budget for a specific purpose of the trust
account;
(6) All public moneys received for a specific purpose of the
trust account.
(c) A trust account must not be established without the written
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permission of the Minister and except for a purpose stated in

subsection (b) of this section.

Trust statements 26 (a) When a trust account is established under this Law or another
for trust accounts
Law, a trust statement must be prepared for the account.
(b) In this Law “trust statement” means a document prepared and
signed by the Minister containing the name of the trust
account that is established, its purpose, the type and sum of
money deposited in it, expenses permitted from it, the person
accountable for operating it and all other details required to be
maintained in relation to the account in accordance with the
Public Finance Regulations and which is deemed the most
authoritative document in respect of the account containing the
official details relating to the account.
(c) A trust statement that is consistent with section 30 of this Law
must be prepared for the Interest Suspense Account.
(d) All trust statements must be prepared in accordance with the
Public Finance Regulations. The Minister, in accordance with
the Public Finance Regulations, may amend a trust statement.

Payments into 27 Public moneys must not be paid into a trust account except in
trust accounts
accordance with the trust statement for the account.

Payments from 28 (a) Public moneys must not be paid from a trust account except in
trust accounts
accordance with the trust statement for the account, and a trust
account must not be overdrawn.
(b) Public moneys must not be paid from a trust account except in
one of the following ways:
(1) if the account was established under another Law, in
accordance with that Law and the trust statement for that
account;
(2) in the case of the Interest Suspense Account, in
accordance with section 30 of this Law and the trust
statement for that account;
(3) if another trust account, in accordance with the trust
statement for that account;

Closing trust 29 (a) The Minister has the authority to direct that a trust account
accounts
established for a purpose stated in subsection 25(b) of this
Law be closed if the purpose for which the account was
established has been fulfilled or if the Minister is of the view
that the purpose for which the account was established will not
be fulfilled.
(b) If the Minister directs that a trust account be closed, the
balance of the public moneys in the account shall, after
payment of the liabilities of the account, be paid out in
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accordance with the provisions, if any, of the account’s trust

statement that deal with the closure of the account. If the trust
statement does not provide for the same, such money shall be
paid into the Consolidated Revenue Fund.

Interest Suspense 30 (a) As part of the Trust Fund there shall be an account called the
Account
“Interest Suspense Account”.
(b) All interest received from investments made in accordance
with section 16 of this Law shall be paid into the Interest
Suspense Account.
(c) The public moneys in the Interest Suspense Account must be
paid from it into a Public Fund or into another trust account or
accounts in accordance with the trust statement for the Interest
Suspense Account, unless another Law states otherwise.

CHAPTER 4

Preparation and Submission of Budget

Preparation of 31 Every accountable government agency must, in accordance with the

budget and
submitting to Public Finance Regulations and on or before the date set by the said
Minister Regulations, prepare and submit to the Minister a budget setting out
for that financial year the estimated income of the agency, the
estimated expenditure of the agency on recurrent expenses and on
capital works. The duties under this section shall be carried out by
the accountable officer designated under this Law in every
government agency.

Annual State 32 (a) For each financial year, the Minister must prepare and submit
budget
to the People’s Majlis the annual State budget at least one
month before the beginning of the financial year to which the
budget relates.
(b) The annual State budget, when being submitted as per
subsection (a) of this section, must set out, under separate
headings, the estimated expenditure of the State and the
estimated income of the State for the financial year to which
the budget relates and the expenditure of the State and the
income of the State for the previous financial year.
(c) The annual State budget, when being submitted as per
subsection (a) of this section, must seek an appropriation of
expenses for capital works from the Loans and Capital Works
Fund; and an appropriation of recurrent expenses from the
Consolidated Revenue Fund.
(d) The annual State budget must, in relation to each accountable
government agency, set out for the financial year a summary
of the estimated income of the agency; and the estimated
expenditure of the agency on recurrent expenses and on capital
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works. The annual State budget must also include details of

major expenditure estimated by accountable government
agencies on recurrent expenses and on capital works.
(e) In the event if a request for an appropriation of supplementary
or excess funds to the budget is to be submitted to the People’s
Majlis, such request shall be prepared in the manner provided
in this section for preparation of the budget and shall be
submitted to the People’s Majlis 1 month prior to the date on
which such funds are required.
(f) The annual State budget, when being submitted to the People’s
Majlis, must state the manner in which deficit will be financed
by the State.

Transfer of 33 If public moneys are appropriated to a particular accountable

appropriations on
transfer of government agency for particular capital works or a particular
functions public service; and the responsibility for those works or that service
is transferred to another accountable government agency, the
unexpended part of those appropriated moneys may, with the
approval of the Minister, be transferred to the accountable
government agency to which such responsibility has been
transferred and be spent by such agency on those works or that
service.

Moneys 34 If public moneys appropriated by a budget passed for a particular

appropriated in
the budget for financial year are not spent in that financial year, such moneys must
expenditure not be spent after the end of that financial year, except in
accordance with section 8 of this Law.
CHAPTER 5

Financial Reporting

Annual reports to 35 (a) The accountable officer designated under this Law in each
be prepared and
submitted to accountable government agency must, within 3 months after
Auditor-General the end of a financial year, prepare and submit to the Auditor-
General a written report containing the following information:
(1) A statement of the estimated revenue and expenditure for
the agency that are in the budget passed by the People’s
Majlis for that financial year;
(2) A statement of the actual revenue and expenditure of the
agency in that financial year; and
(3) A report of the operations of the agency in that financial
year.
(b) The report stated in subsection (a) of this section must be
prepared in accordance with procedures laid down by the
Auditor-General.
(c) From the information required by such agencies for the
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preparation of the report stated in subsection (a) of this

section, information maintained by the Minister must be
provided by the Minister within 1 month after the end of that
financial year.
(d) If an accountable government agency is abolished, the
accountable officer designated under this Law in the agency at
the time the agency was abolished must prepare and submit to
the Auditor-General, within 6 months from the date the agency
is abolished, a written report prepared in accordance with
procedures laid down by the Auditor-General for that part of
the financial year up to the date of its abolition
(e) The report stated in subsection (a) of this section shall be
prepared and submitted by the Office of the Auditor-General
in accordance with law.

Annual reports to 36 (a) The Auditor-General must, within 2 months from the date of
be audited and
reported receiving the annual report stated in section 35 of this Law
from an agency stated in the same section, audit the report and
after auditing the same, submit a written report thereof to the
accountable officer of the agency designated under this Law.
(b) If the Auditor-General does not receive a report from an
accountable government agency in accordance with section 35
of this Law the Auditor-General must, within 14 days, report
the matter in writing to the People’s Majlis and the President.

Audit Report and 37 The accountable officer, designated under this Law, in every
Annual Report to
be submitted to accountable government agency must, within 1 month from the date
the President of receiving the Auditor-General’s report in accordance with
subsection 36(a) of this Law, submit the Auditor-General’s report
and a copy of the report prepared in accordance with section 35 of
this Law to the President and the Speaker of the People’s Majlis.

State’s annual 38 (a) The Financial Controller must, within 3 months after the end
statements
of a financial year, prepare and submit to the Minister the
State’s annual statements for that year in accordance with
procedures laid down by the Auditor-General.
(b) The State’s annual statements stated in subsection (a) of this
section must include the following:
(1) a statement of the estimates of the revenue and
expenditure for each of the Public Funds that are in the
budget passed by the People’s Majlis for that financial
year; and
(2) a statement of the actual revenue and expenditure of each
of the Public Funds in that financial year; and
(3) a statement of the assets, liabilities and contingent
liabilities of the State as at the end of that financial year.
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(c) The Minister must, within 14 days from the date of receiving
the State’s annual statements as per subsection (a) of this
section, submit the same to the Auditor-General.
(d) If the Auditor-General does not receive the State’s annual
statements from the Minister in accordance with subsection (c)
of this section within 3 months and 14 days after the end of a
financial year, the Auditor-General must, within 14 days,
report the matter in writing to the President.

Submission of 39 The Auditor-General must, within 2 months from the date of

Auditor-General’s
Report on the receiving the State’s annual statements from the Minister in
annual statements accordance with subsection 38(c) of this Law, submit the Auditor-
General’s report to the Minister.

Annual statements 40 The Minister must, within 14 days from the date of receiving the
and audit report to
be submitted to Auditor-General’s report in accordance with section 39 of this Law,
the President submit to the President the said report and the State’s annual
statements prepared in accordance with section 38 of this Law, and
must send the same to the People’s Majlis within 14 days from the
date of submission of the same to the President.

Inspection of 41 The Minister, or a person appointed by the Minister to do so, may at

accounts
any time inspect the financial and accounting records of a
government agency.

CHAPTER 6

Administrative Matters

Minister’s 42 The following, among others, are responsibilities of the Minister:

responsibilities
(a) Administering this Law;
(b) Controlling and managing the Public Bank Account, the
Public Funds and the financial affairs of the State; and
(c) Ensuring that full and accurate accounting of the Public Bank
Account, the Public Funds and the financial affairs of the State
are duly submitted to the Auditor-General and the People’s
Majlis.

Delegation by the 43 (a) The Minister may delegate to the Financial Controller any of
Minister
the Minister’s powers or duties under this Law as and when
the Minister deems appropriate. However, the powers and
duties delegated to the Financial Controller by the Minister
must not be delegated to any other person by the Financial
Controller.
(b) The Minister shall not be exempted from his responsibilities
even though the Minister’s powers and duties have been
delegated to the Financial Controller as per subsection (a) of
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this section.
(c) The delegation of the Minister’s powers and duties to the
Financial Controller as per subsection (a) of this section must
be in writing and be signed by the Minister.

Appointment and 44 (a) The President shall create a position called the Financial
responsibilities of
Financial Controller and shall, on the advice of the Minister, appoint to
Controller the position a person having the following qualifications:
(1) A Master’s degree in a field related to the position or an
equivalent qualification from an institution acceptable to
the government or having worked for an appropriate
duration in a financial agency of the government and has
gained experience.
(2) Has never been convicted of criminal breach of trust,
theft, fraud or any similar offence.
(b) The responsibilities of the Financial Controller must be set out
in this Law and the Public Finance Regulations. The
responsibilities of the Financial Controller shall include the
following :
(1) Supervising and administering the financial and
accounting records of the State and the accounting
system of the State in accordance with procedures laid
down by the Auditor-General.
(2) Ensuring that the receipt, custody, payment and
investment of public moneys are in accordance with this
Law and the Public Finance Regulations.
(3) Ensuring that the purchase, custody, use, sale, destruction
and disposal of public property are in accordance with
this Law and the Public Finance Regulations.

Accountable 45 (a) For the purposes of this Law, the following shall be deemed to
government
agencies be accountable government agencies:
(1) The President’s Office, Ministries and the Attorney
General’s Office.
(2) Those government agencies that the President determines
and designates to have a separate financial management
and financial accountability.
(b) The financial affairs and transactions of every government
agency that is not considered an accountable government
agency shall, as per the Public Finance Regulations, be under
the responsibility of the accountable government agency to
which such agency is related.
(c) The accountable government agency which, according to the
Public Finance Regulations, is responsible for the financial
affairs and transactions of a government agency as per the said
Regulations shall, for the purposes of this Law be responsible
 Law No. 3/2006

for the same.

Appointment and 46 (a) For the purposes of this Law, each accountable government
responsibilities of
accountable agency shall have one accountable officer responsible for the
officers implementation of matters under this Law.
(b) The responsibilities of accountable officers designated under
this Law shall be set out in the Public Finance Regulations.
CHAPTER 7

Miscellaneous

Improper conduct 47 In the following situations, the person responsible shall, under this
Law, be deemed to have engaged in improper conduct:
(a) being responsible for collecting or recovering or depositing or
accounting for public moneys or public property, has
negligently omitted to collect or recover or deposit or account
for the moneys or property; or
(b) the payment of public moneys or the sale or destruction or
disposal of public property other than in accordance with this
Law or the Public Finance Regulations; or
(c) any deficiency in public moneys for which the person is
responsible; or
(d) any damage to public property for which the person is
responsible.

Imposing fine for 48 (a) If a person has engaged in improper conduct as stated in
improper conduct
section 47 of this Law, the Minister may fine the person as per
the Public Finance Regulations. The amount of such fine shall,
however, be determined in the following manner:
(1) the amount of public moneys, or the value of public
property involved in the improper conduct; or
(2) the amount of deficiency for which the employee is
responsible; or
(3) the value of public property sold or disposed of or
destroyed or damaged by the employee.
(b) If a person has intentionally engaged in improper conduct, the
Minister must, in addition to imposing a fine as stated above,
submit such case to the Attorney-General for prosecution.
(c) The purpose of imposing a fine as stated in subsection (a) of
this section is to recover in full the damages incurred by the
State. Hence, the right to recover damages shall prevail until
the damages are recovered in full.

Making 49 The Public Finance Regulations shall be made and administered by

Regulations
a person or persons determined by the President.
 Law No. 3/2006

Coming into force 50 This Law shall come into force, at the latest, within 1 year from the
of this Law
date this Law is passed, ratified and published in the Government
Gazette. However, the President shall have the power to defer
giving effect, for a period of 3 years from the date this Law comes
into force, to sections of this Law that require changes in policy for
their implementation, and the power to give effect to certain
sections during that period.

Interpretation 51 (a) In this Law, unless the context otherwise requires:

“Grace payments” means the type of assistance stated in
section 10 of this Law.
“Contingent liability” means debts or moneys that may have
to be paid due to the occurrence of an unpredictable
and unforeseen event.
“Capital Works” means works and projects for public
purposes which involve capital expenses. Such
works do not obligate the involvement of tangible
property.
“Undertaking” means the agreement where one party agrees
to take financial responsibility for another party.
“Indemnity” means a guarantee or an assurance given by one
party to another in agreement to compensate for
damages or to compensate for damages caused to a
party as a consequence of an agreement entered into
between two parties.
“Assets” means properties, businesses and things of financial
value owned by a party that can be used in the
repayment of debts.
“Advance payment” means money paid ahead.
“Financial year” means the period beginning on and
including 1 January and ending on and including 31
December.
“Minister” means the Minister of Finance and Treasury or
any other Minister or State Minister if such Minister
is assigned the responsibilities of the Minister of
Finance and Treasury by the President.
“Person” means and includes a natural person or a company,
or an association or body of persons established
according to Law or otherwise.
“Passed budget” means a budget allocated for a financial
year and the money to be added to an existing
budget in accordance with Article 78 of the
Constitution of the Republic of Maldives.
“Public Finance Regulations” means the regulations and
procedures made and administered under section 49
of this Law.
 Law No. 3/2006

“Public property” means any property, whether moveable or

not, belonging to the State or held by any person for
or on behalf of the State;
“Public moneys” or “money” means all moneys, negotiable
instruments or securities collected or held by any
person for or on behalf of the State as taxes, charges,
fees, duties, fines, or revenue whether in or outside
the Maldives and moneys held by the State for or on
behalf of another person, loans, grants, gifts, interest
earned or to be earned;
“Liabilities” means the debt arising out of a business on the
owners and lenders of that business; or money owed.
“Guarantee” means the assurance by a third party, not party
to an agreement or transaction between parties, that
such third party would be responsible for
consequences arising out of any breach of the terms,
conditions or provisions of that agreement or
transaction by a party to that agreement or
transaction.
“Government agency” means an office, position or
organisation that is established or continued for
public purposes under a law or by administrative
authority and does not include public enterprises.
“Supplementary budget” means an additional budget passed
to be included in an already passed budget for a
financial year.
“Accountable officer” means the officer designated in an
accountable government agency under section 46 of
this Law responsible for the implementation of
matters under this Law.
(b) In this Law, unless the context otherwise requires:
(1) words in the singular include the plural and words in the
plural include the singular; and
(2) if a word is defined in this Law, other parts of speech and
grammatical forms of that word have corresponding
meanings.

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