Policy established on financial conduct within the judiciary

A new policy has been established to introduce an independent system for managing the financial affairs of the judicial sector. The "Policy on Financial Conduct Related to the Judiciary," published by the Ministry of Finance last week, aims to create a specialized framework for planning, disbursing, managing, and reporting the state budget allocated to the justice system.

Central to this new policy are defined standards governing how budgets are allocated and put into action. This encompasses the processes for distributing funds and ensuring accountability. The policy also mandates that the judiciary's financial needs be incorporated into the annual State Budget, which is approved by the People's Majlis.

Notably, for the 2026 budget, a grant has already been established for the judiciary following this new framework. The policy mandates that at the start of each year, the allocation for the judiciary must not be less than 2% of the total estimated state revenue for that year.

To ensure robust financial management, the "Judiciary Sectoral Grant" must be received, managed, and spent through a dedicated account opened at the Maldives Monetary Authority (MMA), as determined by the Ministry. All transactions from this account must be conducted via the state’s Public Accounting System (PAS) in compliance with the State Financial Regulations.

Under the new rules, the Department of Judicial Administration (DJA) is required to prepare a consolidated budget for the judiciary and submit it to the Ministry of Finance by September 30 each year. This budget must include detailed forecasts for medium-term revenue and, if a deficit is anticipated, a clear plan for securing the necessary funding.

The policy also outlines procedures for budget administration and oversight. The Chief Judicial Administrator is responsible for establishing policies for project funding and expenditure management, while the Financial Responsible Officer is tasked with implementing the budget according to those policies. If an essential expenditure arises that exceeds the allocated budget, a supplementary budget must be approved beforehand.

Regarding development projects, the policy states that the Public Sector Investment Program (PSIP) works within the judiciary will be funded through the Sectoral Grant. The Pay Commission, the State Salary Policy Act, and the Employment Act regulations must be followed by the industry when it comes to employee pay and benefits.

These guidelines also apply to the hiring of temporary employees, as long as the Financial Responsible Officer certifies that money is available in the budget. Before committing to further expenses, the officer must also make sure that money is set aside for necessary monthly expenses like rent and bills.

The policy forbids the provision of any subsidies or help intended to lower the cost of products and services in order to reduce financial risks. Only after a definitive court ruling will cash from the judiciary's budget be disbursed in situations where compensation is required.

To maintain transparency, detailed expenditure reports must be published before the end of each ongoing month. The Sectoral Grant will be disbursed to the judiciary either monthly or quarterly, depending on the state’s cash flow.