VZCZCXRO7178
OO RUEHROV
DE RUEHJM #0554 0881026
ZNR UUUUU ZZH
O 281026Z MAR 08
FM AMCONSUL JERUSALEM
TO RUEHC/SECSTATE WASHDC IMMEDIATE 1039
INFO RUEHXK/ARAB ISRAELI COLLECTIVE PRIORITY
RHEHNSC/NSC WASHDC PRIORITY
RUEATRS/DEPT OF TREASURY WASHDC PRIORITY

UNCLAS JERUSALEM 000554 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
NEA/IPA FOR SHAMPAINE/SACHAR; EEB/IFD/OMA FOR SNOW AND 
FIGUEROA; H FOR BUTTE-DAHL; NSC FOR PASCUAL; TREASURY FOR 
CONNOLLY 
DEPT PLEASE PASS TO USAID FOR MCCLOUD/BORODIN 
 
E.O. 12958: N/A 
TAGS: EAID ECON KWBG PREL KPAL EFIN
SUBJECT: RESPONSE ON FISCAL TRANSPARENCY IN THE PALESTINIAN 
AUTHORITY 
 
REF: STATE 16737 
 
¶1. (U) The Palestinian Authority (PA) under Prime Minister 
and Minister of Finance Salam Fayyad is committed to fiscal 
transparency and has instituted a number of reforms since 
taking office in July 2007. 
 
¶2. (U) On March 26, Fayyad relaunched the Ministry of Finance 
website (www.pmof.ps) to serve as the central point for 
publication of PA budget, revenue and expenditure information 
on a monthly basis. 
 
¶3. (SBU) The following responses are keyed to the questions 
in paragraph 7 of reftel. 
 
-- Although the 2008 budget has not yet been formally 
adopted, the PA has announced that, when approved by the 
Cabinet and President, the budget will be made public via the 
Ministry of Finance website. 
 
-- The PA makes revenue and expenditure information publicly 
available.  Such information has been distributed to 
international donors and is now posted on the above website. 
The PA is committed to publishing monthly reports that 
reflect actual revenues and expenditures by each ministry, 
wage payments for civilians and security, and external budget 
support received. 
 
-- Information produced by the current government is 
meaningful and accurate.  Revenue and expenditure information 
for 2006 and 2007, during the period of the Hamas government, 
is understood to be incomplete.  The current government has 
cooperated with IMF efforts to review revenues and 
expenditures during that time period, but some uncertainty 
remains, particularly in the area of expenditure commitments. 
 
 
-- Any gaps on fiscal transparency are the result of capacity 
limitations, not lack of will.  PM Fayyad has publicly 
committed himself and his government to full transparency, 
and he has repeatedly opened the PA's books to the IMF and 
donors, including the USG.  As part of the transfer of USG 
assistance to the PA budget, USAID hired an independent 
auditor to review the PA's public financial management 
structures.  The review uncovered no significant fiscal 
irregularities. 
 
-- In addition to a number of programs that support good 
governance, the USG specifically supports improvements in the 
transparency of the overall Palestinian financial system 
through USAID's Modernizing Financial Infrastructure program. 
 
-- A number of donors provide assistance to the Ministry of 
Finance.  In particular, the European Commission (EC) has 
provided training to Ministry officers and supported the 
creation of an external auditing institution.  Fayyad has 
consistently sought IMF assistance and advice, including two 
visits since July 2007 by technical specialists in the area 
of public financial management.  The PA has also asked the 
IMF and the World Bank to provide quarterly reviews of 
implementation of the Palestinian Reform and Development 
Plan, to include assessments of both budget execution as well 
as overall financial management. 
 
-- According to the IMF's Senior Resident Representative for 
the West Bank and Gaza, because the PA is not a member of the 
IMF, it does not qualify for voluntary reporting on standards 
and codes. 
 
¶4. (U) The full text of PM Fayyad's March 26 statement on 
fiscal transparency can be found on ConGen Jerusalem's 
unclassified intelink site at: 
 
SIPDIS 
http://www.intelink.gov/communities/state/pal econ. 
WALLES