817.51/1961: Telegram
The Minister in Nicaragua (Eberhardt) to the Secretary of State
[Received 8:55 p.m.]
274. Department’s telegram No. 140, July 7, 3 p.m. A provision for the countersignature of checks is regarded by us as absolutely [Page 549] essential to any effective control of expenditures. The principal defect of the present financial plan is its failure to prevent the expenditure for one purpose of sums appropriated for another, and this practice is so generally accepted as a part of the system that there is no hope that publicity or remonstrances by the American officials would stop it. The Finance Minister would probably actually maintain that he had the right to continue the practice if the plan went through in its present form, for it should be remembered that expenditure of Government funds by the Executive without legal sanction is considered perfectly proper and natural in Nicaragua. It would be unfortunate if the success of the new financial organization were to be jeopardized at the start by a controversy over this point, and it would be extremely inadvisable to have this Legation attempt to interfere in cases of individual payments by the Finance Minister. So long as the Government is in a position to use public funds for purposes not authorized by the Congress and the budget commission, it is obvious that there can be no effective system of budget control or sound financial administration.