Sri Lanka tightens public financial management
The Government, pursuing further improvements in public financial management and transparency, is planning to address past irregularities and prevent future occurrences as the country’s public finances are at a perilous state, Finance Ministry sources said.
Fiscal policy reforms are to be introduced to avert an impending economic crisis. At the outset, public expenditure will be rationalised by diverting resources away from loss-making public entities and towards investments with high economic returns.
The government’s revenue mobilising framework is now being re-evaluated in view of broadening the revenue base and maximising revenue potential.
The Ministry has introduced a system of careful monitoring of government spending commitments on the directions of International Monetary Fund (IMF), a senior Treasury official disclosed.
Through modification of the existing IT system and manual reporting from line ministries, the Treasury is now capable of tracking spending commitment for each line ministry on a monthly basis, he said.
Previously the ministry reported to parliament on the status of financial commitments in each quarter and then adjusted spending through careful commitment and cash management.
An IT –based commitment control system with commitment ceilings for line ministries will be implemented next year using Integrated Treasury Management Information System (ITMIS), he added.
The rollout of the new ITMIS would significantly expand financial management capabilities, including commitment control, budget preparation, treasury, accounting, and procurement, among others, he revealed.
Ministries including finance and health – Phase I of the ITMIS system of the budget planning module – have been rolled out.
This module includes a system of commitment controls that can be used to implement a formal commitment record system and quarterly expenditure ceilings.
Phases II and III of ITMIS have been rolled out to the ministries of finance and health with the full rollout of these modules expected next year.
For 2018, macroeconomic assumptions include real GDP growth of 6 per cent, inflation to stabilize at 5 per cent level and overall budget deficit to be contained at 4.3 per cent of GDP, he said.
The introduction of the Revenue Administration Management Information System (RAMIS) will revolutionise the tax culture in Sri Lanka, he said adding that the Inland Revenue Department will be implementing the scheme in two phases.
Cardnoa, Brisbane-based company, is partnering with USAID Sri Lanka to increase public sector transparency and accountability through the Short-term Assistance to Improve Public Financial Management Reform (STAIR) project.