News
State chief accountants will be held liable for excessive expenses
View(s):The Treasury has cautioned the government’s chief accounting officers that they will be held “personally liable” for any expenditure that is not already budgeted for 2024—an expensive election year in which a primary surplus of 0.8 percent of GDP must also be achieved in line with fiscal targets.
A primary surplus occurs when a country has higher levels of income relative to current spending and is a target set for Sri Lanka under the ongoing International Monetary Fund programme.
In a circular to all Ministry Secretaries, Chief Secretaries of Provincial Councils, Department Heads, District Secretaries, and chairpersons of State Corporations, the University Grants Commission, and statutory boards, Treasury Secretary Mahinda Siriwardana sets out the order of expenditure priorities for this year, starting with the settlement of outstanding bills as there should be no outstanding liabilities.
This is followed—in order of importance—by the implementation of foreign-funded projects that are in their final stage; high-priority projects being carried out with domestic financing; and expenditure related to new commitments for which allocations have already been granted via budget estimates.
The Treasury Secretary instructs all chief accounting officers to manage spending without exceeding the limits of the 2024 budget estimates and states that a new circular will be issued with updated, better expenditure control measures.
“Given the fact that a primary surplus equivalent to 0.8 percent of the Gross Domestic Product should be achieved in line with the fiscal targets envisaged for 2024, the public expenditure in 2024 should be incurred while maintaining a strong discipline in public finance and managing public expenditure in a prudent manner,” Mr. Siriwardana states.
The Treasury cannot pass any supplementary funds exceeding allocated provisions, the circular warns, reiterating that expenditure must be managed through prioritisation. Officers must ensure there are adequate budgetary provisions for every expense before entering into any commitment.
“It is important to verify the availability of imprest prior to making any commitment, even though provisions have been allocated to prevent the difficulties encountered by the government as well as contractors and service providers due to the accumulation of unsettled liabilities,” the circular says.
Capital expenditure—funds spent on physical assets such as land, machinery, technology, or buildings—has been cut. Department of Treasury Operations (DTO) concurrence must be obtained before entering into any such expenditure commitments of more than Rs. 500 million or those with a total cost of over Rs. 1 billion payable over multiple years. The DTO will grant approval based on a waiting list “according to the financial situation and priorities”.
Sri Lanka has committed to the IMF a central government primary surplus of 2.3 percent of GDP by next year—a target that even the multilateral bank has called “ambitious”.
“The size of the programmed fiscal adjustment is unprecedented for Sri Lanka, but necessary, given that it started with one of the lowest revenue-to-GDP ratios in the world after previous fiscal reforms were undone,” the IMF said last year.
The best way to say that you found the home of your dreams is by finding it on Hitad.lk. We have listings for apartments for sale or rent in Sri Lanka, no matter what locale you're looking for! Whether you live in Colombo, Galle, Kandy, Matara, Jaffna and more - we've got them all!