Public Financial Management Law comes into effect next year

A modern Public Financial Management Law will be enacted in parliament by February 2024 to strengthen the fiscal responsibility framework, budget formulation and execution.

The relevant bill is being finalised with the aim of improving the responsible fiscal management process when dealing with public finances and to take substantial decisions based on efficient resource utilisation.

The proposed Act will strengthen transparent financial systems and effective performance management by giving freedom to officials to manage public finance efficiently and making them accountable for their responsible projects, a Finance Minsitry official pointed out.

It will have provisions to introduce reforms and modernise the accounting and reporting standards and making public sector accountability as a mandatory requirement.

Along with the implementaion of provisions of the new act, a modern financial management system is to be implemented with the aim of controlling the Sri Lanka budget execution via line ministries and state institutions including statutory boards and corporations, ministry sources disclosed.     

The current Treasury Management Information System (ITMIS) (based on a commercially-acquired software suite) has been ongoing for a decade and has faced challenges of resourcing and reform commitment.

Currently the ITMIS is rolled out to 3000+ licensed users but is understood to suffer from system speed performance issues that limit its utility, the official said.  

As a result, the ITMIS is being run in parallel to the existing Computerised Integrated Government Accounting System (CIGAS), he revealed adding that in practice, neither system is currently supporting commitment control processes.

The ITMIS project is designed to ensure that the commitment control function of software, including anticipated payment dates relating to approved commitments, are configured in the system and that the system (or appropriate alternative) is rolled out to users and any outstanding performance issues are resolved.