Sri Lanka’s public debt during the past ten years has not been managed in a manner favourable to the development of the country, a special report compiled by Auditor General H.M. Gamini Wijesinghe has indicated.
The report released by the Auditor General’s Department last week on Public Debt Management in Sri Lanka states that while there has been a continuous growth in the public debt balance during the previous decade, with the said balance increasing exponentially during the preceding five years, there has also been a failure in controlling the continuous decrease in the percentage of loan utilization on capital expenditure.
“Owing to the fact that the financial position of the Republic has not been managed in accordance with the laws, rules, regulations, and practices that govern the process of financial reporting inclusive of financial performance, a dire need is observed with respect to the formulation of a methodology relating to the reporting of accurate and reliable information,” the report by the Auditor General’s Department, advocated.
The report points out that although the debt balance payable by the Government as at December 31, 2016 amounted to Rs. 8.86 trillion (according to financial statements presented to Audit), it was revealed (during the audit test checks) that Rs. 826 billion of debt received in several preceding years had not been included in the financial statements.
Hence, it observed, a necessity to introduce and implement an appropriate procedure for the identification, measurement, accounting, and reporting of all commitments and liabilities incurred by the Government or on behalf of the Government.
“It was revealed that assigning the responsibility of all activities relating to the process of public debt management to each officer and the supervision thereof was at a weak level, thus observing the need of special attention in this connection,” the report by Wijesinghe said, adding that introducing an appropriate methodology is essential for better coordination between the General Treasury, Central Bank, and the lending agencies. The Auditor General said the objective of the special report was to forward an analytical report on the management of debt of the Republic of Sri Lanka from January 1, 2005 to December 31, 2016 to Parliament.