Government financial management : ‘Professional accountants must introduce best practices’ | Sunday Observer

Government financial management : ‘Professional accountants must introduce best practices’

Officials at the head table
Officials at the head table

The first annual conference of the CPFA and APFASL members was held at the auditorium of the Institute of Chartered Accountants of Sri Lanka (CA Sri Lanka) recently.

The conference was organised by the Association of Public Finance Accountants of Sri Lanka (APFASL), the Public Sector Wing of CA Sri Lanka. The theme was ‘Sustainable Public Sector Financial Management – Think Forward’ ensuring upholding trust and accountability.

President, APFASL, V. Kanagasabapathy emphasised the importance of the conference, especially as a forum that will facilitate the members of the APFASL and CPFA members to share professional experience and to proliferate new ideas that will support the achievement of national objectives.

While paying attention to professionalising its membership, he explained the leadership by APFASL in strengthening Public Financial Management in the country, specially by adopting and implementing public sector accounting standards, conducting Best Annual Report and Accounts Award Competitions, providing Capacity Development and CPD programs recognised by the Treasury.

The conference brought together a host of subject experts.

In the keynote speech by Deputy Secretary General of the National Economic Council, C. J. P. Siriwardana emphasised the role of Public Financial Managers as key decision makers, whose decisions will impact all aspects of the economy. He said that the decision makers must understand, analyse and synthesise information to make informed decision.

He explained the necessity of strong public financial management processes and the systems essential for effective and efficient delivery of public services, transparent public finances to build the trust between the Government and citizens.

He stressed the need to have a holistic approach for smooth debt management while improving the government revenue structure and rationalising expenditure.

Siriwardena highlighted the urgent need for structural reforms which will facilitate the improvement in the fiscal operations for long term sustainability. He said that professional accountants have a responsibility to introduce best practices in Government Financial Management.

He commended the introduction of the CPFA qualification to the public sector and the leadership provided by the APFASL with CA Sri Lanka. Siriwardena was of the view that the initiative was timely given the pressure in fiscal management which can be overcome only if the officials engaged in such work are possessed with the necessary skills and knowledge. He emphasised the need to attract and retain professional Accountants in the public sector and the availability of a clear career path.

Director of Department of External Resources, Visakha Amarasekere spoke on ‘Budget deficits – its trends and implications for financing. She highlighted the challenges the country faces in financing its deficit and the impact of continuous debt financing. She said fiscal discipline should be maintained so as to support a more sustainable economic growth.

Former Senior Commissioner of the Inland Revenue, Dharmadasa Ranagala spoke on ‘Tax reform towards sustainable development’. He stressed the importance of well-designed reform programs and continuing reform to guarantee the smooth functioning of revenue administration aligned with the changing economic environment

Auditor General Gamini Wijesinghe spoke on ‘Enhancing accountability through the National Audit Act’. He highlighted the key features of the National Audit Act and said he has seen serious deficiencies in the management of public finances in the country and the issues in the Financial Statements of the Government.

He said that professional accountants should ensure financial planning, proper maintenance of books and accounts, to ensure proper financial management mechanism that generates good quality, timely management information within their organisations.

Senior Lecturer of the University of Colombo, Dr. A. A. C. Abeysinghe spoke on ‘Government budgeting in Sri Lanka – Are we on track’. He questioned why the government budgeting system operates without serving its intended purpose as observed in many other studies undertaken.

He investigated the impact of colonial time systems in the postcolonial budgeting system and drew attention of the policy makers to make changes in the budgetary system.

He said that the budgetary system has continued as a statutory requirement and has lost its ability to ensure fiscal discipline. Reforms must be undertaken to the Budget less of a political statement and more of an economic statement.

Slight changes are not sufficient to improve its control over state sector organisations. Non-availability of useful information has caused users to lose their interest in the budgetary system. Real performance is not reflected in the budget and physical and financial performance are not matched.

Director, Education and Training of CA Sri Lanka, Dr. N. Nagendrakumar spoke on ‘Revisiting the institutional theory – Accrual accounting reforms in the public sector.’

He focused on the reasons for the failure in implementing accrual based accounting in the public sector. His study outcomes concluded that in the institutionalisation frame work, the initial pressure for the accounting reform existed while the induced pressure (push) did not. As a result, public organisations did not face the institutional pressure to adopt accrual accounting practices. Enforceability of the SLPSAS is an aspect that matter in the PSAFR reform. Formulator of those, ICASL through APFASL , does not have the authority to establish accrual based accounting in the public sector. Although the public sector Accountants are members of APFASL , the lack of Code of Ethics has made it non mandatory for any member to follow SLPSASs due to the fact that the public sector accountants are duty bound only to the Treasury. Although the ICASL (APFASL) has been pulled by the membership obligations, there is no legally binding push for SLPSASs by the Government.

The conference concluded with a panel discussion moderated by Manil Jayasinghe Senor Partner Ernst and Young and Vice President of CA Sri Lanka. A issue highlighted at the panel discussion was the capacities of the public sector to move into a more market oriented economy, specially where market based borrowings will be the norm with increased levels of complexities.

The panellists agreed that capacity building is a must and that continuous professional training needs to be enacted. It was noted that the APFASL has a pivotal role to play in ensuring that the capacities of the public sector accountants and auditors are continuously upgraded to support them to meet the demands that arise in the public sector in the future specially when demands are increasingly more complex and sophisticated. It was agreed that a learning culture needs to be facilitated in the public sector.

Secretary, APFASL, Ananda Amarawansa proposed the vote of thanks.

The deliberations at this conference was noted to be as:

Public Sector Financial Management needs to be reformed to facilitate economic development with more informative and real performance review based accrual accounting system, including budgeting on the same line, adjustable in the Sri Lankan context with a legal mandate and that change should be facilitated through the provision of increased training and capacity building among public sector officials.