Public Financial Management and Government Accounting
This domain tests how public money is authorised, spent, accounted for and audited in Sri Lanka: the constitutional chain from Parliament to the Accounting Officer, the appropriation and commitment controls, and the audit and committee process that follows the year end.
The constitutional and legal chain
- Articles 148–154: no tax or expenditure without parliamentary authority; the Consolidated Fund; the Auditor General's audit mandate.
- Appropriation Act: annual limits by programme and by recurrent/capital classification.
- Financial Management Regulations (FMR) and Treasury Circulars: commitment control, virement restrictions, imprest, and the rule that unspent provisions lapse at year end unless carried forward.
- Fiscal Management (Responsibility) Act No. 3 of 2003: medium-term fiscal framework, fiscal strategy statement and reporting discipline.
- Accounting basis: government accounts are traditionally cash-based, with an ongoing move to accrual under Sri Lanka Public Sector Accounting Standards, which are aligned with IPSAS.
- Oversight: Auditor General's report, Public Accounts Committee and Committee on Public Enterprises.
Worked example
A ministry has an appropriation of LKR 50,000,000 for supplies. By year end it has committed LKR 48,000,000 and settled LKR 46,000,000. The available balance is LKR 2,000,000 because control is exercised on commitment, not on payment alone - committing beyond LKR 50,000,000 would breach the appropriation even if cash had not yet left the bank. The unspent LKR 2,000,000 lapses unless a valid carry-forward is approved.
Traps that cost marks
Treating the cash book balance as authority to spend; ignoring commitments already entered; assuming virement between programmes is unrestricted; confusing the Auditor General's constitutional audit with internal audit; describing government accounts as accrual-based when the general ledger is still cash-based.