Public Sector Accounting and Financial Regulations
This domain examines how Parliament votes money, how departments spend it lawfully, and how the Auditor General reports on it - the constitutional articles, the Financial Regulations (FR) of the Government of Sri Lanka, Treasury circulars and the shift towards Sri Lanka Public Sector Accounting Standards (SLPSAS).
Core rules
- Article 148: Parliament controls public finance; no tax or levy may be imposed except by or under an Act of Parliament.
- Article 149: all revenue and receipts form the Consolidated Fund; withdrawals require parliamentary authority. Advances may be authorised for urgent expenditure pending an Appropriation Act, then regularised.
- Article 154: the Auditor General audits the accounts of departments, public corporations and other prescribed bodies and reports to Parliament; the National Audit Act No. 19 of 2018 supplies the operating framework.
- The annual estimates become the Appropriation Act. Expenditure must fall within the purpose and amount of the voted programme; scope and amount cannot be stretched.
- Financial Regulations cover incurring expenditure, custody of public money and stores, advances, losses and write-offs, and the responsibility of accounting officers. Circulars supplement but cannot override the FR.
- Government accounts are predominantly cash-based; SLPSAS, based on IPSAS, drives the accrual transition.
- The Auditor General's report is examined by the Public Accounts Committee (PAC) and the Committee on Public Enterprises (COPE).
Worked example
A vote for supplies is Rs 10,000,000, but an officer spends Rs 10,600,000 by drawing savings from another object. The Rs 600,000 excess is irregular: virement is permitted only within prescribed limits and subject to Treasury approval, and new services cannot be created by virement. The excess appears in the Appropriation Account as an excess vote and is examined by the PAC; the officer may be held personally answerable.
Traps that cost marks
- Assuming a Treasury circular overrides the Financial Regulations.
- Signing a payment without verifying vote authority, appropriation and available provision.
- Treating cash-basis accounts as needing no accrual adjustments for outstanding liabilities.