Sri Lanka auditor general exposes chaotic accounting of government debt
Jun 03, 2017 06:33 AM GMT+0530 | 8 Comment(s)
ECONOMYNEXT - Sri Lanka's auditor general, who disclaimed accounts of the Finance Ministry has exposed chaotic accounting of debt running into tens of billions of rupees where inconsistent rules were applied and where some loans were completely ignored.
The auditor general said the balance of seven loan agreements amounting to 332 billion rupees had not been included in financial statements.
In the case of 14 loan agreements 4,730 million rupees relating to 2015 4,730 million and 1,176 million relating to 2015 and 5,906 million rupee relating to another 8 agreements had been dropped.
A loan of 7,550 billion taken from state and private banks by the ministry of defence to construct the Secretariat for Personal Identification had not been included in the accounts.
A difference of 13.6 billion rupees was seen in notes to the financial statements relating to foreign borrowings.
A loan of 7,550 million taken from state and private banks to build a Secretariat for Personal Identification had not been included in the accounts.
A test check had revealed that 12,790 million had been understated when reporting that 169.5 billion had been given as sub-loans to various government institutions. This included a loan of 4,990 granted to the Ministry of National Policies and Economic Affair to repay Golden Key Depositors.
A test check had revealed that tax payer funds given to state enterprise had been understated by 29.14 billion rupees. In the case of SriLankan 4.2 billion had been overstated compared to confirmed balances and in the case of Ceylon Electricity Board, 33.3 billion had been understated.
A test check had revealed that government liabilities (other than public debt) 18.4 billion rupees.
Though a cash basis was supposed to be followed in accounting, 18.4 billion relating to leases had been recorded on an accrual basis.
"As such it was observed that there was no uniformity in the preparation of financial statements," The auditor general noted.
The AG said here were also 487 billion gap in recognizing liabilities of Treasury Bonds as 2016 bonds were recorded on their face value, but earlier ones were not.
Sums of 7.2 billion rupees and 5.6 billion rupees payable to Sri Lanka State Pharmaceuticals Corporation and Ministry of Health had not been recognized as liabilities.
A National Savings Bank claim of 1.1 rupees for dormant accounts had not been recognized. A liability of 10.0 billion for banks in respect of senior citizen interest subsidies had not been recognized.
The attorney general said when all liabilities were counted the debt to gross domestic product ratio appeared to 83.3 percent, not 79.3 percent and it had exceeded limit set in the fiscal management responsibility law.
The budget deficit had also exceeded the limit for many years.
The auditor general refused to certify the accounts for 2016 and disclaimed saying he was unable to express a view.