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Friday May 14th, 2021

Sri Lanka finance minister slams auditors, says former regime blocked reforms

EconomyNext – Sri Lankan Finance Minister Ravi Karunanayake said the ousted Rajapaksa government had blocked public sector financial management reforms that could have prevented corruption and declared that the accounting profession had failed in its responsibility.

Karunanayake said chartered accountants and auditors should ask themselves whether they had done their share to prevent corruption by politicians.

"Have we as accountants done our share as professionals?" Karunanayake, himself an accountant, asked at the launch of a new program to strengthen public financial management.

It was organised by the Institute of Chartered Accountants of Sri Lanka (CA Sri Lanka) which signed a Memorandum of Understanding (MoU) with the Chartered Institute of Public Finance and Accountancy (CIPFA).

"I am sure you’d be ashamed," he declared. ""Where is the civic responsibility that you ought to have discharged? We all failed miserably. I say this not with relish but with sadness. It is high time we professionals stand up for professional ethics.

"You have a new government and you professionals don’t need to go cringing and crawling at any politician in future,” Karunanayake declared.

He also criticised audit firms for not being conscientious enough in checking the balance sheets of government institutions, especially those like the national airline which had ‘going concern’ issues given huge losses for several years.

"SriLankan Airlines has been making losses for several years with a 32 billion rupee loss in the last financial year. You auditors, have you made a disclaimer?" Karunanayake asked.

"This has been a sad situation. Please stand up to your principles," he said, noting that if the new government does anything wrong it is up to auditors to qualify the accounts and "ensure that professionalism comes back again."

"All have not displayed the professionalism that you should have displayed," Karunanayake said.

He said after taking over as finance minister he was "astonished at the lack of professionalism that has existed."

"Files missing from the ministry, inability to get information in time, public debt 45-50 percent more than what is anticipated" is what the new government inherited, he said.

“Good governance does not mean that we forget all of this and move on as if nothing has happened in the past," he said.

Countries all over the world have been trying to reform public sector financial management on their own and Sri Lanka cannot be an exception.

"However, in this context I must emphasise that I’m not very happy with the reforms initiated by the government of Sri Lanka in the recent past."

Reforms initiated by the previous government of the United National Party with World Bank support had been stopped after the regime of president Mahinda Rajapaksa, who was ousted in the January 8 presidential poll, won power in 2005.

"Reforms initiated by us have been stalled halfway and no headway has been during the period from 2001 to 2003," Karunanayake said.

"In recent past, ARs and FRs (administrative regulations and financial regulations) have been totally sidelined at opportune times," he said.

He said the Financial Management Responsibility Act of 2003 introduced by the previous UNP government would have enhanced transparency and accountability in public finance but had been blocked by Rajapaksa.

"Unfortunately our government had to hand over power. The government which came in did not take up any of these recommendations. The proposed reforms could have prevented corrupt practices which prevailed in the country."


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