Sri Lanka parliament committee slams abuse of discretionary budgeting

ECONOMYNEXT – A Sri Lankan parliament committee has highlighted what it called “misuse of discretionary budgeting” by the finance ministry and recommended restricting such spending to less than five percent of total expenditure.

The increase in discretionary budgeting was one of the key concerns flagged by the
parliament report in public finance.

The finance ministry has said it has now restricted such discretionary budgeting to two percent of total spending.

The parliament Committee on Public Finance said there had been misuse of discretionary budgeting especially with regard to buying vehicles in previous budgets that had not been disclosed transparently in the budget estimates provided to parliament.

“The concern is heightened by the fact that allocations to be used under such circumstances are placed under a budget subheading called, ‘Supplementary Support Services and Contingent Liabilities’ which is in Section 6 of the Appropriation Bill, under the budget head of Development Activities of the National Budget Department,” it said.

This was explicitly authorised to be spent in a discretionary manner by the government with very wide scope, regardless of the original stated purpose of the allocation.

The only condition is that Parliament be notified of the transfer, its amount, and its reasons after the fact, within two months of the date of transfer.

“This allows for abuse of the budgeting process, which has taken place in the past,” the report said.

The Ministry of Finance has accepted that drawing from this budget head has been the standard practice for funding the purchase of vehicles.

But the parliament committee opposed the practice, saying that providing Parliament the power to scrutinize and pre-approve such expenditure in advance, as in normal budgeting discipline, was better.

The COPF said it recognizes the need for issuing supplementary appropriation bills for unanticipated expenditure requirements but noted they should be under “exceptional circumstances, and not as a standard practice.” (COLOMBO, 10 July, 2019)