Sri Lanka: Improving Transparency and Accountability in Budget Processes

Posted by Justin Tyson

A TV report posted on YouTube in September 2007 provides a short, but interesting, introduction to debates about improving the transparency and accountability of budget-making in Sri Lanka. Topics covered by the video include: the move away from incremental annual budgets towards Activity-Based Budgeting; the need to have more in depth review of expenditure purposes and outcomes; and, the role of parliament in scrutinizing the budget process.

The video makes reference to the fact that Sri Lanka currently ranks in the bottom half of the benchmark index on transparency and accountability prepared by the the Open Budget Initiative. More details on the index in general, and the Sri Lankan case in particular, can be found here. More details on the open budget initiative can also be found in Duncan Last's March 24 post on Civil Society and Public Finance.

More indepth analysis of certain aspects of Public Financial Management in Sri Lanka can be found in a World Bank report on Public Sector Accounting and Auditing. This report confirms the claims made in the video that despite progress made by the Government of Sri Lanka, for example in simplifying the Financial Regulations, a significant weakness has been the lack of a mechanism for monitoring and reviewing outputs and outcomes of government expenditure.

Here is an excerpt from the the Executive Summary of the Bank's report:

"This Report supports the improved effectiveness of public financial management and government spending in Sri Lanka; it situates local practice internationally, seeks to assess and reduce any observed variance, and supports the ongoing measurement of progress. The application of international standards will strengthen decision-making, management and accountability, and ultimately development reforms. Report recommendations include the progressive adoption of accrual based reporting; attention to summary tables of outstanding public sector accounting and auditing issues; the adoption of International Standards on Auditing in auditing procedures as well as manuals; the improvement of public financial management through a comprehensive reform program, including attention to compliance issues regarding Financial Regulations and corporate governance; the strengthening of post-graduate level accounting and auditing skills; and the preparation of an indicators-based public financial management survey to monitor progress."

Comments

[Marshall Jevons]

We had a link to the video on our January post-
there more links on the topic below;
http://bayesianheresy.blogspot.com/2008/01/talking-about-transparency-vs-real.html