Sri Lanka lags behind Uganda in financial information and due diligence

Sri Lanka lags behind Uganda in financial information and due diligence

23 July 2019 03:15 pm

Sri Lanka is lagging behind Uganda, a low income country in financial information and due diligence reporting standards, Committee on Public Finance (COPF) in its latest report revealed.   

In 2017, Uganda reported a per capita GDP of US$ 606, as against Sri Lanka’s US$ 4,074. Uganda is classified as a low income country, whereas Sri Lanka is considered better off as a lower-middle income country. 

Nevertheless, a comparison of the budget reporting practices reveals that the finance bureaucracy of Uganda performs better than the bureaucracy of Sri Lanka in their compliance with information standards and due diligence, the report claimed.

According to a case study of the COPF, Sri Lanka is following a path of decreasing due diligence, while other countries, that have started behind, are improving and overtaking Sri Lanka.

The initiative conducts a deeper enumeration of the available budget information in the  TOW countries. 

This enumeration reveals a negative comparison between Sri Lanka and Uganda, where information that is not provided budget or limited in Sri Lanka, is available in full in Uganda. 

 A timely and full Mid-Year Fiscal Review is not published by Sri Lanka. It publishes a mid-year report, in line with the Fiscal Management (Responsibility) Act, No. 3 of 2003 and its amendments which provides only a review of the first four months. 

Sri Lanka publishes an additional report, the Fiscal Management Report, covering the first eight months, but this report becomes available only in November, with the release of the new budget for the upcoming year. 

However, Uganda adopts a standard, which is also used globally to publish a review of the first six months within eight months into the corresponding fiscal year.

The need of an independent budget office that serves Parliament is reinforced when comparing budget reporting in the two countries. 

In Uganda, unlike in Sri Lanka, a Parliamentary Budget Office (PBO) is already in place since 2001. 

This was established with the purpose of creating technical capacity to support Parliament and its Committees in interpreting national budget and economic data and in producing objective, timely and independent analysis needed for legislative oversight over public finance. 

The establishment of a similar independent body attached to Parliament of Sri Lanka will enhance the Legislature’s oversight functions over public finance. 

This has become increasingly necessary, considering the need for informed consent of Parliament in decision-making, especially in the interests of the public, COPF said.