FY 2003 TRANSPARENCY AND ACCOUNTABILITY

UNCLAS SECTION 01 OF 03 COLOMBO 000747 SIPDIS STATE FOR SA/INS STATE FOR EB/IFD/OIA E.O 12958:N/A TAGS: AA AMGT EAID EFIN EINV EPET ETRD CE ECPN SUBJECT: FY 2003 TRANSPARENCY AND ACCOUNTABILITY SURVEY - SRI LANKA REF: STATE 100283 ¶1. Post response to reftel survey request follows. Post consulted IMF and WB rep offices in Colombo and Central Bank contacts in preparing this response. a. Does host government publish national budget in a timely manner? 1 - Does not publish, or publishes with significant delay (three years or more) 2 - Yes, with some delay (one year or more) 3 - Yes, with minimum delay (under one year) ANSWER: 3 - Yes, with minimum delay (under one year) b. Where subnational levels of government are significant, are their combined fiscal positions published? Yes/No. ANSWER: Not applicable (subnational levels of government are not generally significant. Their accounts are published separately.) c. In what form is national budget published? Government publication or newspaper? Private media? Internet? Other? Please indicate. ANSWER: Government publication and summaries are in newspapers and on the internet. d. Please rate the quality and comprehensiveness of fiscal data published. 1 - No adequate system of budget reporting and monitoring and no adequate classification system. There are significant payments arrears, and actual expenditures often deviate significantly from amounts budgeted 2 - Limited system of budget reporting and monitoring with limited classification system. Some payments arrears and deviations between actual expenditures and amounts budgeted 3 - Excellent system of budget reporting, monitoring and a consistent classification system. No payments arrears and actual expenditures equal amounts budgeted ANSWER: 2 - Limited system of budget reporting and monitoring with limited classification system. Some payments arrears and deviations between actual expenditures and amounts budgeted. e. List up to 5 key laws and/or regulations governing public disclosure of revenues and expenditures in the national budget, if applicable and such laws exist. ANSWER: Constitution Of The Democratic Socialist Republic Of Sri Lanka (1978) Finance Act (1971) Financial Regulations (1992) Annual Appropriations Act The Fiscal Management (Responsibility) Act, No 3(2003) �0A; f. Assess adequacy of those laws and regulations establishing fiscal transparency and accountability requirements. 1 - Wholly inadequate 2 - Some recognition and legal foundation, if spotty 3 - Detailed/comprehensive ANSWER: 2 - some recognition and legal foundation, if spotty g. Assess extent to which laws and regulations on fiscal transparency and accountability are implemented and enforced. 1 - Not enforced 2 - Sporadically/unevenly enforced 3 - Fully enforced ANSWER: 2- Sporadically/unevenly enforced. The new Finance (Management) Responsibility Act is only now becoming operational.) h. How would distribution of tax powers and expenditure responsibilities of central government be described? 1 - Unclear 2 - Currently being clarified 3 - Clear and supported by open and stable intergovernmental transfer mechanisms ANSWER: 2-Currently being clarified. i. Does a national audit body or equivalent organization, independent of the executive, provide reports for the legislature and the public on the financial integrity of government accounts? Yes/No ANSWER: Yes, but reports published with delay j. How would the link between non-financial public/state-owned (e.g. extractive industries) enterprises and general government be described? 1 - Poor with semi-independent spending/procurement authority of non-financial public enterprises 2 - Limited independence of spending/procurement 3 - Clear control under central government budget process ANSWER: 2, but more accurately, between 2-3. Enterprises have high degree of independence but several are constrained by their partial reliance on budget resources. Those resources are clearly defined under central government budget process. k. Are privatization processes transparent and published? 1 - No or limited 2 - Moderately transparent 3 - Fully transparent and comprehensively reported ANSWER: 2 - Moderately transparent l. How would the reliability of budget revenue and expenditure estimates best be described? 1 - Unreliable 2 - Moderately reliable 3 - Very reliable ANSWER: 2 - Moderately reliable m. Please provide a short evaluative narrative of host government commitment to fiscal transparency and accountability (not to exceed two or three paragraphs). -- Sri Lanka has achieved a substantial degree of fiscal transparency in areas such as legal and administrative framework, compilation and reporting of fiscal accounts for the central government, and explicit separate and aggregate accounts for the public corporations. This framework has been enhanced by a new Fiscal Responsibility (Management) Act. The Act lays out clear obligations for budget preparation, monitoring and parliamentary review with explicit medium term targets. Success will depend on the effective implementation of this law. To achieve full transparency, additional reforms are needed. These include the proposed multiyear program budget framework, provision of data on accounts payable and commitments, and publication of intra-year data in a timely manner. Consolidated general government accounts need to be prepared and relations between government and public enterprises further clarified. The government has moved recently to improve the oversight role of parliament and this could be enhanced by strengthening the audit process. ¶N. Please list U.S. government-sponsored programs and activities that promote accurate disclosure of revenues and expenditures in the national budgets of your host country. Please also summarize the results of those programs and activities (not to exceed two or three paragraphs). --U.S. Treasury will provide technical assistance to the Sri Lanka Ministry of Finance with an advisor in governmental budgeting for a one-year period from April, 2003. The advisor will focus broadly on revising the budget process to become a management and policy implementation tool. An advisor is also envisioned in the area of government Debt Management, and it is expected that his work will also result in greater accountability and transparency on the debt aspects of the budget. USAID has funded two Technical Assistance advisors who have counseled the government on overall economic strategy and reforms. This counsel, we believe, has influenced the recent moves toward greater openness. End Questionnaire. WILLS