Cablegate: Fy 2003 Transparency and Accountability

This record is a partial extract of the original cable. The full text of the original cable is not available.





E.O 12958:N/A

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


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

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.

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)

f. Assess adequacy of those laws and regulations
establishing fiscal transparency and accountability

1 - Wholly inadequate
2 - Some recognition and legal foundation, if spotty
3 - Detailed/comprehensive

ANSWER: 2 - some recognition and legal foundation, if

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

2- Sporadically/unevenly enforced. The new Finance
(Management) Responsibility Act is only now becoming

h. How would distribution of tax powers and
expenditure responsibilities of central government be
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?


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

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

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

-- 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.


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