PUBLIC FINANCE

INTRODUCTION

1. The Parliament of Sri Lanka is the highest law making authority in the country and its members are elected by the people of Sri Lanka. The Parliament consists 225 members which represent different political parties of Sri Lanka. It reserves the power to make all laws of the country. The Speaker or, in his absence the Deputy Speaker presides over Parliament. The President has the power to summon, suspend, prorogue, or end a legislative session and to dissolve the Parliament.
PARLIAMENTARY CONTROLOVER PUBLIC FINANCE

2. The Parliament has full authority to control over public finance of the country. Therefore, the parliament has imposed some rules and regulation when handling the public finance matters. The parliament controls and ensures the accountability of a government for the collection of revenue and its expenditure. Parliamentary control of finance strikes at the very roots of parliamentary democracy. That is why the control of finance is always vested with parliament and never with the executive in a democracy.
3. Mainly the public finance is controlled by the parliament with the following regulatory frame work.
a. Constitution.
(1) Article 148 - Full control over the public finance with the Parliament.
(2) Article 149 - All government revenue flows in to the consolidate funds.
(3) Article 150 - Withdrawal of sum from consolidating funds.
(4) Article 151 - Parliamentary Control over the Contingencies Fund and unforeseen expenditure.
(5) Article 152 - Special Provisions as to Bills affecting public revenue.
(6) Article 153 - Appointment of auditor general.
(7) Article 154 - Duties and functions of Auditor-General.

b. Fiscal Management responsibility Act No. 3 of 2003.
c. Annual appropriation Act.
d. Enabling Acts of parliament.
e. Finance Act No 38 of 1971.
Regulation which empowered to control the public finance.
a. Financial regulation
b. Establishment code
c. Treasury circulars.
d. Ministry directives.
e. Manual of procedures
f. Public enterprises guidelines for good governance.
g. Procurement guidelines.
Other institutional arrangement for the control of public finance by the Parliament.
a. Committee on public Account (.COPA)
b. Committee on public enterprises (COPE)
c. Auditor General
d. Internal Audit
e. Central Bank of Sri Lanka
f. Chief accounting Officer
g. Accounting Officer
Committee on public Account (COPA)
4. This committee is set up under the standing order of the parliament. This committee is included 21 parliament members from the both sides of the House appointed by the committee of selection. The main function of this committee is to examine the appropriation accounts and other accounts laid before the parliament along with the auditor general’s reports and to report to parliament on accounts examined, finances, financial procedures, performance management and any other matters .Further this committee has authority to summon and question any person and called for an examine any paper, book or other document and have access to stores and property.
Committee on public Enterprises (COPE).
5. This committee is set up under the standing orders of the Parliament and includes 21 members from the both side of the House nominated by the committee of selection. The main task is to examine the accounts of public cooperation and of any business and other undertaking vested under any written law in the government laid before the government. Further, report to parliament on the accounts examined budgets and annual estimates and finances and also committee has power to summon and question any person and called for an examine any paper, book or other document and have access to stores and property.

Role of the ministry of finance and planning

6. The Ministry of Finance (MOF) is the government agency that plays a key role in developing fixed-income securities markets. On behalf of the government the Ministry usually act as the official issuer of public debt instruments. The main role and responsibility of the Ministry finance is to create a prosperous society for all the citizen of Sri Lanka and to have them a better quality life. The Main role which play by the finance ministry are providing the necessary financial and economics policy frame work and allocating the resources to facilitate the provision of public services. Following are the main role and the function of the Ministry of finance.
a. Formulation of national economic and financial policies and strategies.
b. Formulation of fiscal and macro fiscal policy management.
c. Preparation of national development and public investment programs.
d. Preparation of the annual budget and management of financial resources
e. Management of national tax policy and effective use of government revenue.
d. Coordination with the Central Bank on the formulation of monetary policies and overall macro economic management.
e. Coordination of public and private sector activities and facilitation of the private sector for economic development.
f. Coordination with international agencies and mobilization of foreign resources ensuring their effective use.
g. Liaising with donor agencies and international financial institutions.
h. Enforcement of government financial regulations.
j. Execution of the national budget and enforcement of budgetary controls.
k. Management of Consolidated Fund.
l. Overall management of revenue agencies.
m. General administrative and monitoring functions in respect of state banking and financial institutions.
n. Cadre Management and Advisory Services on fixing of salaries
o. Co-ordination of public and private sector activities for economic development.
p. Co-ordination of economic policy in relation to international economic agencies.
q. Collection, compilation, analyses and dissemination of statistics.
r. Liaison with Donor Agencies and international financial institutions.
s. Financial reserves of the government.
t. Financial Relations between Government and Provincial Councils and Local Authorities.
u. Overseeing of Departmental and other public funds.
v. Departments’ Statutory fees and charges.
w. Security of Public Officers’ Government Insurance Fund.
x. Contracts and Extra contractual payments in the public sector.
y. Delegation of financial responsibility Claims against the State.
z. Treasury Minutes on reports of the Public Accounts Committee.
aa. Insurance on Government Contracts.
ab. Financial business with Agents and Embassies abroad .
ac, Impress, Advances and deposits from the Treasury.
ad. Bringing to account transactions of all departments.
ae. Receipts and payments on behalf of other Governments.
af. Preparation and Publication of the accounts of the Government.
ag. State Accounts.
ah. Sanction of Official Bank Accounts .
aj. Custody of Duplicate Keys of Government safes.
ak. Cash and Bank balances of Government.
al. Classification of receipts of Government .
am. Government Investments.
an. Loans to Corporations, Bank Guarantees to Government Departments, State Corporations and Boards,
ap. Fixing the dates for the payments of salaries.
Aq. Payments outside the Island.
ar. Accounting of Foreign Aid .
as. Authorised deductions on pay abstracts
at. Provident, Guarantee, Benevolent, Benefit and other funds relating to Government Officers.
au. Financial relations between Government and Statutory Boards and Corporations.
av. Appropriation of Profits of State Corporations.
aw. Repayment of loans to the Consolidated Fund.
ax. Enforcement and administration of the Customs Ordinance.
ay. Enforcement of the Excise Ordinance .
az. Valuation on behalf of Government, Local Government Bodies and State Corporations.
ba. Mobilization and Investment of domestic savings.
bb. Control of Insurance.
bc. Economic Reforms.
bd. Capital investment and Capital Structure of State Corporations and Boards
bc. Foreign Aid and Technical Co-operation.
bd. Administration of all Lotteries.
be. Control of imports and exports
7. To carry out the above role and the function of the ministry of finance and planning, the following institutes are mainly responsible.
a. Department of National planning.
b. Department of Fiscal Policy
c. Department of External Resources.
c. Department of National Budget
d. Department of public enterprises
e. Department of management service
f. Department of legal affairs
g. Department of revenue administration
h. Department of management audit
j. Department of trade, tariff investment policy.
k. Department of development finance
l. Department of Public Finance
m. Department of Treasury Operations.
n. Department of State Accounts.
8. Role and function of department of national planning.
a. Preparation of a long term / Medium term Development Plans and the Investment Programme.
b. Development of a macro-economic framework, strategies.
c. Review of economic development policies, strategies, programmes and project appraisal.
d. Provision of technical inputs for the preparation of the Capital Budget.
e. Preparation of the project Pipe Line.
f. Preparation of observations on Cabinet Memoranda.
g. Implementation of special tasks assigned to the Department.
h. Secretariat to the National Economic Development Council.
9. Roll of the Department of Fiscal Policy.
The main roll of this department is to preparation of the fiscal Management Report annually and Placed before the Parliament by the Honorable Minister of Finance as required under the Fiscal Management (Responsibility) Act No. 3 of 2003

10. Department of External Resources.

This department control over the ministry of finance and it is responsible for the overall management of the foreign aid and donor fro folio. Mainly this department is responsible for the introducing the new strategies for the donor funding and distributing the funds as per the priorities. Further department is responsible for the monitoring of debt of the government.

11. Department of National Budget.
On behalf of the ministry of finance, this department is responsible for the preparation of annual budget and medium term budget annually and as per the government requirement. Forecasting of annual expenditure and income and making of proposals.

12. Department of public enterprises
Main roll of this department is to monitoring and supervision of public enterprises and supervision of privatization transaction.

13. Department of Management Services
This department is responsible for formulation of carder management policies and strategies of the government organization.

14. Department of legal affairs
This department assists to draft of legalization in coordination with the legal department and the attorney Genaral.

15. Department of revenue administration
Main function of this department is to monitor the performances of the revenue department and coordinate all the operation of the exercise , customs and inland revenue department and the board of investment.

16. Department of management audit
Main role of this department is to review of financial and performances audit and to undertake investigation on alleged financial irregularities.

17. Department of trade, tariff investment policy
Main roll is to administer the customs laws and trade policy strategies and monitoring and coordinating of trade agreement investment policies.
18. Department of development finance
Main function is to formulate and development fiancé strategies and to assist development financial institutions on policy related issues.

19. Department of Treasury Operations.
This department is mainly responsible for the cash management of the government and execution of budget. Further, this department is responsible for the management of domestic liquidity and government balance within prudential limits.
20. Roll of the Department of Economic Policy Research.
This Department is totally responsible for the formulation of the policies and strategies relevant to the fiscal matters and this department is controlled by the ministry of finance and it is responsible for the
21. Department of State Accounts.
This department is responsible for the preparation of monthly quarterly state account and preparation of government financial statistics.

22. Department of Public Finance
Roll of this department is to coordinate overall government procurement and coordinate all aspect relating to the financial regulation.

23. Conclusion
. Today there is a need to strengthen parliamentary control over public finances as perhaps the most significant area of governance and accountability that requires institutional capacity building. Ministry of finance also plays a key role on the financial matters of the County.


Bibliography

1. www.treasury .lk
2. Lecture notes.
3. Public finance 7th edition by RK Harvey S Rossen.
4. Mid year fiscal report 2008.
5. Parliament and public accountability in Sri lanka, prof: WA Vishwa warnapala