Govt. to appoint committee to check State accounts

• Committee to comprise public and private sector members
• CA Sri Lanka President named one of its members
• PM says govt. reported to House all finance issues post the bond issue
• Report on State accounts to be sent to public finance committee and Parliament

By Yohan Perera

The government will appoint a committee comprising public and private sector members to look into State accounts and especially the country’s debt statistics, Prime Minister Ranil Wickremesinghe said on Thursday.

The Prime Minister said this at the induction of Jagath Perera as the 24th President of the Chartered Accountants of Sri Lanka (CASL) in Colombo.

Sri Lanka’s Auditor General Gamini Wijesinghe this week told reporters that he could not give out a correct number for Sri Lanka’s national debt because certain debts have been taken off the books and transferred to different places to circumvent the ceiling on borrowing set by the law.
“I told your new president that his first job was earmarked by us. After the recent statements on the State accounts of the previous administration, we thought we should check on them again and send all information to Parliament.

“Therefore we appointed a committee and the President of CA Sri Lanka one of its members. One would represent the monetary Board and there will be one more in it,” the Prime Minister said.

He said the CA Sri Lanka President was chosen to represent the committee because of his Forensic accounts background.

“The Parliament is sovereign and we have to report back to Parliament on financial issues. The right of Parliament over the control of finance was forgotten earlier. However it is now restored. This is because we want to maintain transparency. We have reported to the House on all outstanding issues regarding finance.

“We have started this practice after the bond transaction allegation came in. The matter regarding the bond issue went into one committee and to COPE and then into Parliament. On the State accounts issue we want to have a report sent to the public finance committee and then to Parliament. We will also have a legislation to have a Parliament debt office,” he added.

Wickremesinghe said the government spent the years 2016 and 2017 stabilizing the economy. He said the government had managed to increase government revenue.

However the Prime Minister said the country will have to face the bunching up of debt services, of development bonds and of international sovereign bonds. It is substantial from 2018 to 2022.

“We will have to repay US $ 4.9 billion for international sovereign bonds and Sri Lanka development bonds. Treasury bonds come to US $ 12 billion when these bonds mature between the years 2018 and 2020. This is what we have to pay in all these years. My mother used to say that one must pay one’s debts and should not keep them for too long. We have to repay the bill. We have to pay a tremendous amount,” he also said.
He said over Rs.4.5 trillion has been raised by the bond market in the years 2008 to 2014, out of which only Rs.500 billion has been raised by auctions. A sum of Rs.4 trillion has been raised by private placements.

“To-date having two governors searched for it, we have not found the monetary board authority for private placements. We have argued this in Parliament, you can have your views whether good or bad but the problem is there is no authority. This is no single authority on the monetary board and we have issued Rs 4 trillion. Therefore whenever we have a serious allegation on State accounts we have to look into it,” he stressed.
The Prime Minister further said that the government will come up with new legislations to cover the bonds.

“I consulted the Attorney General and he told me that there are sufficient provisions in the law under which bonds in the hands of bona fide holders could be considered valid. I told him we will come up with new legislations to cover the bond holders. These are some of the problems we faced in managing government debts. The first thing is to see how to crowd out debts. If you are going to pay off these debts with minimum government revenue, just imagine the interest rates in the domestic markets. These are issues we have to tackle,” he pointed out.