More transparency needed when implementing budget proposals

Three out of the six budget documents published in Sri Lanka have fallen into the lowest category of comprehensiveness that include viz the citizens’ budget, the in- year reports, and the audit reports.

The mid-year fiscal report of the Ministry of Finance did not even qualify for the Verite Research survey as it did not include the details required to meet international standards. Comprehensiveness and consistency of documents relating to budget proposals is a prerequisite to qualify for Open Budget Survey ( OBS) ratings, said Lahiri Jayasinghe Assistant Analyst of the Economics Team, of Verite Reaearch speaking on the topic of “Sri Lanka’s budget transparency: Improving but still behind international standards” at a webinar organised by the Verite Research office in Colombo recently.

She said currently Sri Lankan citizens receive no opportunities for participation during budget implementation. To change this position the Ministry of Finance can pilot mechanisms to include opportunities for public inputs during budget implementation and proactively engage inputs of vulnerable communities and well formulated budgets can ensure better implementation. The mid- year review and in– year reports are critical in monitoring the progress of the budget implementation. Hence it is important that the government makes these reports more comprehensive and make them available in more consistent formats.

Meanwhile The Open Budget Survey (OBS), the only independent assessment on world public budgets conducted every two years has found that Sri Lanka stands at 54th position out of 117 countries where the 2019 budget is concerned .

Ms. Jayasinghe said on the transparency score of 47/100 Sri Lanka has been gradually improving its budget transparency, from a score of 39 and 44 in the 2015 and 2017 cycles of the (OBS).

However despite improvements, Sri Lanka’s score still falls below the minimum bench mark score of 61 needed to be classified as having a sufficient level of budget disclosure under international standards. “Although we are above the global average of 45, Sri Lanka has not moved ahead of other countries In terms of the rankings. But out of the regional countries in the SAARC region we are in the 3rd place out of the six countries according to the OBS.” Referring to data reporting she said that it should be in a consistent format.

Meanwhile Sri Lanka’s National Audit Office provides adequate levels of oversight ( 78 out of 100). However Sri Lanka’s parliamentary oversight is weak ( 36 out of 100). Parliament and its committees act as an important check on the Ministry of Finance and the line ministries by approving the drafted budget and tracking its implementation. The Ministry of Finance can strengthen oversight by consulting Parliament before funds are shifted from its allocation in the enacted budget.

There is both legislative and parliament oversight which is below the global average. The parliament oversight fell due to want of time to study budget proposals in detail. The important thing is that parliament should be consulted before the budget proposals are made and before funds are shifted. Even certain reports pertaining to public finance were not made available in time to assess the situation. Reports of the Public Finance, Public Enterprise and the Public accounts are crucial in formulating budget proposals. However Sri Lanka has scored 17 out of 100 in the public participation category to improve public participation in aspects of budget implementation. Research has shown that although large proposals are introduced in the budget speech implementation it falls short of what is promised. Effective implementation requires well formulated budget proposals that are feasible to implement. It is essential that all revenue and expenditure proposals in the budget are backed by detailed estimates and calculations in order to strengthen its implementation.

Research Director Verite Research, Deshal de Mel also addressed the webinar.