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Sunday, 03 July 2016





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Government Gazette

'Miscommunication over calculation of state borrowings' - Eran Wickramaratne

There has been a change in the current calculation of government borrowings. Instead of the net borrowings of Treasury Bills the total borrowings through Treasury Bills has been substituted which has caused confusion, Deputy Minister of State Enterprise Development Eran Wickramaratne told an interview with the Sunday Observer, in response to the Auditor General's Report on government borrowings.

Q: What is your view on the Auditor General's Report on government borrowings?

A:There has been a miscommunication with regard to the calculation of government borrowings which needs to be clarified. In the past, the total borrowing was calculated to check whether it fell within the approved borrowing limit. The borrowings through Treasury Bills were netted out with the repayment of Treasury Bills during that period. It is the net borrowings of Treasury Bills that was used in calculating total borrowings. The net borrowings of Treasury Bills, other domestic and foreign borrowings equated the total borrowings.

This was the figure monitored against the approved borrowing limit. By this calculation it could be checked whether total borrowings are within the approved limit. However, there has been a change with the method adopted in the past. The net borrowings of Treasury Bills has been substituted with the total borrowings through Treasury Bills.

A note to the Auditor General's Report could have avoided the confusion whether the country had exceeded its borrowings over the approved limit. The country would have exceeded its approved borrowing limit every year, if this new method of calculating was applied during the past 10 years. Therefore, any change in the method of accounting should be explained with a note to the accounts or opinions expressed.

Q: How do you respond to the accusation levelled by opposition MP Prof. G.L. Peiris that the Joint Opposition is of the view that Finance Minister Ravi Karunanayake had tried to influence Auditor General Gamini Wijesinghe on audit standards and the decision on the COPE investigation on the bond scam by the former Central Bank Governor Arjuna Mahendran, by inviting the Auditor General to the Finance Ministry last week.

A:The Auditor General is an independent constitutional position. No one can intimidate him or her and the government is committed to protect its independence. A question does not arise on the behaviour of the Auditor General which will be safeguarded by Parliament. The comments by Prof. G.L Peiris were made on the opinion expressed by the Auditor General and the lack of clarity in the opinion. The comments made by Prof. G.L Peiris are misleading.


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