Auditor General says govt. debt understated by over Rs.700bn

• Observes over Rs.800bn difference between govt. debt stated by Treasury and CB
• Notes govt. exceeded debt ceiling for 2019 approved under Appropriation Act by Rs.79bn

According to the Treasury, the public debt balance payable by the government stood at Rs.12.18 trillion, at the end of 2019.

However, Auditor General W.P.C. Wickramaratne, making his observation to the 2019 annual report of the Finance Ministry, following an audit test check, pointed out that the Treasury understated the government debt by Rs.701.15 billion, for 2019.

The understated debt includes Rs.318.2 billion Treasury bond liabilities, foreign loans related to the Hambantota Port and several other foreign loans. 

“It was observed that the total liability relating to Treasury bonds amounting to Rs.318,246 million has been understated in the financial statements by December 31, 2019, due to the failure in further adjusting the face value of Treasury bonds issued before the year 2016 to the accounts,” Wickramaratne stated.

He noted that there’s a remaining Rs.172 billion payable for the construction of the Hambantota Port not been accounted in the 2019 financial accounts. 

Further, Rs.8.2 billion worth of foreign loans obtained for phase two of the Hambantota Port Development Project in 2019, have also not been included in the financial statements of the Treasury. 

In addition, the AG’s Department pointed out that Rs.176.84 billion and Rs.33.4 billion obtained in 2019 and in 2018, through foreign loan agreements, had not been accounted as foreign borrowings, at the end of 2019.

The AG’s Department also observed a difference of Rs.843.5 billion in the government debt stated by the Treasury and Central Bank. 

The Central Bank has estimated the public debt balance of the government at Rs.13.3 trillion.
Wickramaratne also highlighted that the government has exceeded the debt ceiling for 2019 by Rs.79 billion, which was approved under the Appropriation Act no 6 of 2019. (NF)