The Hon. Wasantha Pushpa Kumara

¶ 01 Hon. Deputy Chairperson of Committees, thank you for the opportunity.

¶ 02 There is a need to amend the National Audit Act, No. 19 of 2018, to ensure that public funds are properly managed within the State and that services reach the people. The National Anti-Corruption Action Plan 2025–2029 recommends strengthening the audit legal framework and its enforcement. The IMF Governance Diagnostic Assessment 2023 noted that links between audit and enforcement had been weakened, including by Section 9 of the 2018 Act which restricts sharing audit information with law enforcement—hampering investigations and arrests.

¶ 03 Key proposed changes include: - Removing “negligence” as the sole basis for surcharge and introducing a structured process to impose surcharges. - Referring decisions on surcharges and amounts to a Surcharge Review Committee appointed through due process, instead of leaving such powers solely to a single political authority or a principal accounting officer who may be closely connected with the political leadership. - Enabling the Auditor-General, upon reasonable belief of fraud, corruption or misuse in a transaction, to lodge immediate complaints with law enforcement via the Cabinet Secretary, even where principal accounting officers are implicated.

¶ 04 At present, the Auditor-General can directly levy surcharges only on local authorities and State universities under their governing statutes. For ministries and departments, the Audit Service Commission reports to the principal accounting officer, who has original power to impose surcharges equal to the loss or deficiency; if the principal accounting officer is implicated, the Treasury Secretary or President may act. The amendment creates an independent Surcharge Review Committee to assess and recommend surcharges, reducing political influence and technical blind spots.

¶ 05 The Surcharge Review Committee will have five members: - A retired Supreme Court or Court of Appeal Judge as Chair; - Three experts drawn from audit, law, public financial management, public administration, or engineering; and - One member nominated by the Institute of Chartered Accountants of Sri Lanka.

¶ 06 These reforms meet public expectations for prudent use of State funds and better service delivery. Earlier, in 2018, some reforms were proposed but were not fully incorporated by the then Government. Today, under our own President and Government, we are advancing these necessary improvements to public financial management. Thank you.