Circular issued to control expenditures of public institutions

(LANKAPUVATH | COLOMBO) –  The Ministry of Finance, Economic Stabilisation and National Policy has issued a circular pertaining to controlling the expenditure of state institutions, including overtime payments, travel allowances and welfare.

Issuing the circular, the Finance Ministry emphasized that in the current challenging economic environment, the fiscal space has become extremely limited due to the increase in public expenditure and limited government revenue.

Furthermore, it stated that since cost reduction has been recognized as a priority in the short-term plans on the path to economic recovery, government expenditures should be frugal, regulations and circulars to reduce costs should be strictly adhered to, and cost control strategies should be used to suit the nature of each institution.

However, the Ministry of Finance has instructed all public institutions through the circular that government funds should not be used for conducting festivals, gatherings, exhibitions, convocations, opening ceremonies, conferences, etc., except for the functions specified in the annual estimates as national festivals and for which the provisions have been earmarked.

In addition, it is also mentioned that in order to avoid sudden purchases, needs should be identified early, and procurement activities must be implemented in accordance with approved procurement plans to minimize delays.

The circular allows no new recruitment to fill vacancies even for essential positions without due approval of the Management Services Department.

The government organizations in commercial form that do not receive funding from the treasury are instructed to take all possible measures to cover their expenses and they should not request funding from the treasury in consideration of the lack of income, as per the circular.

Furthermore, the ministries, departments and all government institutions are ordered to make arrangements to ensure that the provisions of the relevant circular and the methods of cost management are implemented during the audit and management committee meetings.

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