Cover Story

International Journal of Government Auditing – October 2005
Sri Lanka

Audit Profile: The Auditor General’s Department of Sri Lanka

Sri Lanka, formerly known as Ceylon, was a British colony until it gained independence in 1948. The nation’s current population is around 19.5 million.

The origin of the present Auditor General’s Department in Sri Lanka dates to 1799. At that time, the head of the department was the Accountant and Auditor General. In 1806, the accounting function was separated from that of the Auditor General, and the title was changed to Civil Auditor General.

In1841, three important offices—the Auditor General, the Accountant General, and the Controller of Revenue—were combined into one position that was held by a senior official called the Controller of Revenue. This arrangement continued for about 66 years. In 1907, three different officials once again held these offices, and the title of the head of the Audit Department was changed to Colonial Auditor. The separate and independent Auditor General’s Department continues today. The title of Colonial Auditor was changed to Auditor General in 1931 with the introduction of a new Constitution granting dominion status to the island.

Mandate, Legal Authority, and Independence

The vision of Sri Lanka’s Auditor General’s Department is to make a significant impact on public accountability in Sri Lanka. Its mission is to promote good governance through the conduct of high-quality audits and to prepare timely and accurate reports to Parliament for the benefit of the citizens of Sri Lanka.

The Constitution calls for the President of the Republic to appoint the Auditor General of Sri Lanka. The Auditor General’s salary is determined by Parliament and cannot be reduced during his or her term of office. The Auditor General is functionally independent within the government, and the department is not assigned to any minister. The Constitution further safeguards the Auditor General’s tenure of office by making it possible for the President to remove an auditor general from office only after a motion is tabled before Parliament and ratified by a majority vote.

Article 154 of the Constitution empowers the Auditor General to audit the accounts of (1) all departments of the government and (2) offices and departments not assigned to any ministry, public corporation, local authority, business, or other undertaking vested in the government under any law.

The categories and numbers of institutions the department audits are as follows:

Category Number
Government ministries 57
Departments 129
Public corporations 239
Provincial councils 8
Local authorities 312
Foreign-funded projects 70
Agrarian service centers 523

The Constitution empowers the Auditor General to obtain the assistance of specialists to examine technical, professional, or scientific problems. It also allows the Auditor General to carry out more than financial audits—it gives the Auditor General implied authority to audit the economy, efficiency, and effectiveness of the operations of public sector institutions. The Finance Act of 1971, which deals with the financial control of public corporations, gives the Auditor General a broad scope of audit, including explicit authority to assess the economy, efficiency, and effectiveness of their operations. The scope of audit relating to all public sector institutions includes financial and nonfinancial aspects.

As the auditor of the accounts of universities and local authorities, the Auditor General of Sri Lanka is vested with surcharge power. The statutes of local authorities empower the Auditor General to

  • disallow any item of accounts contrary to law and charge the amounts to the person responsible for making or authorizing the illegal payment;
  • charge the responsible persons for any sum that has not been duly brought to account; and
  • charge members, officers, or employees of a local authority for any loss that has arisen from their negligence or misconduct.

However, the Auditor General has no power of surcharge relating to the audit of the accounts of government ministries and departments and public corporations, except for universities.


The Public Service Commission appoints the Auditor General’s staff, which consists of 7 deputy auditors general, 13 assistant auditors general, 218 superintendents of audit, and over 1,000 audit examiners. The department also employs 302 nonaudit staff.


The Constitution of Sri Lanka requires the Auditor General to report to Parliament within 10 months of the close of each financial year and when he or she deems it necessary to discharge his or her duties and functions.

Future Prospects

The Auditor General Department’s self-assessment of it strengths and weaknesses, a subsequent peer review by the Netherlands Court of Audit, and a 2002/2003 Country Financial Accountability Assessment Study by the World Bank confirm that public audit in Sri Lanka is weak and that its contributions to promoting financial accountability and good governance can be strengthened. The quality, relevance, and timeliness of audit information reported need to be improved significantly. Both organizational and institutional factors have contributed to the weakening of public audit over the years.

Two major recommendations were made to strengthen the department and to improve its overall audit capability:

  • enactment of an audit act and
  • preparation of an institutional development plan.

Audit Act

Sri Lanka does not have an audit act setting out in detail the duties and functions of the audit staff. After a series of discussions and seminars with officers of the Auditor General’s Department and stakeholders, a consultant with local and international experience prepared a draft audit act. The draft act contains provisions to give the department financial and administrative independence and explicit authority to carry out value-for-money audits. It also provides detailed information on the scope and extent of audit and reporting requirements. The draft act has not yet been submitted to the Cabinet of Ministers and Parliament for approval.

Institutional Development Plan

The National Audit Office of the United Kingdom and the National Court of Audit of the Netherlands, with the assistance of the World Bank, prepared an institutional development plan for Sri Lanka’s Auditor General’s Department. The plan covers the following in detail: human resources, audit methodology, information technology, communications and external relations, and infrastructure.

To ensure early implementation, local consultants are preparing a detailed action plan for the department that includes implementation costs.

For additional information, contact: Auditor General’s Department, Independence Square, Colombo 07, Sri Lanka; telephone: ++(0094)11-2691151; fax: ++(0094)11 2697451; e-mail: