The Auditor General, at his discretion, decides on the scope of audit, and in this regard, he is guided by the prevailing standards as introduced in terms of the provisions in the Sri Lanka Accounting and Auditing Standards Act No. 15 of 1995 and conventions and best practices relating to audit as adopted by the Institute of Chartered Accountants of Sri Lanka(ICASL), the International Organization of Supreme Audit Institutions(INTOSAI), the Asian Organization of Supreme Audit Institutions (ASOSAI), and the guidance provided by the Committee on Public Accounts (COPA) and the Committee on Public Enterprises (COPE) of Parliament.

Further to that as regards Public Corporations, the Finance Act, No. 38 of 1971 defines the scope of audit to be considered by the Auditor General in relation to Public Corporations in more specific terms and it requires the Auditor General to render three distinct statutory reports viz. a detailed report to the management of the Corporation, a report for publication together with the Annual Report of such Corporation and another separate report to Parliament. The scope of the audit as defined in the Finance Act requires the Auditor General to examine as far as possible and as far as necessary the following.

• Whether the organization, systems, procedures, books, records and other documents have been properly and adequately designed from the point of view of the presentation of information to enable a continuous evaluation of the activities of the corporation, and whether such systems, procedures, books, records and other documents are in effective operation;

• Whether the conduct of the corporation has been in accordance with the laws, rules and regulations relevant to the corporation and whether there has been fairness in the administration of the corporation;

• Whether there has been economy and efficiency in the commitment of funds and utilization of such funds;

• Whether systems of keeping moneys and the safeguarding of property are satisfactory;

• Whether the accounts audited have been so designed as to present a true and fair view of the affairs of the corporation in respect of the period under consideration with due regard being given to principles of accountancy, financing and valuations; and

• Any such other matters as the Auditor General may deem necessary.

• Power to impose Surcharges

  The respective statutes relating to Local Authorities and Universities provide for the Auditor General to disallow and surcharge on those responsible in respect of the following;

  • all deficiencies and losses incurred by the negligence or misconduct;

  • all items in the accounts that are contrary to law;

  • all accounts that should have been brought to account but not brought to account as required.

  However the relevant legislations also provide for making appeals by the affected party against such surcharges. The relevant Minister is the appellant authority for surcharges relating to Local Authorities whilst the Chairman of the University Grants Commission is the appellant authority for Universities. However no such power has been vested with the Auditor General by any law with regard to Ministries, Departments, Public Enterprises or any other public institution other than Local Authorities or Universities.

• Reports submitted to Parliament by the Auditor General

  The Auditor General’s primary responsibility in terms of Article 154(6) of the Constitution is to report his audit findings to Parliament. The reports that are presented to Parliament are based on detailed audit reports submitted to managements of the respective public institutions coming under the purview of his audit from time to time as and when important audit findings are made. Generally the Auditor General makes his audit observations after giving the maximum possible opportunity to the auditee institution to make needed clarifications by auditee institution to review such draft audit reports to enable to incorporate the quality of objectivity into the reports.

  To be fair by all parties concerned, an opportunity is offered to the relevant institutions to submit their observations on the draft audit reports before they are tabled in Parliament. In this context, all draft audit reports sent are based on audit queries issued to the management for their comments. During the finalization of the audit report opportunity is also given to discuss the audit matters with the relevant Divisional Heads of my Department. However it appeared that very few Heads of the institutions had utilized this opportunity to express their views on the draft report. Occasionally,officials who appear before the Committee on Public Accounts and the Committee on Public Enterprises.

• Reports submitted to the Auditee by the Auditor General

  Auditor General’s reports are sent to the Heads of the Institutions concerned such as Secretaries to Ministries (Chief Accounting Officers), Heads of Departments (Accounting Officers), Chairmen of Public Corporations (Accounting Officers) and Heads of Local Authorities (Accounting Officers), etc. Some of these reports are made in conformity with specific statutory requirements such as, in the case of Public Corporations, the statutory report is furnished in terms of Section 13(7)(a) of the Finance Act, No. 38 of 1971, to the Chairman of the Corporation.

  Summarized reports based on these detailed reports are furnished to the Chairmen of Public Corporations and in the case of Universities to Vice Chancellors of Universities in terms of Section 14(2)(c) of the Finance Act No. 38 of 1971, together with the opinion of the Auditor General on the financial statements as to the financial performance and financial position, for publication with the Annual Reports of such institutions. Today it is a universally accepted fact that the roles and functions of audit and management are complementary to each other and the aims, purposes and objectives of the both are identical in the context of public accountability. A study of audit reports, specially the detailed reports would enable the managements to identify the deficiencies, shortcomings and irregularities prevailing in their domain, and to determine the needed corrective action to be taken and to effect improvements.

  It is, therefore, the responsibility of the management to endeavor to achieve the predetermined goals and objectives having due regard to economy, efficiency, regularity and propriety as manifested where the public sector auditor makes a constant review and an objective assessment for reporting to take corrective measures needed to pave the way for enhancing the public accountability.

• International Representations

  • The Auditor General’s Department contributes to the development of auditing standards, professional practices and exchange of experience through participation in-

  • International Organization of Supreme Audit Institutions (INTOSAI)

  • Asian Organization of Supreme Audit Institutions (ASOSAI)

  • Commonwealth Auditors General Conferences

  • Several Working Groups of the INTOSAI