Accounts Division

The procedure for preparing the annual budget of the Local Government Institution from January 01 to December 31 is Section 168 of the Pradeshiya Sabha Act No. 15 of 1987.

The following programs should be considered by a local government in preparing its budget.

1. Public Administration
2. Health Services
3. Physical Planning
4. Highways, Land and Buildings
5. Water Services
6. Other Utilities
7. Welfare Services

Expenditure is classified under the following major expenditure heads for each of the above programs.

1. Salaries and Allowances
2. Travel Expenses
3. Supplies and Equipment
4. Repairs and Maintenance of Capital Assets
5. Transportation Necessary and Other
6. Interest Payments
7. Dividends and Bonuses
8. Contributions and Subsidies
9. Pensions
10. Retirement Benefits and Gratuities
11. Capital Expenditure
12. Repayment of Loans

Local Government Institutions are independent institutions. The powers vested in them by ordinances and acts have been clarified in the said acts as to how the council fund is constituted and under what subjects the fund should be used.

Also, an accounting system specific to local government institutions has been introduced for this purpose. It is expected that the money received by the council fund is properly accounted for and that the money is spent only for the specified expenses.

The special feature of the existing accounting system of local government institutions is that receipts and payments are recorded on a cash basis for a year starting from January 01 and ending on December 31 and at the end of the year (it can also be done at the end of a quarter.) In preparing the accounts, the said receipts are calculated on an accrual basis as income and the payments as expenses. At the end of the year, if there is any income to be collected from the account for the year, it is carried forward as arrears of income and at the end of the year, the amount is transferred to the creditors for further expenditure. The income and expenditure for the year are calculated and if there is a surplus or deficit, it is transferred to the accumulated fund and the accounts are settled.

To accomplish this task, a uniform accounting system was not used in the local government bodies, namely the Metropolitan Councils, Urban Councils, Suburban Councils and Village Councils. The rules and financial control systems used for each local government institution were included, but there was no clear set of rules regarding financial management.

In order to create unity instead of the various accounting systems that existed, an accounting system was introduced by Gazette Notification No. 96 dated January 25, 1974, which was consistent with the program budget system and was introduced as the “Wikramanayake Accounting System”. Moreover, the accounting system was based on the double-entry accounting system, and suitable forms and documents were also introduced and these documents were also named as self-balancing accounting documents.

Self-balancing accounting documents are documents that balance vertically and horizontally, including billing and receipts.

With the introduction of the “Wikramanayake Accounting System” for Municipal Councils and Urban Councils, it is stated that the final accounts should be prepared on or before March 31 of the following year and submitted to the Auditor General, but this is not implemented as a rule. In the case of Pradeshiya Sabhas, as per the rules published in the Gazette Extraordinary, Part IV (b) No. 554/5 of 17 April 1989, the final accounts should be prepared on or before March 31 of the following year and submitted to the Auditor General, as per rule 168(1). Bank reconciliation reports should be submitted as evidence of the verification of cash balances. Copies of the final accounts should be sent to the Commissioner of Local Government and the Assistant Commissioner of Local Government.

Procurement

The General Assembly and the Finance Committee shall act as the Tender Board in accordance with the Pradeshiya Sabha Rules 178 of 1988

The rules and instructions of the Pradeshiya Sabha Rules 178 of 1988 and the Procurement Guidelines of the Democratic Socialist Republic of Sri Lanka 2006 and the Procurement Procedures Code 2006 shall be followed.

A supplementary budget estimate should be prepared for a budget document prepared by a Pradeshiya Sabha for a particular year, in which the expected allocation limit is exceeded or for a non-allocated item or expenditure item. After preparing the supplementary budget estimate, a proposal should be submitted to the Maha Sabha and approved. It should then be included in the annual budget.

After adjusting the balance of the institution’s cash account, the bank reconciliation statement is prepared. The balance of the statement sent by the bank,

The value of the checks not presented to the bank during that period should be reduced.

The bank should add or subtract the errors and omissions that have occurred in the reporting of transactions as appropriate.

Furthermore, if there is any remaining amount, it should be added to the balance of the bank statement.

The bank reconciliation statement prepared after adjusting in this way should be sent to the Audit Superintendent and the Assistant Commissioner of Local Government for audit before the 10th of every month. In addition, if the checks issued by the institution have not been presented to the bank for 06 months, they should be treated as income in accordance with Financial Regulation 394.

1. Obtaining information on the fees to be revised from the officers concerned (first week of September)
2. After receiving the information, submitting proposals to the Finance Committee (last week of September)
3. After receiving the approval of the Finance Committee, submitting to the Management Committee or the General Assembly and obtaining approval on the relevant fees and amendments (first week of October)
4. Translating the approved proposals into languages ​​for publication in the three languages ​​of Sinhala, Tamil and English (October)
5. Submitting the Gazette prepared in the three languages ​​to the Government Printing Office for publication in the Government Gazette (November)

(PDF of the relevant Gazette for this year will be provided.)

Gazette Number and Date – 2363 – 2023/12/15

Supplier Registration

Tax and Fee Registrations

• VAT
• Stamp Fee

Procedure Setting

• Getting details of salary increments and arrears with approval after checking as per the schedule.
• Filing the allowances (benefits, festive advances, special advances, disaster loans) received from the institution subject to approval.
• Filing the allowances and bank loan installments, property loans received from other institutions subject to approval.
• Calculating, checking and approving maternity leave, unpaid leave.
• Entering all additions and deductions correctly in the salary register.
• Accessing the relevant software for salary processing.
• Setting the date of the computer according to the previous month.
• Performing the last process in the GPS process (month end process) for the previous month
  Resetting the date of the computer.
• Entering the relevant data after confirming the accuracy of the salary summary.
• Checking the salary register and salary slips (GPS pay slip) and correcting if there are any errors.
• Getting the data printed.
• Get the salary list and GPS pay sheet checked by a staff officer.
• Prepare and check the vouchers related to the payment of salaries and obtain approval.
• Write checks by entering the data in the cash book according to the account summary.
• Submit the checks for signature along with the account summary as prescribed.
• Correctly prepare the checks and submit them with the list of errors for bank deposit.
• Forward other errors to the relevant institutions via registered mail.
• Get the salary slips signed and distribute the salary slips.

Circulars used for salary preparation

• Public Administration Circular 04/2010
• Public Accounts Circular 225/2012
• Public Administration Circular 03/2022
• Provincial Treasury Circular 03/2022(1)
• Public Accounts Circular 234/2013
• Public Administration Circular 03/2024