MINISTRY OF IRRIGATION & WATER

RESOURCES MANAGEMENT

SRI LANKA

Current Accounting System & Upcoming Changes

VisionProsperous Sri Lanka through Water and Irrigation Heritage.

MissionProviding well being of community while fulfilling all water needs through Water Resources Management.

The main Functions of the Ministry Formulation of policies and implementation of

Projects and Program.

Fulfilling obligations under “Mahinda Chinthana – Vision for the Future” and overall national policies.

Promotion, construction, operation, maintenance and management of Irrigation systems, Rain water harvesting, and Ground water development.

Salt water exclusion program.

Drainage and Flood protection.

Prevention of the pollution of rivers, streams, reservoirs and other water bodies.

Engineering consultancy services and construction.

Implementation of legislative enactments relevant to the subjects and Institutions under the Ministry.

Matters relating to Mahaweli Development.

Divisions & Branches of the Ministry

Water Resources Engineering Services Planning & Plan

Implementation Mahaweli Systems Lands & Land Development Finance Administration Internal Audit Irrigation Management

Division

Institutions of the Ministry

Irrigation Department Mahweli Authority of

Sri Lanka Water Recourses Board Central Engineering 

Consultancy Bureau

CASH BASED ACCOUNTING SYSTEM

Cash receipts, cash payments & cash balances are mainly considered

Cash base accounting enhance the comprehensiveness & transparent of financial reporting of cash receipts, cash payments & cash balances

It enhance comparability with the entities own financial statements of previous periods & with the financial statements of other entities it is which adopt the cash base of accounting

WEAKNESSES OF CASH BASED ACCOUNTING SYSTEM

Only cash or cash equivalents, received or paid by

the entity within the time period is considered.

Assets valuation is not implemented

Debtors & creditors are not maintained

Asset depreciation is not considered

Profit or loss cannot be ascertained

ACCRUED BASED ACCOUNTING SYSTEM

It is basically about presenting surplus or deficit for the period of time in an government entity.

Entities total amount of revenue and expenditure for the period is reported.

Financial Statements are presented to ensure comparability both with the entity’s Financial Statements of previous periods and with the Financial Statements of other entities.

The objective of Financial Statements are to provide

information about the financial position, financial

performance and cash flows of an entity.

The objective of Financial Statements in the public

sector is to provide information useful for decision

making and mainly to demonstrate the

accountability of the entity.

It is,

Providing information about the sources, allocation, and

uses of financial resources

Providing information about how the entity financed its

activities and met its cash requirements

Providing information that is useful in evaluating the

entity’s ability to finance its activities and to meet its

liabilities and commitments

Providing information about the financial condition of the

entity and changes in it

Providing aggregate information useful in evaluating the entity’s performance in terms of service costs, efficiency, and accomplishments

Indicating whether resources were obtained and used in accordance with the legally adopted budget

Indicating whether resources were obtained and used in accordance with legal and contractual requirements, including financial limits established by appropriate legislative authorities

POSSIBLE PROBLEMS OF ALTERING

Accrued based Accounting System is more complex than Cash based Accounting System

Errors can be occurred when reporting a large volume of transactions

Asset valuation problems

Most government workers are narrow minded and resist to get them updated in to new systems

Lack of knowledge & training

Attitude problems

SUGGESTIONS TO OVERCOME

Awareness step Giving the most basic idea about the new system

Educational step Providing a descriptive knowledge about the new system

Training step Providing a practical knowledge about implementation of the new system within the entity

Forming a separate teams, leaded by experts

Organizing sessions for provide a better understanding about objectives of the circular alters the accounting system

Holding a session knowledge about the implementation of the new system in other countries not only which are in developed but also in developing countries such as Rwanda, Uganda, Algeria, South Africa, Ghana, India,China

Created by;

Shakthi Fernando Chandi Damayanthi Janith Perera

BSc. Financial management(Special)-UndergraduatesSabaragamuwa University of Sri Lanka

THANK YOU