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