⚠️ Auditor General Flags Sri Lanka Treasury Debt Reporting Discrepancies

An audit review of Sri Lanka’s 2025 Financial Statements has revealed significant inconsistencies between the Government's accounts and the Debt Management System, highlighting weaknesses in public debt management and governance. • Key Discrepancies & Gaps A net difference of Rs. 2.67 Bn was observed between the Debt Management System's opening balances (Jan 1, 2025) and the 2024 year-end audited Financial Statements. Financial statements overstated loan disbursements by Rs. 2.01 Bn across four loan agreements. An IMF loan under the EFF/RFI arrangements (SDR 150.5 Mn / Rs. 63.9 Bn) was disclosed in Financial Statements but completely missing from the Debt Management System. An International Sovereign Bond (ISB) showed an unexplained Rs. 3.27 Bn ($ 11 Mn) difference in opening balances and a Rs. 3.46 Bn variance in debt service payments between the two tracking systems. • Unaccounted Assets & Risk A massive Rs. 518.29 Bn in loan balances from 2022 continues to be maintained outside the Statement of Financial Position, with no corresponding assets identified, worsening the General Fund's negative balance. The Auditor General warned of a "high potential" that foreign loan disbursements received during 2025 remained unrecorded in both systems. • Systemic Issues The audit identified mismatching lender names (e.g., misidentifying AIIB loans as AFD), calculation errors in foreign exchange losses, and a Rs. 1.07 Bn unresolved difference from 2024. _Note: Findings are based on the Auditor General's review of provisional 2025 government financial records._