Act of Parliament · As enacted
National Audit (Amendment) Act 2025
Official English translation. Where it differs from the Sinhala or Tamil text, the Act itself says which text prevails.
Official translationFrom Department of Government Printing, unchanged
s 1Short title
This Act may be cited as the National Audit
(Amendment) Act, No. 19 of 2025.
s 2Amendment of section 7 of Act, No. 19 of 2018
Section 7 of the National Audit Act, No.19 of 2018
(hereinafter referred to as the “principal enactment”) is hereby amended by the addition immediately after subsection (5) thereof, of the following new subsections: -
“(6) Save as provided in subsections (7) and (8), where the Auditor-General or any person authorized by him when carrying out an audit in respect of any auditee entity, has reasonable grounds to believe that any fraud, corruption or misappropriation in any transaction has been committed contrary to any written law, the Auditor-General shall notify the Chief Accounting Officer of such auditee entity to immediately make a complaint to a law enforcement authority for legal action.
Where the allegation on fraud, corruption or misappropriation is against the Chief Accounting
Officer, the Auditor-General shall notify the
Secretary to the Cabinet of Ministers to immediately make a complaint to a law enforcement authority for legal action.
It shall be the duty of the Chief Accounting
Officer of the auditee entity or the Secretary to the Cabinet of Ministers, as the case may be, to immediately make a complaint to the law enforcement authority upon receipt of such notification from the Auditor-General and to report on the progress of inquiring into the complaints made under subsection (6) or (7), to the Auditor-General, from time to time.”.
s 3Amendment of section 9 of the principal enactment
Section 9 of the principal enactment is hereby amended by the repeal of paragraph (a) of subsection (1) thereof and the substitution therefor, of the following paragraph:-
“(a) not be compelled by any person to disclose any information except on a request of Parliament, the Surcharge Review Committee in taking into consideration the recommendation made by the Auditor-General under subsection (1) of section 19 or by an order of court or subject to paragraph (b) to give effect to the provisions of any written law;”.
s 4Amendment of section 11 of the principal enactment
Section 11 of the principal enactment is hereby amended in subsection (2) thereof, by the substitution for the words “to the governing body of each auditee entity within the five months” of the words “to the Chief Accounting
Officer, the Accounting Officer or the governing body of each auditee entity, as the case may be, within six months”.
s 5Amendment of section 18 of the principal enactment
Section 18 of the principal enactment is hereby amended in subsection (3) thereof, by the substitution for the words “after having deducted the costs incurred in carrying out the audit.” of the words and figures “after having deducted the costs incurred in carrying out the audit and a sum of fifteen per centum of such fee which sum shall be credited to the Audit Fund established under section 37.”.
s 6Amendment of section 19 of the principal enactment
Section 19 of the principal enactment is hereby amended as follows:-
by the repeal of paragraph (a) of subsection (1)
thereof, and the substitution therefor, of the following paragraph:-
“(a) Unless otherwise specifically provided for in any other written law, the Auditor-General shall make his recommendation to impose a surcharge on the amount of any deficiency or loss in any transaction of an auditee entity where the
Auditor-General has reasonable grounds to believe that such transaction has been made contrary to any written law and has caused any deficiency or loss due to fraud, advertent negligence, corruption or misappropriation of those involved in that transaction of the auditee entity to the Surcharge Review Committee appointed under section 21.”;
by the repeal of subsection (2) thereof;
in subsection (3) thereof,-
by the substitution for the words “The Chief
Accounting Officer of the auditee entity shall, in charging the amount to be recovered, adopt the following procedure:-” of the words “The
Surcharge Review Committee shall adopt the following procedure in making its decision on the recommendation made by the Auditor-General:-”;
in paragraph (a) thereof, by the substitution for the words and figures commencing from
“subsections (1) and (2),” to the end of that paragraph, of the words and figure “subsection (1), within a period of twenty one days from the date of receipt of the Notice.”;
by the insertion immediately after paragraph (a) thereof, of the following new paragraph:-
“(aa) where necessary, call for further clarification or documents from the
Auditor-General with regard to his recommendation prior to making the decision;”;
in paragraph (c) thereof, by the substitution for the words “the Chief Accounting Officer of the auditee entity” of the words “the Surcharge
Review Committee”;
in paragraph (e) thereof, by the substitution for the words “the decision of the Chief
Accounting Officer of the auditee entity under paragraphs (b) and (c) shall be communicated forthwith to each person who is responsible for the deficiency or loss by issuing a Surcharge
Certificate,” of the words “the decision of the Surcharge Review Committee under paragraphs (b) and (c) shall be communicated forthwith to each person who is responsible for the deficiency or loss by issuing a Surcharge
Certificate through the Chief Accounting
Officer of such auditee entity,”;
by the insertion immediately after subsection (3)
thereof, of the following new subsections:-
“(3A)
Where the
Surcharge
Review
Committee decides to impose a surcharge on a
Chief Accounting Officer, the communication of its decision under subsection (3) shall be made through the Secretary to the Cabinet of Ministers issuing the Surcharge Certificate specifying the information specified therein.
Where any person is dissatisfied by the decision of the Surcharge Review Committee, he may appeal to the Court of Appeal within thirty working days from the date of issue of the communication under paragraph (e) of subsection (3) or subsection (3A) of this section.
The Order of the Court of Appeal shall be communicated by the Secretary to the Cabinet of
Ministers or the Chief Accounting Officer of the auditee entity, as the case may be, in writing to the
Surcharge Review Committee and the Auditor-General.”;
in subsection (4) thereof, by the substitution for the words “The Chief Accounting Officer of the auditee entity” of the words “The Secretary to the Cabinet of Ministers or the Chief Accounting Officer of such auditee entity, as the case may be,”;
by the addition immediately after subsection (4)
thereof, of the following new subsections:-
“(5) The
Surcharge
Review
Committee appointed under section 21 shall bi-annually publish in the website of the National Audit Office established under section 29, a report that includes the following information:-
the number of recommendations received from the Auditor-General under paragraph (a) of subsection (1) to impose a surcharge;
the number of recommendations reviewed by the Surcharge Review Committee, including a breakdown of the number of surcharges imposed, recommendations varied and decisions pending;
a statement of the surcharge imposed and actual surcharge collected for that reporting period, which the Surcharge
Review Committee shall obtain from the relevant Chief Accounting Officer or the
Secretary to the Cabinet of Ministers, as the case may be, which shall include the following:-
the auditee entities that have failed to collect such payment within the stipulated period, including details of any applicable interest as per paragraph (d) of subsection (3); and
the number of recovery actions that have been initiated by the Surcharge
Review Committee as per subsection (1) of section 23.
Where the Secretary to the Cabinet of
Ministers or the Chief Accounting Officer of such auditee entity fails to recover the amount to be charged specified in the Surcharge Certificate within the time specified in subsection (4), the
Surcharge Review Committee shall report in respect of such failure to the Committee on Public
Accounts or the Committee on Public Enterprises, as the case may be.”; and
by the repeal of the marginal note to that section, and the substitution therefor of the following marginal note:-
“Imposition of a surcharge”.
s 7Repeal of section 20 of the principal enactment
Section 20 of the principal enactment is hereby repealed.
s 8Replacement of section 21 of the principal enactment
Section 21 of the principal enactment is hereby repealed and the following section is substituted therefor:-
21. (1) There shall be a Surcharge Review
Committee consisting of the following five members, who shall be appointed by the
President subject to the approval of the
Constitutional Council, to make a decision on every recommendation on imposing a surcharge of the Auditor-General made under section 19:-
a retired Judge of the Supreme Court or the Court of Appeal who shall be the Chairman of the Surcharge Review
Committee (hereinafter referred to as the
“Chairman”);
three members from among the persons having proficiency in any one or more of the fields of auditing, law, public finance management, public administration and engineering; and
a member nominated by the Institute of
Chartered Accountants of Sri Lanka.
Members of the National Audit Office and the Sri Lanka State Audit Service shall not be eligible to be appointed as the members of the Surcharge Review Committee. The
“Appointment of the
Surcharge
Review
Committee
Auditor-General shall not be a member of the
Surcharge Review Committee. The Surcharge
Review Committee shall act independently of the Auditor-General.
A person who has reached the age of seventy years at the date of the appointment shall not be eligible to be appointed as a member of the Surcharge Review Committee.
Subject to the provisions of subsections (1), (2) and (3), the President shall, within three months of the date of the commencement of this Act or of the date on which a vacancy occurs in the Surcharge Review Committee, make his recommendation on the members to be appointed under paragraphs (a), (b) and (c) of subsection (1) to the Constitutional Council.
The Constitutional Council shall, within fourteen days of receiving the recommendation of the President, approve or disapprove the recommendation.
The President shall, within fourteen days of receiving the approval of the Constitutional
Council, appoint the members of the Surcharge
Review Committee.
A member of the Surcharge Review
Committee shall submit to the Constitutional
Council a general disclosure of his interests as the date of such appointment before assuming office as such member.
A member of the Surcharge Review
Committee who is directly or indirectly interested in any matter that is to be taken up before the Surcharge Review Committee shall disclose the nature of such interest to the
Surcharge Review Committee and shall not take part in any deliberation or decision of the
Surcharge Review Committee with regard to that matter.”.
s 9Insertion of new sections 21A, 21B, 21C, 21D, 21E and 21F in the principal enactment
The following new sections are hereby inserted immediately after section 21 of the principal enactment and shall have effect as sections 21A, 21B, 21C, 21D, 21E and 21F of that enactment:-
21A. A person shall be disqualified from being appointed as a member or continuing as a member of the Surcharge Review Committee, if -
he is or becomes, a member of Parliament, a member of any Provincial Council or a member of a Local Authority;
he is not, or ceases to be, a citizen of
Sri Lanka;
he is under any law in force in Sri Lanka or in any other country, found or declared to be of unsound mind;
he is an undischarged insolvent or bankrupt; having been declared insolvent or bankrupt under any law in Sri Lanka or in any other country;
“Disqualifi-cations from being a member of the
Surcharge
Review
Committee
he is serving or has served a sentence of imprisonment imposed by any court in
Sri Lanka or in any other country; or
he has any financial or other interests as is likely to affect the discharge by him of his functions as a member of the
Surcharge Review Committee.
21B.
Term of office of members of the Surcharge Review Committee
Every member of the Surcharge Review
Committee shall, unless he vacates office earlier by resignation, death or removal, hold office for a period of three years from the date of his appointment and unless he is removed from office, be eligible for reappointment for not more than one further term, whether consecutive or otherwise:
Provided however, that, if at the expiration of the period of office of the Chairman and the members of the Surcharge Review Committee, the new members of the Surcharge Review
Committee have not been appointed under the provisions of section 21, the Chairman and members of the Surcharge Review Committee holding office on the day immediately prior to such expiration, shall continue in office until the new members are appointed.
21C.
Vacation of office of members of the Surcharge Review Committee
Any member of the Surcharge
Review Committee may, at any time, resign from his office by a letter to that effect, addressed to the President, and such resignation shall be effective from the date on which it is accepted by the President in writing.
Where a member of the Surcharge Review
Committee by reason of illness, infirmity or absence from Sri Lanka is temporarily unable to discharge the functions of his office, the
President may, having regard to the provisions of section 21, appoint any other person to act in his place.
Where a member of the Surcharge Review
Committee dies, resigns or is removed from office, the President may, having regard to the provisions of section 21, appoint another person to act in his place and the person so appointed shall hold office for the unexpired period of the term of office of the member whom he succeeds.
The President may, for reasons assigned in writing and with the prior approval of the
Constitutional Council, remove a member of the Surcharge Review Committee from office.
A member who has been removed from office shall not be eligible for reappointment as a member of the Surcharge Review Committee or to serve the Surcharge Review Committee in any other capacity.
21D.
Meetings and quorum of the Surcharge Review Committee
The Chairman shall preside at every meeting of the Surcharge Review Committee.
Where the Chairman is absent, the members present shall elect a Chairman for that meeting from among themselves.
(a) All matters for a decision at any meeting of the Surcharge Review Committee shall be decided by the vote of the majority of members present at such meeting.
In the event of an equality of votes on any matter considered at a meeting, the
Chairman of that meeting shall have a casting vote in addition to his original vote.
No act, decision or proceeding of the
Surcharge Review Committee shall be deemed to be invalidated by reason only of the existence of any vacancy of the Surcharge Review
Committee or any defect in the appointment of any member thereof.
The quorum for any meeting of the
Surcharge Review Committee shall be three.
Subject to the preceding provisions of this section, the Surcharge Review Committee may regulate the procedure with regard to the meetings of the Surcharge Review Committee and the transaction of business at such meeting.
21E.
Remuneration of the members of the Surcharge Review Committee
The members of the Surcharge Review
Committee shall be paid remuneration in such manner and at such rates as may be determined by Parliament.
21F.
The Surcharge Review Committee to invite experts to meetings
The Surcharge Review Committee may, whenever it considers necessary, invite experts to any meeting of the Surcharge Review
Committee, who have expertise on any subject which is dealt with by the Surcharge Review
Committee at such meeting for the purpose of obtaining their views on such subject matter for the effective discharge of the functions of the
Surcharge Review Committee:
Provided however, the Surcharge Review
Committee shall have the absolute discretion of accepting or rejecting the views of such experts.
The experts shall have no voting rights.”.
s 10Amendment of section 22 of the principal enactment
Section 22 of the principal enactment is hereby amended by the substitution for the words “The Chief
Accounting Officer of the auditee entity” of the words “The
Secretary to the Cabinet of Ministers or the Chief Accounting
Officer of the auditee entity, as the case may be,”.
s 11Amendment of section 23 of the principal enactment
Section 23 of the principal enactment is hereby amended as follows:-
in subsection (1) thereof, by the substitution for the words and figures “where the Audit Service
Commission is satisfied that immediate action is necessary for the recovery of such sum, unless an appeal is pending before the Committee under section 20(1), in the Court of Appeal under section 20(4), the Audit Service Commission may issue a certificate” of the words and figures “where the
Surcharge Review Committee is satisfied that immediate action is necessary for the recovery of such sum, unless an appeal is pending in the
Court of Appeal under subsection (3B) of section 19, the Surcharge Review Committee may issue a certificate”;
in subsection (3) thereof -
in paragraph (a) thereof, by the substitution for the words
“the
Audit
Service
Commission” of the words “the Surcharge
Review Committee”;
in paragraph (b) thereof, by the substitution for the words and figures “unless an appeal has been made to the Surcharge Appeal
Committee under section 20 (1) or to the
Court of Appeal under section 20 (4), as the case may be.” of the words and figures
“unless an appeal has been made to the
Court of Appeal under subsection (3B) of section 19.”;
in subsection (9) thereof, by the substitution for the words “the Audit Service Commission” of the words “the Surcharge Review Committee”; and
by the repeal of subsection (10) thereof.
s 12Amendment of section 38 of the principal enactment
Section 38 of the principal enactment is hereby amended by the repeal of paragraph (h) of subsection (1)
thereof and the substitution therefor, of the following paragraph: -
“(h) upon receipt of a notice by the Auditor-General of any fraud, corruption or misappropriation under subsection (6) or (7) of section 7, without delay, make a complaint to a law enforcement authority for legal action.”.
s 13Amendment of section 42 of the principal enactment
Section 42 of the principal enactment is hereby amended by the substitution for the words “to a fine not less than five thousand rupees and not more than twenty five thousand rupees.” of the words “to a fine not exceeding one hundred thousand rupees or to an imprisonment of either description for a term not exceeding one year or to both such fine and imprisonment.”.
s 14Amendment of section 43 of the principal enactment
Section 43 of the principal enactment is hereby amended in subsection (1) thereof, by the substitution for the words “to a fine not less than five thousand rupees and not more than twenty five thousand rupees.” of the words “to a fine not exceeding one hundred thousand rupees or to an imprisonment for a term not exceeding three year or to both such fine and imprisonment.”.
s 15Amendment of section 55 of the principal enactment
Section 55 of the principal enactment is hereby amended as follows:-
by the insertion immediately before the definition
“any person authorized by the Auditor-General” of the following new definition:-
““advertent negligence” means, an act or conduct where there is an awareness of the unreasonable risk involved but the person engaging in the act or conduct still fails to take reasonable care to avoid it;”;
by the insertion immediately after the definition
“Auditor-General” of the following new definition: -
““Committee on
Public
Accounts”
and
“Committee on Public Enterprises” means the Committee on Public Accounts and the Committee on Public Enterprises appointed by Parliament in terms of
Standing Orders of the Parliament of the Democratic Socialist Republic of
Sri Lanka; ”; and
by the insertion immediately after the definition
“information” of the following new definition: -
““Institute of
Chartered
Accountants of
Sri Lanka” means the Institute of
Chartered Accountants of Sri Lanka established under the Institute of Chartered
Accountants Act, No. 23 of 1959;”.
s 16Sinhala text to prevail in case of inconsistency
In the event of any inconsistency between the Sinhala and Tamil texts of this Act, the Sinhala text shall prevail.