By: Staff Writer
December 26, Colombo (LNW): Sri Lanka’s Tourism Development Fund (TDF) has faced significant mismanagement, leading to inefficiencies and irregularities, as revealed by the Auditor General’s 2023 report.
The fund, which is intended to promote tourism development, is financed by a 1 percent contribution from hotel and tourism businesses and 0.5 percent from small enterprises, along with a 0.33 percent of the Embarkation Levy.
Managed by the Sri Lanka Tourism Development Authority (SLTDA), the funds are distributed to various tourism bodies, including the SLTDA, Sri Lanka Tourism Promotion Bureau (SLTPB), Sri Lanka Institute of Tourism & Hotel Management (SLITHM), and the Sri Lanka Convention Bureau (SLCB) based on allocations outlined in the Tourism Act No. 38 of 2005.
However, stakeholders, including hoteliers, tour operators, and other tourism-related businesses, have raised concerns over the lack of transparency in the fund’s allocation and use.
There is little clear communication about how the funds are being spent, leading to dissatisfaction among industry professionals. Many express frustration with the absence of detailed reporting on the effectiveness and outcomes of the TDF.
The 2023 Audit Report highlighted several issues with the fund’s management. These include delays in the utilisation of allocated funds, irregular disbursements, and a lack of systematic monitoring and evaluation.
In many cases, funds were allocated without proper documentation or approval, which raised questions about the accountability of the distribution process.
Additionally, there were significant lapses in adhering to financial regulations, including incomplete records, improper allocation of expenses, and failure to comply with procurement procedures.
A major concern was the inefficient use of funds, with large portions remaining unspent for long periods.
This inefficiency has hindered the effective implementation of tourism development programs. In some cases, tourism infrastructure projects suffered from cost overruns, delays, or incomplete work, leading to underutilization of resources.
The report also pointed out that some TDF projects were funded without following necessary procedural guidelines, and there were instances where advances to contractors and service providers were not recovered in a timely manner.
Moreover, the audit revealed a lack of strategic planning in the allocation of funds, which led to reactive rather than proactive initiatives.
Without a comprehensive long-term strategy, tourism development efforts have been fragmented, resulting in suboptimal outcomes for the sector.
Inadequate coordination between government bodies, private-sector stakeholders, and local communities has further contributed to inefficiencies in project implementation.
Finally, weaknesses in internal control systems and oversight were noted. The absence of robust internal audits and safeguards against misuse or misallocation of funds makes the TDF vulnerable to mismanagement.
Strengthening financial oversight, improving the disbursement and monitoring processes, and ensuring greater transparency are critical to restoring confidence in the fund and supporting sustainable tourism development in Sri Lanka, audit report observed.
