By: Staff Writer
August 10, Colombo (LNW): Sri Lanka is preparing to replace a payroll system that has been handling government salaries since 1996. The move comes at a time when more than one million people depend on the State payroll and the Government is spending an estimated Rs.1.323 trillion a year on their salaries and wages.
The scale of the operation is enormous.
Official figures show that 1,076,625 people were employed in the public sector as at June 30 last year. The approved cadre was 1,325,123, leaving 248,498 vacant positions. The figures cover ministries, departments, provincial institutions, special spending units and state-owned enterprises, but exclude the uniformed personnel of the Army, Navy and Air Force.
The figures raise an obvious question: how effectively can the Government keep track of such a large workforce using a payroll system designed three decades ago?
The Finance Ministry itself has acknowledged that the existing Government Payroll System has serious limitations. Its architecture is outdated, it is difficult to improve and its security arrangements are no longer considered adequate.
More importantly, the Government says weaknesses in the system could expose the payroll to manipulation and fraud.
That is significant because a payroll containing more than one million names is one of the largest financial records maintained by the State. Even relatively small errors, duplicate payments or payments to people who should no longer be on the payroll could add up to substantial losses.
The new system is therefore expected to give the Treasury a much clearer picture of the public service.
Among the measures proposed is the use of artificial intelligence to identify unusual records and possible “ghost” employees. Every transaction is also expected to leave a secure record showing what was changed and by whom.
The Government is seeking something else that the present system apparently cannot provide easily: the ability to connect information about employees with the salaries they receive.
That could change the way the Treasury manages the public workforce.
At present, the existence of nearly 250,000 vacancies alongside more than one million employees presents a complicated picture. A vacancy does not automatically mean that money is being saved. Some institutions have serious shortages while others may have positions that have remained vacant for years.
The real issue is therefore not simply the number of government employees. It is whether the Government knows precisely where its employees are, what work they perform and whether staffing levels match the services required.
The new payroll system could make that information available in a much more useful form.
The financial stakes are high. The 2026 Budget has allocated Rs.1.323 trillion for salaries and wages, compared with an estimated Rs.1.220 trillion last year.
That is an increase of roughly Rs.103 billion in one year.The replacement of the payroll system will cost money, but the more important question is whether it will help prevent much larger losses.
For a country attempting to restore discipline to public finances, the value of the new system will ultimately be measured by one simple result: whether the Government can account for every person on its payroll and every rupee paid to them.
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