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University Grants Commission - Sri Lanka

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Finance Circular Letter No. 2/2009

5th February, 2009

Vice-Chancellors  of Universities,
Directors of Institutes,
Rectors of Campuses.




Your attention is invited to UGC Finance Circular Letter No. 14/2008 of 19th December, 2008, by which the allocation of the Government grant for the year 2009, was conveyed to all Higher Educational Institutions.

The Ministry of Finance and Planning, by their National Budget Circular No. 142 dated 31.12.2008, has notified all public funded Institutions to effect  a saving of an amount equal to 10% from the budgeted expenditure on fuel, water & electricity, in order to achieve a national level saving of 2% on recurrent expenditure, and an under-expenditure of 15% from the capital expenditure provisions included in the Budget for 2009.

Freezing of Recurrent Expenditure

The Government proposes to achieve an overall saving of 2% at national level, from the Budgeted Recurrent Expenditure for 2009.  In order to reach this target all Institutions have been requested to effect a saving equivalent to 10% of the budgeted expenditure on fuel, water and electricity.  According to data collected from the Recurrent Budgets of all HEIs, 10% of fuel, water & electricity charges, budgeted   for  2009  and  funded  through  the  Government  grants   amount   to Rs. 84,333,300/-. This amount will be fully absorbed by the Commission.  Therefore HEIs. need not revise their Recurrent Expenditure budgets for 2009.

Freezing of Capital Expenditure

The proposed freezing of 15% from the Capital Expenditure Budget, will be effected only from capital expenditure financed from domestic  funds.  However, special provisions included in the Budget proposals for 2009, will not be frozen.  Accordingly, the special provisions of Rs. 950 million for development of new projects and Rs. 100 million for the golden jubilee celebrations of Kelaniya and Sri Jayawardenapura Universities, will be exempt.  (Pl. refer para 3(b) of Finance Circular Letter No. 14/2008.  The total domestic funds provided for capital expenditure in 2009 which will be subject to the 15% saving amount to Rs. 4,100 million.  Accordingly, the targeted under-expenditure of 15% amounts to Rs. 615 million.  All Higher Educational Institutions are expected to absorb the under expenditure of 15% on the funds allocated for capital expenditure.  Each Institution may identify the expenditure areas from which the under-expenditure is to be effected, but the total saving should be equal to 15% of the total capital grant allocated for the three projects, Rehabilitation & Improvement of Assets, Acquisition of Fixed Assets, and Construction projects.

All HEIs are requested to inform the UGC, the proposed revisions of the capital expenditure budgets, on or before the 11th February, 2009.

Additional  Allocations

It is to be noted that additional allocations or transfers will not be allowed for expenditure items frozen from the budget.

Distress Loan Limit

The maximum amount of the Distress Loan has been limited to Rs. 250,000/- with effect from 1.1.2009.  All HEIs are kindly advised to give priority to employees who apply for Distress Loans for the first time.

Action Plans for 2009 and Progress Reports

Action plans and progress reports according to the format given in Annexure 2 of the Budget Circular No. 142 should be submitted to the Department of National Budget, with a copy to the Ministry of Plan Implementation.  (Pl. see paragraph 8 of  the Budget Circular).


Prof. S. V. D. G. Samaranayake


  1. Chairman/UGC
  2. Vice-Chairman/UGC
  3. Secretary/UGC
  4. Financial Controller
  5. Director/IDD/UGC
  6. Registrars of Universities
  7. Bursars of Universities
  8. SAR/AR/ of Institutes/Campuses
  9. SAB/AB/ of Institutes/Campuses
  10. Accountant/UGC
  11. Chief Internal Auditor/UGC
  12. Snr. Asst. Accountant/UGC
  13. Snr. Asst. Secretary/Supplies & Administration/UGC
  14. Auditor General
  15. Govt. Audit Superintendent/UGC
  16. Govt. Audit Superintendent/Universities

Download : National Budget Circular No. 142 - Sinhala
National Budget Circular No. 142 - Tamil
National Budget Circular No. 142 - English