BackgroundThe Sri Lankan public health care system provides free health care. Psychiatric services in the public sector have expanded over the years to reach the whole country. Currently, the cost of care per patient in a government hospital is not calculated directly. AimsTo assess the total in-ward expenditure, expenditures incurred in different cost heads, average per patient cost and cost per patient day in a psychiatry unit at Teaching Hospital, Anuradhapura, Sri Lanka. MethodsA financial audit was carried out at Teaching Hospital, Anuradhapura. All patients admitted for in-patient psychiatry care from 1st to 30th of September 2019 were included. Data were collected retrospectively from patient documentations and hospital accounting using a data extraction form. ResultsNinety patients, 48 (53.3%) females and 42 (46.7%) males, were included in the study, with 711 in-patient days. The average length of stay was 7.9 days. The mean age was 39.8 years, ranging from 16 to 75 years, and most were married (55.6%). Schizophrenia and depressive disorder were the commonest diagnoses. The total cost per month in the psychiatry unit was LKR 3 321 050.60, with an average of LKR 110 701.70 per day. The average cost per patient per day was LKR 4 670.96. Staff wages accounted for 56.27% of the total expenses, and medications and other consumables accounted for 13.01%. ConclusionsClinicians can carry out cost analysis with data available to them. The results can be used to efficiently allocate resources from the total budget in the given institution, and to implement cost reduction plans to use limited resources effectively.