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SLAF’s Helitours not on Auditor General’s radar for ten years
Shares of Helitours (Pvt) Ltd, the Sri Lanka Air Force’s (SLAF) commercial passenger service, will be transferred to the Treasury after the Auditor General queried how the company was registered as a private entity but sustained by tax money with public officials on its board of directors.
“The Air Force and Treasury are in discussions since a decision has been made and are working out the modalities,” said Group Captain Gihan Seneviratne, SLAF Spokesman. “They are close to finalising matters.”
Helitours was resurrected by the previous regime to ferry civilians to and from various airports in the country. The Constitution decrees that auditing of all Government-owned companies rests with the Auditor General’s (AG) Department.
However, as the status of Helitours was unclear, the AG requested a letter from the SLAF confirming that it was a Government-owned entity since it was financed by the Treasury and its total revenue is credited to State coffers.
The Committee on Public Accounts (COPA) also questioned the SLAF about the legality of public officials functioning on the board of an entity registered under the Companies Act. It gave instructions to regularise Helitours as a state-owned enterprise. It is not clear how the operation continued for ten years without auditing by the AG.
After the problem was raised, the SLAF Chief Internal Auditor (civil) advised that a certain percentage of shares should be transferred to the Treasury in order for the AG to certify the accounts of Helitours, reveal documents presented to Parliament this week as a part of responses to matters raised in the recent COPA report regarding the SLAF.
The documents show that Air Marshal K.V.B. Jayampathy, former SLAF Commander, also sought input from the Finance Ministry’s Public Enterprises Department (PED) about “the best course of action towards confirming the status of Helitours (Pvt) Ltd as a Government-owned company”.
The PED advised the SLAF Commander to “make arrangements to transfer the shares to the Secretary to the Treasury immediately after obtaining approval of the Cabinet of Ministers”. It said the AG may have issues recognising state-owned enterprises which are not stated in the national accounts (such as Helitours) and this “may lead to problems of transparency and accountability of utilising public money as public investments”, the PED’s Director General wrote.
The Commander subsequently wrote to the PED saying the transfer of 51 percent of Helitours shares to the Treasury is being considered with the balance 49 percent to be retained by the SLAF.
In January this year, the PED and Helitours jointly decided to review the financial status of the company to identify a business plan for the company. PED officials visited Helitours in March for this purpose.
In May, at a meeting between PED and Helitours officials, it was decided that full ownership of company shares will be transferred to the Secretary to the Treasury; the operational functions and management of Helitours will be with a board of directors comprising SLAF officers; and a representative of the Treasury will also be on the board.
There is to be an agreement between SLAF and Helitours to get aircraft on lease. All maintenance expenses and all movable and immovable assets, including human resources, will be accounted. And a percentage of the company will go to the public account and for the SLAF’s welfare activities.