The absence of internal audit committees, waste, corruption and the lack of a proper credit policy are some of the factors contributing to the malaise affecting the country’s public enterprises, according to the Committee on Public Enterprise (COPE) report which was presented in parliament on Wednesday.
The report presented by Minister and COPE Chairman John Seneviratne said the the Committee scrutinised 20 public institutions covering the period July 2008 to December 31, 2008.
The report said the failure on the part of several state enterprises to establish and effectively implement audit committees had resulted in financial mismanagement and poor control of audits. The Ceylon Fisheries Harbours Corporation, the Atomic Energy Authority and the Land Reforms Commission were three such institutions which operated without properly functioning audit committees.
The COPE report said one of the weakest areas of financial management in public enterprises was the lack of credit policy. It said customers who were from both the public and private sectors had been given massive sums of credit, causing serious liquidity problems.
The report said the committee also discussed its jurisdiction over certain public enterprises like SriLankan Airlines and Sri Lanka Telecom because these institutions had made representations to the Committee saying since they were registered as private companies under the Companies Act, they could not be scrutinised by the COPE or the Public Accounts Committee (PAC).
There The COPE report said that where public funds were utilized for the establishment and/or maintenance of any institution or at least a portion of its capital and recurrent expenditure were provided by the government, including those registered under the Companies Act or established under any other special law, they should be brought under the purview of either COPE or PAC.
Here are some of the
highlights of the report:
Development Lotteries Board (DLB)
An advance of Rs 24 million has been paid to buy 26 vehicles from a private firm. Thereafter the same vehicles were used on rent causing a serious loss. The Committee said the subject of advances for motor vehicles will be reported to the Speaker and also the Bribery Commission.
Five trucks had been purchased for Rs. 650,000 each after paying an advance of Rs. 900,000 each with no approval from the Board. The Committee said payment for the trucks had been paid without following properly laid out procedures and serious irregularities had taken place.
Sri Lanka Press Council (SLPC)
After 2002, the Sri Lanka Press Council is inactive. There was a decision to revive it in 2006. There are groups which suspect that the council will suppress the work of the press. This is an unfounded suspicion.
The Committee decided that the Press Council was now essential. The Council should be reconstituted and appointments made.
Water Resources Board
A poor costing system is prevailing and as a result problems have arisen. The Board is unable to plan its operations at the beginning of the year due to the absence of a proper idea of the demand in operations. The Committee said that the loss in 2008 has gone up to Rs 16 million and there is a need to decide whether the WRB should be continued.
Sri Lanka Standards Institution
Bonuses had been paid to employees costing Rs 5.4 million without Treasury approval causing a serious alimony. The Committee said the alimony payment must be resolved with Public Enterprise Department of the Treasury and the institution should avoid getting funds from the Treasury.
National Lotteries Broad
A building which had cost the board Rs 48 million in 2005 is still almost unoccupied. This is a major loss and is used only as a store. The Committee called for a report on the building.
Public Utility Commission
Fines to the value of over Rs 6.8 million have not been properly recorded or collected. The Committee said the management agreed to update records.
Kuwait compensation money remains unpaid
Some Sri Lankan workers affected by the 1990 Kuwait war are yet to be compensated by the Sri Lanka Foreign Employment Bureau (SLFEB) though the insurance money it received had been lying unpaid since 2003, the Parliamentary Committee on Public Enterprise (COPE) said in its report released on Wednesday.
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| Sri Lankan workers returning in a shep from Kuwait in 1990 |
The report said that as per a list of workers prepared in 2003, Rs 17 million had to be paid to them but after a lapse of five years, Rs 13 millions still remained unpaid. “There has been a serious delay in settlement of compensation,” the report said.
The report also noted several other areas of inefficiency and weaknesses. For instance, it said 74.6 million had been collected in excess from workers for air tickets though the excess amount had been refunded.
The report also noted that the lack of follow-up action on the part of the SLFEB with regard to the deaths of Sri Lankan expatriate workers, especially those who committed suicide or died under questionable circumstances. “The reasons for the deaths have to be ascertained .The role of the welfare officers has to be examined,” the report said. |
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