Gatekeepers of Sri Lanka
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The whole neighbourhood was in uproar: A thief/thieves had entered a property down the lane in the dark, climbed the trees and stolen several coconuts. How the residents of the household did not wake up to the sounds of falling coconuts was a mystery. Our fabulous trio – more out of curiosity than empathy and to gossip afterwards – had gone to the affected household where several neighbours had gathered.“Harima pudumai horu geta panela monawath horakan-karupu nethi eka (It’s strange that they didn’t enter the house to rob valuables,” said Serapina, after the trio returned to our household. “Den pol hari ganan nisa (gediyak rupiyal deseeyayi nae), horu paninawa pol kadaganna. Eh samaharawita egollangey daruwanta kanda denna wenna athi (It seems that coconuts due its current cost – Rs. 200 per nut – is an item that attracts robbers, maybe to feed their children,” noted Mabel Rasthiyadu. “Minissu pol horakang karanawa nam eka aanduwata hadisi panividayak mokak hari visadumak genna kiyala ihala yana pol milata (If people are stealing coconuts, this is an urgent message to the authorities to find a solution to the problem of rising coconut prices),” added Kussi Amma Sera.
As they continued their conversation under the margosa tree this Thursday morning, I walked into the kitchen for my morning tea just before the phone rang in the house. It was Ruwanputha, my young economist friend, calling this morning with an interesting topic to discuss: Reports by the Auditor General from the National Audit Office and who is responsible for implementing his recommendations.
That was the question; what happens to these reports and their recommendations? Does Parliament act on these recommendations; is there no follow-up; and who or which institution is responsible to act on these recommendations?
“Almost every week, newspapers carry reports of the National Audit Office raising concerns of either malpractices and large-scale fraud in government institutions and state-related bodies but what happens to these reports thereafter is anybody’s guess,” said Ruwanputha.
“You’re right, the media religiously carry these reports but no questions are asked as to what happens next. Occasionally, the Parliamentary Committee on Public Accounts and the Parliamentary Committee on Public Enterprises will summon officials while examining these reports, question them and raise questions from the report, seeking responses from the officials. The said officials are then ordered to act on these reports. But there are many reports that may escape the attention of these committees as there are too many to consider,” I said.
“Maybe another mechanism should be put in place to examine these reports and ensure errant officials are held responsible,” he said.
“Another feasible option is to amend the laws governing the role of the Auditor General inserting provisions on mandatory follow-up action,” I said.
We concluded our brief conversation, with Ruwanputha explaining about an interesting Advocata seminar on reforms he had taken part virtually on Wednesday.
According to the role and responsibilities enshrined in the Constitution, the Auditor General through the Auditor General’s Department provides an independent review of the performance and accountability of the public sector institutions and reports to Parliament. “The Auditor General’s Department aims to meet the needs and expectations of Parliament, the executive and its clients and to add value to public sector performance and accountability,” states the rules.
According to the Auditor General’s report for 2023, the Office made 13,441 audit observations in analysing 50 institutions and sectors. Here are some excerpts from the report:
“Different figures had been reported between the Budget Deficit mentioned in the Government financial statements and the Budget Deficit mentioned in the Annual Report of the Central Bank of Sri Lanka. According to the Annual report of the Central Bank, the Budget Deficit was Rs. 2,282,267 million. Nevertheless, that deficit was Rs. 2,583,601 million according to the Government financial statements. Accordingly, there was a difference of Rs. 301,334 million.
“Although the total value of the disbursed estimates provided by development partners in 2023 was US$2,743 million, the actual disbursed value was $2,568.7 million, a decrease of $174.3 million or 6 per cent, of the disbursed estimate.
“While net borrowings (local and foreign) had increased by Rs. 208,368 million, interest payments for loans had also increased by Rs. 890,410 million equal to 56.89 per cent in the year under review as compared to the previous year. As in the previous years, the income collected was not enough to pay the loan installments and interest in the year under review.
“Even though a net profit of Rs. 117,719 million has been earned in 2022, in relation to 32 Statutory Boards invested by the government, it was observed that a net loss of Rs. 820,799 million has been made in relation to 98 institutions. According to the Annual Report of the Central Bank of Sri Lanka, the average annual population in the year 2022 was 22.18 million and accordingly the net loss per capita incurred in 2022 for 98 state-owned enterprises is about Rs. 37,000.”
Here are two other examples, from among many, of audit reports published in The Sunday Times Business. One report said a special audit uncovered significant mismanagement in the government’s scheme for importing fully electric vehicles for expatriate workers, leading to substantial financial losses exceeding Rs. 1,380 million. The National Audit Office had recommended revoking all permits issued under the scheme and notifying the relevant stakeholders. It also called for disciplinary action against officials who issued permits in violation of stated policy (did this happen?).
In another report published in The Sunday Times Business, it was stated that although the Sri Lanka Tourism Development Authority had signed several agreements to develop the Kalpitiya islands near Puttalam, there had been no tangible progress and, in addition, the Authority had failed to collect Rs. 93 million as lease payments from these lessees during the period 2018 to 2024, according to an audit report (were the guilty officials penalised?).
At the end of the day, the public needs to know the action taken based on audit reports. Either Parliament or the National Audit Office needs to be held accountable as to action taken against errant officials which has cost the exchequer losses or financial fraud running into billions of rupees.
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