Auditor General Gamini Wijesinghe said according to the latest financial declarations, the country’s foreign and domestic loan account stood at Rs. 8.9 trillion by the end of 2016, but the audited domestic assets stood at only Rs.1.1 trillion.
He said that the main reason for this was the failure to utilise loans properly and in the estimated manner for projects.
Addressing the media yesterday, Mr Wijesinghe charged that auditing and maintaining a correct balance sheet at almost all development projects launched with foreign loans, Ministries, Departments and Semi-Government ventures has caused problems to the state auditing system.
“The main reason for this situation in the public finance was the all-powerful chief Auditing Officer of the Treasury during the previous Government overseeing the budget, monetary policy and administration,” he said.
Explaining that trillions of public funds were not found in the books or audit reports, Mr Wijesinghe said there were public funds allocated to Provincial Councils and Semi-Government ventures that were not found in books.
“A bigger portion of loans obtained for major development projects from foreign banks and global financial agencies for higher interest rates of 5% have been diverted for non-productive purposes and recurrent expenditure.
“Though there was a policy decision that foreign loans obtained must not exceed 80% of the GDP, this rule had not been followed and loans have been taken excessively. When the capital raised from loans for the development project is used for other objectives, with no dividends or for people, debt-servicing comes cumbersome and a liability on the Treasury.
“It also makes loan repayment unmanageable, which has exactly happened at the moment,” Mr Wijesinghe pointed out.
Mr Wijesinghe said the nom de guerre ‘Economic Assassin’ used to identify him was quite appropriate, when taken into account the harm he has done to the country’s economy.
“The Uma – Oya multi-purpose development project, D.A Rajapaksa Memorial Centre, unauthorised rice imports, construction of Suriyawewa Cricket Stadium are some of the projects that had been launched using foreign loans but with no dividends,” he said.
“There has been no proper Feasibility Study or Environment Impact Assessment for Uma Oya Project, D.A. Rajapaksa memorial has been constructed by the Land Reclamation and Development Corporation without a plan and funds, Suriyawewa International Cricket Stadium has also been constructed with excessive funds than the estimated investment. These projects are only the tip of the iceberg. There are more failed investment projects launched using foreign commercial loans that have further exacerbated the debt servicing, Mr Wijesinghe emphasised.
“Responding to a journalist, Mr. Wijesinghe said if the proposed ‘National Audit Act’ had been in the statute book in 2015, the bond scandal would not have happened because the new piece of legislation gives more power to the Auditor General’s Department and Ministry Secretaries, who are the chief accounting officers of Ministries.
“The main culprits to the current sad situation in public finance are the Secretaries of the Ministries. Many of them are working for the Minister and without hesitation carry out irregular orders of the Minister. The best example is the Sil Redi case,” he said.
Mr Wijesinghe in a lighter vein said Ministry Secretaries must not get frightened to work at the Treasury (Siberia) as a punishment for refusing to carry out an illegal order of a Minister as they get paid their salary for doing nothing.
“You can read Pansiya Panas Jathakaya as you are not unoccupied. It is better than obeying to do dishonest or illegal job ordered by a Minister,” he said.
Commenting on the long delay in passing the ‘National Audit Bill’ in Parliament, Mr Wijesinghe said the main obstacle to enact the Audit Bill was Ministry Secretaries or Chief Accounting Officers.
“They are frightened that their power and influence would be drastically diminished if the National Audit Bill was enacted. But we are determined to enact this Bill this month as it will bring remedies for many ills in the economy and public finance," Mr Wijesinghe stressed. (Sandun A Jayasekera)