Why did a group of powerful Ministers including a few Secretaries to the Ministries are mounting pressure on the President and the Prime Minister to dilute the National Audit Bill? Are they also dilly-dallying with the enabling legislation Bill? It had been sent through all appropriate channels; namely the Auditor General, Legal Draftsman and the Attorney-General since 2003. The previous regime endorsed the Bill in its entirety but prevented it becoming law.
Sub-Committee consisting of Ministers Sarath Amunugama (Chairman), Rauff Hakeem, Anura Priyadarshana Yapa and Ravi Karunanayake as Members have been appointed to consider whether this Bill could violate rules of natural justice. The Constitution (Article 42 (2)) specifies that the Cabinet of Ministers are “collectively responsible and answerable to the Parliament”. The Cabinet of Ministers are“charged with the direction and control of the government”. Aren’t they therefore duty-bound (if they genuinely support good governance) to honour the principle “public sector auditing is key to good public governance”? Article 148 has mandated Parliament to demand transparency and accountability.
Nevertheless, did the Cabinet Sub Committee disregard the Attorney-General’s opinion? Shouldn’t they opportunely grant the necessary powers and enact enabling law to achieve good governance objectives? The AG performs a duty as the Trustee of the whole nation. AG therefore is a peoples’ officer. Financial Act No. 38 of 1971 too requires that AG should carry out statutory audits. If so, why did successive governments create road-blocks otherwise?
The Auditor-General has budget cuts imposed by the General Treasury. A good number of vacancies had not been filled in for years. AG had to face endless difficulties in obtaining necessary funds to carry out their legitimate functions. Due to this reason, AG is unable to attract, train and retain qualified staff. The outcome is that audit contribution is not timely, lacks materiality and is not on par with international best practices. An assessment carried out by the World Bank has shown that there are delays across the entire audit process which have been owing to factors beyond AG’s control. Similarly, due to manipulations, the executive arm had kept AG out when it comes to ‘defence expenses’ and other critical investigations citing national security interests etc. as reasons. However, numerous irregularities such as ‘MIG-jet deal’ etc. had been unearthed by the AG amidst numerous complications. There had been instances the AG had to be contended with only a certification by the President and the Minister of Finance particularly in regard to defence expenditure. The IMF in 2003 had pointed out the need to implement necessary reforms to achieve basic requirements for fiscal transparency. Hasn’t that become worse thereafter?
"The Auditor-General has budget cuts imposed by the General Treasury. A good number of vacancies had not been filled in for years. AG had to face endless difficulties in obtaining necessary funds to carry out their legitimate functions"
The Auditor General’s Department Trade Unions too had insisted that the clause Nos. 21 - 25 should not be deleted. They had urged that the Auditor General’s powers, independence and authority be further strengthened over public finances. They had pointed out that both the President and the Prime Minister during their election campaign had assured that the Bill would be tabled in Parliament on February 19, 2015 and approved and raised the issue as to why the present government too had deferred enacting an important Bill even after 17 months from the scheduled date!
The Auditor-General is a Constitutional appointment (Article 153) by the President subject to the approval of the Constitutional Council. He could be removed only by adopting the procedure stipulated in the Constitution and upon an address of Parliament by the President. The Auditor-General is the Constitutional machinery introduced and established for the purpose of assisting the Parliament. Basic powers of the AG are laid down in the Constitution and problems have now arisen when additional powers are to be extended through proposed enabling legislation to make the office of the AG credible and effective for the benefit of the people. Shouldn’t we ensure producing high quality, insightful audits in order to improve public financial management and to reduce waste, fraud and corruption? This office began over two centuries (1799) ago in Sri Lanka.
Do you know the Commonwealth Heads of Government (CHOGM) in Sri Lanka in 2013 affirmed their commitment to the independence of supreme audit institutions and stated in their final communiqué “Heads recognised the contribution that strong, properly resourced and independent supreme audit institutions play in improving transparency, accountability and value for money to ensure that public funds are appropriately spent”? In Malta, in March, 2014, at the Commonwealth Auditors Generals’ Conference thereafter participants (including Sri Lanka) resolved to launch a campaign across the Commonwealth to make the CHOGM communiqué a reality. What are the barriers to make it a reality? It is the corrupt political leadership.
Constitutionally, the Parliament has been entrusted with the full powers and responsibility over the public finances. For this purpose, the Constitution has therefore mandated (Article 154 (5) that the AG be provided access to all books, records, returns and other documents; stores and other property; and to be furnished with such information and explanations as may be necessary for the performance of such duties and functions. This does not happen as desirable.
The Auditor-General (AG) is an officer of Parliament and has been constitutionally strengthened to perform his duties for the benefit of Parliament. AG’s role briefly is to safeguard, maintain and ensure financial integrity in the government.
"The Auditor-General is the Constitutional machinery introduced and established for the purpose of assisting the Parliament"
All the reports of the AG are therefore directed to the Parliament. In addition, Parliament could direct the AG to carry out a specific audit or request the AG to provide necessary advice or comments in regard to a matter under investigation. Parliament accordingly is the forum where AG’s reports are considered.
The AG’s primary duty is to analyse government spending and revenue and report its findings being the watchdog of the people to the Parliament. In other words, AG is the Agent of Parliament who has been entrusted with a specific job to audit the legality and regularity of financial management and accounting on behalf of the citizens to ensure efficient and effective utilization of public purse for the betterment of the people.
However, since the 1970s, the AG’s staff had been threatened, insulted, persecuted and pressurised when they had to perform their duties to protect public interests.
The most recent development is that certain MPs have reported the AG to the Prime Minister. Shouldn’t the relevant MPs request the PM to finalise investigations pending in CIABOC, PRECIFAC and FCID independently instead? Do you remember an Audit Superintendent Ambanwela was thrown acid at for his contribution to reveal a massive fraud running in to a few billions? May I add, I myself dealt with and became a victim when I got the AG’s Department to investigate Parliament. I was lucky that the CID reported to the Supreme Court, when my FR case was taken up that I had no hand in leaking the information to the AG. It was indeed a narrow shave!
Let me add, the officers who value social responsibilities have always positively facilitated auditing as a compulsory activity to protect public property and resources.
The officers who are corrupt with personal objectives to maximise income through devious means dislike auditing. Which category do you think most of the legislators fall?
Both PAC and COPE begin their work based on reports from the Auditor-General. It is the bureaucrats who have to answer the queries raised by the members of the Committee because they are responsible to the Parliament as accounting officers and administrative heads and not the politicians, which I believe is a serious deficiency in our system.
I would suggest laws be amended to issue surcharge notices on the relevant ministers as well. Furthermore, the follow-up mechanism after the hearing too need to be specified if we are to make tangible improvements with regard to the prevention and misuse of public funds. May I add, it is the lack of government responsiveness which is currently in issue and hence the Cabinet of Ministers must encourage establishing more innovative responses in this regard. Shouldn’t they establish far superior and more effective-follow up systems to ensure that the Auditor-General’s findings are properly implemented to improve public expenditure and the day-to-day administration.
The Auditor-General should therefore be given the required independence and strength to perform his duties without fear or favour in an unbiased manner. Independence no doubt is an evolving construct.
In Sri Lanka, in order to achieve better outcomes, we are presently building up a series of laws and the state of our mind to achieve bigger goals for the benefit of the people by upgrading AG’s independence. It has recently been in jeopardy as a result of the executive trying to make in-roads to the AG’s Department. This must be stopped.
There seems to be nagging ambiguity although the 19th Amendment has given more strength to the AG due to imprudence, inexperience, coarseness and arrogance of ministers and other petty politicians. Independence does not come by an accident. It has to be planned carefully, which could take years of persistent effort.
The overriding intention of the government should be to implement the same law that Britain had introduced – The National Audit Act (1983), which had provided the total independence to carry out the functions of the Auditor-General. The funds required for the AG in UK is provided separately by Parliament, on the basis of the estimates provided by the National Auditor-General having substituted treasury control over the operations of the National Auditor.
Shouldn’t we follow the mother Parliament? The AG could then accomplish the duties entrusted to him objectively and effectively in the name of good governance. AG could then function independently to serve the Parliament, without being dependent on the executive arm with the necessary freedom to act financially and administratively in order to be able to issue independent and unbiased reports to the Parliament.
The AG could then be more vigorously ensure accountability from the executive arm. All public financial operations without an exception must be audited. The executive arm includes the Cabinet of Ministers, Ministries, and departments etc. as stipulated in the Constitution. So the AG therefore, does not need to act on the dictates of the Cabinet of Ministers.
AG should be strengthened to carry out auditing even if ministers commit irregularities for personal gain. Shouldn’t we also take in to consideration the remarks made by the highly respected Former Auditor General S. Mayadunne “that the National Audit Commission has presently become dysfunctional”. It was during Mayadunne’s period he initiated this Bill.
If this Bill could have been enacted in 2005, losses reported by COPE and PAC reports running into billions could have been surcharged from the culprits without any difficulty. The relevant Bill has been gathering dust for decades.
My argument is that the Auditor-General should have the powers to issue surcharge notice against officers if they had acted contrary to the written law. As was stated by the President 19th Amendment was indeed a progressive step. It had specified the need for enacting the necessary enabling laws, i.e., “National Audit Bill”. Article No. 153 (A) provides for the establishment of an Audit Service Commission, the Auditor-General as the Chairman. Article 153 B (2) provides that Parliament should provide by law for meetings of the Commission, the establishment of the Sri Lanka State Audit Service. Shouldn’t every citizen support, unite and demand to “re-make Sri Lanka” once again? NATIONAL AUDIT LAW IS A NECESSITY!
In conclusion, Parliament has to rely on an independent statutory officer, the Auditor-General, in order to provide Parliament with information, whether the activities of the executive arm are correctly being carried out and accounted in accordance with the Parliament’s intentions and purposes.
The new Bill will ultimately strengthen the public sector auditing and public sector governance by providing accountability and transparency. It would thereby strengthen the core values of the public sector and ensure effective audit activities by helping to establish independent audit functions to take the country forward for the benefit of the people.
It is the Parliament that must take up the responsibility to ensure that the government is doing the right thing. This is why a powerful Auditor-General is necessary, who will be an apolitical expert and continuous window into the bureaucracy to implement necessary checks and balances, without which, it will go off the rails completely.