Harin’s ‘Smart Youth’ plunder 398 million rupees

A significant financial fraud has been revealed in connection with the ‘Smart Youth’ programme implemented by the National Youth Services Council from April to August 2024 

• The ‘Smart Youth’ exhibition and concert series were organised in a rushed manner
• The programme was aimed at alleviating the pressures faced by youth due to the Covid pandemic and the Aragalaya protest movement 
• Youth Councils and the Youth Development Division of the Youth Services Council were not consulted regarding the programme
• Fifteen ‘Smart Youth’ exhibitions and music concerts were organised across 15 major cities island wide with an approved budget of Rs. 398.25 million
• Part of the total cost for these concerts was covered by provincial offices, while the remainder was funded by the head office
• The audit underscored that bypassing the procurement process resulted in the losing out on discounts available to the NYSC

A major financial fraud has been uncovered in connection with the ‘Smart Youth’ programme, implemented by the National Youth Services Council from April to August 2024. This was revealed in an audit inquiry issued on January 6, 2025 which was carried out by the National Audit Office under inquiry number SYA/D/NYSC/2024/AQ/15. A Cabinet Memorandum No. 2024/22 was submitted by the then Minister of Sports and Youth on July 9, 2024, in order to organise the programme island wide. Observations from the then President, who also served as the Minister of Finance, were received on July 15, 2024, and Cabinet approval was granted during the meeting held that same day.

Former Sports Minister  Harin Fernando

The ‘Smart Youth’ exhibition and concert series were organised in a rushed manner. According to the Cabinet Memorandum, the programme was aimed at alleviating the pressures faced by youth due to the Covid pandemic and the Aragalaya protest movement, and thereby enhancing their enjoyment and mental well-being. However, the audit inquiry revealed that the Youth Councils and the Youth Development Division of the Youth Services Council were not consulted regarding the programme.

The Cabinet Memorandum emphasised that restrictions on interpersonal relationships, personal meetings and group gatherings placed considerable pressure on the youth, asserting that these effects were significant enough to contribute to the 2022 protest movement. However, the audit found that the justifications were scientifically supported. 

Fifteen ‘Smart Youth’ exhibitions and music concerts were organised across 15 major cities islandwide, with a Cabinet Memorandum submitted to approve a budget of Rs. 398.25 million. Submitting a proposal to provide entertainment for the youth without an adequate study is problematic. Despite this, the National Youth Services Council submitted a project report to the National Planning Department without a detailed report. Furthermore, the Council falsely claimed in the report that the Planning Department had conducted feasibility studies and evaluations, as revealed by the audit findings.

Click Here... Click Here... Extracts from the audit inquiry, which probed the misusing of funds regarding the ‘Smart Youth’ exhibition and concert series

Click Here...

The National Planning Department has also addressed a letter to the Budget Department regarding this matter. The letter underscores that the National Youth Services Council provided misleading information, claiming that physical health, mental health, and the prevention of non-communicable diseases among youth could be reduced to one-third by 2030. The audit further noted the absurdity of suggesting that a 3-4 hour music concert, scheduled to be held in a single location on one day, could build self-confidence, enhance self-esteem and contribute to the prevention of non-communicable diseases among youth.

Target group not properly identified

The target group for this project had not been properly identified prior to organising these music concerts. This raises questions about the overall success of the project. Additionally, concerns have been raised about the expenditure of the National Youth Services Council on the ‘Smart Youth’ exhibition and music concert, questioning whether the initiative truly fulfills the aspirations of the youth. Part of the total cost for these concerts was covered by provincial offices, while the remainder was funded by the head office. A budget of Rs. 398,250,000 was approved for this project, with a total expenditure of Rs. 323,393,250 for the concert series.  of this amount was spent on various supplies. Procurement guidelines were not adhered to in the purchase of equipment required for the concerts. Instead, suppliers were chosen based on limited market prices through the market price supply method. Furthermore, Rs. 61,674,850 of the total cost was paid to bands and singers. The audit revealed that there were no agreements detailing the criteria for selecting bands or the basis for payment to them. It was also uncovered that the Director General of the Youth Services Council instructed provincial offices to make payments to the respective musical groups.

Notably, Rs. 236,377,750

Additionally, Rs. 6,109,411 was spent on food and beverages. However, the audit found no clear evidence to determine whether this was intended for the participants or the staff. Moreover, Rs. 2,474,101 was allocated for entertaining guests and singers. Accommodation expenses for the programme amounted to Rs. 3,777,100, but the audit revealed that there were no bills for these expenditures.

The expenditure also included Rs. 2,419,000 categorised as “other allowances,” though the audit found no details explaining the purpose of these payments. Similarly, Rs. 3,381,420 was spent on fuel, but it was unclear which dates or events the fuel expenses corresponded to. During the procurement of goods for the concert, supply department officers were present, but were excluded from the process. Instead, coordination was handled by the Chairman of the Youth Services Council and the office. The audit pointed out that bypassing the procurement process resulted in the losing out on discounts available to the National Youth Services Council.

In this event, the required goods were not procured from suppliers registered under the Youth Services Council or through the Yellow Pages. Instead, they were obtained from six suppliers nominated by the former chairman, and payments were made accordingly. When quotations were invited for the ‘Smart Youth’ New Year festival, the Director General of the council directly instructed in writing to obtain services from six suppliers nominated by him.

Additionally, the National Youth Services Council failed to register suppliers for 2024. Although a newspaper advertisement was published on March 10, 2024, announcing particulars for supplier registration and mentioning the deadline as March 26, 2024, four suppliers were registered later with the special approval of the chairman. This registration process was conducted without the proper preparation of the suppliers’ basic documents.

Some of the registered suppliers were part of a group of individuals who established multiple companies under different names and submitted quotes during the procurement process to provide goods and supplies.

The procurement of goods and services for the music concerts, held in various parts of Sri Lanka, was not sourced locally from the relevant areas. Instead, supplies were obtained from distant locations. The audit highlighted that payments were made for accommodation and food for these groups, and if the goods and services had been procured locally, it could have saved up to 50% of the transportation costs.

Furthermore, an advance of Rs. 8,200,000 was paid during the Kuliyapitiya exhibition by a non-staff officer, violating Financial Regulation 371(2). Specific payments included Rs. 2,500,000 under voucher number 348 and cheque number 540411, Rs. 2,500,000 under voucher number 362 and cheque number 540425, Rs. 200,000 under voucher number 158 and cheque number 540421, and Rs. 3,000,000 under voucher number 364 and cheque number 540427. 

An additional sum of Rs. 7,333,422 was paid to a company- based on false information- for goods and services provided to the Youth Services Council in connection with the musical concerts. The musical concert and exhibition- planned in Hatton on July 15, 2024- were not held. Yet Rs. 234,592 was spent on it. Similarly, the concert scheduled in Welisara was also cancelled, but Rs. 60,700 was spent. Investigations have confirmed that funding for this programme came not only from the National Youth Services Council, but also from Sri Lanka Cricket.

Efforts to contact former Minister of Sports and Youth, Harin Fernando, proved futile. 

“Fraud investigation committees are being established to investigate corruption”- Hewapathirana

National Youth Services  Council Chairman  Chinthaka Hewapathirana

Addressing the issue, the current Chairman of the National Youth Services Council, Chinthaka Hewapathirana, said, “An audit has been conducted and fraud investigation committees are being established in line with government policy to investigate corruption and fraud at the ministerial level. The matter has been referred to the committee, and we will hold discussions with the Minister to decide on actions against those responsible.”