Parliamentary Series No. 119 Of The Seventh Parliament of The Democratic Socialist Republic of Sri Lanka (First Session)
First Report
From The Committee on Public Enterprises
Presented by Hon.DEW. Gunasekara Chairman of the Committee st On 01 of December, 2011
REPORT FROM THE COMMITTEE ON PUBLIC ENTERPRISES OF THE PARLIAMENT OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA ______
Composition of the Committee on Public Enterprises First Session of the Seventh Parliament
1. Hon. DEW Gunasekara (Chairman) 2. Hon. (Mrs.) Pavithra Devi Wanniarachchi 3. Hon. A.D.Susil Premajayantha 4. Hon. (Dr.) Rajitha Senaratne 5. Hon. Chandrasiri Gajadeera 6. Hon. A.P.Jagath Pushpakumara 7. Hon. T.B.Ekanayake 8. Hon. Mahinda Amaraweera 9. Hon. S.M.Chandrasena 10. Hon. (Dr.) Mervyn Silva 11. Hon. Lasantha Alagiyawanna 12. Hon. Sarana Gunawardena 13. Hon. Weerakumara Dissanayake 14. Hon. Lakshman Kiriella 15. Hon. Karu Jayasuriya 16. Hon. Ravi Karunanayake 17. Hon. (Al Haj) A.H.M.Azwer 18. Hon. Sajith Premadasa 19. Hon. Sunil Handunnetti 20. Hon. Arjuna Ranatunga 21. Hon. M.T.Hasen Ali 22. Hon. A.Vinayagamoorthy 23. Hon. Dayasiri Jayasekara 24. Hon. (Ven.) Athuraliye Rathana Thero 25. Hon. Seeniththamby Yoheswaran 26. Hon. Namal Rajapaksa 27. Hon. Eran Wickramaratne 28. Hon. (Prof.) Rajiva Wijesinha 29. Hon. E.Saravanapavan 30. Hon. Sujeewa Senasinghe 31. Hon. (Mrs.) Rosy Senanayake
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Content
Preface 1 General Observations 4 List of Appendixes 16 ∗ Appendix-A : Institutions examined 17 Main Committee 17 Sub Committee I 20 Sub Committee II 21 Sub Committee III 23
Major Issues of the institutions ∗ Appendix-B : Issues identified by the Main Committee National Gem & Jewellery Authority 25 State Mortgage & Investment Bank 25 University Grants Commission 26 Ceylon Fisheries Corporation 26 Sri Lanka Rupavahini Corporation 26 Samurdhi Authority 27 University of Sri Jayawardenapura 28 University of Moratuwa 29 National Institute of Business Management 30 Coconut Cultivation Board 30 Agriculture & Agrarian Insurance Board 31 Open University of Sri Lanka 32 Buddhist & Pali University of Sri Lanka 32 Hector Kobbekaduwa Agrarian Research 33 & Training Institute Ceylon Shipping Corporation 34 Cey- Nor Foundation 34 Lanka Sathosa Ltd. 35 Sri Lanka Telecom 35 Sri Lankan Airlines 35 Sir John Kotalawela Defence University 36 Sri Lanka Savings Bank 36 REPORT FROM THE COMMITTEE ON PUBLIC ENTERPRISES OF THE PARLIAMENT OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA ______
Mihin Lanka Ltd. 37 Hingurana Sugar Industries 37 Sri Lanka Rubber Manufacturing Export Corporation 38
Rajarata, University of Sri Lanka 38 Paddy Marketing Board 39 Independence Television Network & Lakhanda Radio 39 Janatha Estates Development Board 40 Kahatagaha Graphite Lanka Ltd. 40 National Paper Company Ltd. 40 B.C.C.Lanka Ltd. 41 Lanka Salu Sala Ltd. 41 Sri Lanka Broadcasting Corporation 41 National Science & Technology Commission 42 Chillaw Plantations Ltd. 42 Coconut Research Board 43 Uva Wellassa University 43 Kalubovitiyana Tea Factory Ltd. 44 University of Jaffna 45 National Institute of Library & Information Science 45 Post Graduate Institute of Agriculture 45 Kantale Sugar Industries Ltd. 46 Atomic Energy Authority 46 South Eastern University of Sri Lanka 47 Distance Learning Centre Ltd. 48 Institute of Biochemistry Molecular Biology & Biotechnology 48 Eastern University of Sri Lanka 49 Institute of Human Resource Advancement 50 National Institute of Technical Education 50 Post Graduate Institute of Science 51 PARLIAMENTARY SERIES NO. 119
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National Centre for Advanced Studies in Humanities and Social Sciences 52 Sri Lanka Cricket 52 Buddhasrawaka Bhikshu University 56 Sri Lanka Foundation 57 Institute of Fundamental Studies 58 Bank of Ceylon 58 National Institute of Education 60 People’s Bank 61 Sri Lanka Bureau of Foreign Employment 62 Ceylon Petroleum Corporation 64 State Timber Corporation 65 National Water Supply & Drainage Board 68 Ceylon Electricity Board 69 National Transport Commission 71 Water Resources Board 72 University of Peradeniya 73 SL Transport Board 74 Geological Survey & Mines Bureau 74 SL Ports Authority 75 Development Lotteries Board 77 Lanka Mineral Sands Ltd 78 National Building Research Organization 79 Airport & Aviation Services Ltd. 79 Mahaweli Authority 79 SL State Plantations Corporations 81 National Lotteries Board 81 University of Ruhuna 82 University of Kelaniya 83 Sri Lanka Institute of Development Administration 83 Land Reform Commission 83 REPORT FROM THE COMMITTEE ON PUBLIC ENTERPRISES OF THE PARLIAMENT OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA ______
SL Land Reclamation Development Corporation 85 Lanka Logistics Ltd 85 Urban Development Authority 86 Southern Development Authority 87 Samurdhi Authority 88 Wayamba University 89 Post Graduate Institute of Pali & Buddhist 89 National Savings Bank 90 Lankaputhra Development Bank 91 University of Sabaragamuwa 92 RDA & Maganeguma Companies 93 Telecommunication Regulatory Commission 94 ∗ Appendix C: Issues identified by the Sub Committee I Institute of Policy Studies 95 Local Loans & Development Fund 95 Superior Court Complex Management Board 96 SL Export Development Board 96 SL Convention Bureau 97 Securities & Exchange Commission 97 Tower Hall Theater Foundation 98 SL Institute of Local Governance 99 SL Accounting & Auditing Standards Monitoring Board 100 Udarata Development Authority 100 SL Tourism Promotion Bureau 102 Industrial Development Board 103 Insurance Board of SL 104 Rubber Research Board 105 National Enterprise Development Authority 105 Resettlement Authority 106 Rehabilitation of Persons, Properties & Industries Authority 106 PARLIAMENTARY SERIES NO. 119
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Condominium Management Authority 107 National Dangerous Drugs Control Board 107 Ranaviru Seva Authority 108 SL Inventor’s Commission 108 Janatha fertilizer Enterprise ltd 108 SL Cement Corporation 109 Lakdiva Engineering Co. Pvt ltd 110 Lanka Phosphate ltd 111 Milk Industries of Lanka Ltd (MILCO) 111 HDFC Bank 112 Elkaduwa Plantations Ltd 112 Central Engineering Consultancy Bureau (CECB) 113 Kurunegala Plantations Ltd. 113 SL Export Credit Insurance Corporation 114 SL Social Security Board 114 Swami Vipulananda Inst. of Aesthetics Studies 115 Consumer Affairs Authority 116 National Apprt.& Indt. Traing Authority(NAITA) 119 State Engineering Corporation of SL (SEC) 120 Board of Investment (BOI) 121 Central environmental Authority 124 ∗ Appendix D: Issues identified by the Sub Committee II Botanical Garden Trust Fund 125 Sri Lanka Institute of Printing 125 Institute of Post Harvest Technology 126 Land Survey Council 127 National Aquatic Res. Research & Deve. Authority 128 State Printing Corporation 128 Colombo Commercial Fertilizer Company 129 Sugarcane Research Institute 131 Tertiary & Vocational Education Commission 131 REPORT FROM THE COMMITTEE ON PUBLIC ENTERPRISES OF THE PARLIAMENT OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA ______
National Engineering Research & Devep. Centre 132 Sugathadasa National Sports Complex Authority 132 Hadabima Authority of SL 133 SL Institute of Textile & Apparel 134 SL Council for Agriculture Research Policy 134 Official Languages Commission 135 Arther C. Clark Inst. for Modern Technology 136 National Disaster Management Centre 137 National Council for Elders 137 Sri Lanka Press Council 138 National Human Resources Development Council 139 Textile Quota Board 140 SL Freedom for Hunger Campaign Board 141 Mantai Salt ltd 141 Lanka Fabrics ltd 142 National Secretariat for Persons with Disabilities 143 National Inst. of Social Development 144 Industrial Technology Institute 144 SL Inst. of Tourism & Hotel Management 145 SL Tourism Development Authority 145 Paranthan Chemicals ltd 146 SL Accreditation Board for Conformity Assessment 147 SL Cashew Corporation 148 West Coast Pvt. Ltd 149 NHDA/NEMO 149 State Development & Construction Corporation 151 Public Utility Commission 153 NLDB 154 Institute of Technology 155
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∗ Appendix E: Issues identified by the Sub Committee III Institute of Indigenous Medicine, Affiliated to the University of Colombo 156 Sri Lanaka Ayurvedic Drugs Corporation 156 Sri Lanka Institute of Advanced Technological Education 156 National Transport Medical Institute 157 Postgraduate Institute of Archeology 157 Homeopathic Medical Council 157 Postgraduate Institute of Medicine 158 National Science Foundation 158 Provident Fund for Buddhist & Pali University 159 Post Graduate Institute of English 159 University of Colombo School of Computing 159 University of Colombo 159 Universities Pension Fund & Provident Fund 159 National Youth Services Council 160 State Pharmaceuticals Manufacturing Corporation 160 J. R. Jayawardena Centre 160 Mahapola Higher Education Scholarship Trust Fund 161 University of Visual & Performing Arts 161 National Institute of Cooperative Development 161 National Institute of Language Education & Training 161 Gem & Jewellery Research & Training Institute 162 Central Cultural Fund 162 Institute of Construction Training & Development 162 Thurusaviya Fund 162 National Institute of Plantation Management 163 Tea Research Institute of Sri Lanka 163 Skills Development Fund 163 Lady Lochore Loan Fund 163 Information & Communication Tech. Agency of SL 164 REPORT FROM THE COMMITTEE ON PUBLIC ENTERPRISES OF THE PARLIAMENT OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA ______
Sri Lanka Handicrafts Board 164 Ceylon Ceramics Corporation 164 National Insurance Trust Fund 165 National Crafts Council 165 Selacine Television Institute 165 Northsea Ltd 166 Rakna Arakshana Lanka Ltd 166 National Design Centre 166 Tea Small Holdings Development Authority 167 National Book Development Board 167 Civil Aviation Authority 168 Tea Shakthi Fund 168 Sustainable Energy Authority 169 Ceylon Fertilizer Company Ltd. 169 Sri Jayawardenapura General Hospital 170 National Film Corporation 170 Ceylon Fishery Harbors Corporation 171 National Institute of Fisheries & Nautical Engineering 171 Sri Lanka Standards Institute 172 Marine Environment Protection Authority 172 National Child Protection Authority 173 National Aquaculture Development Authority 173 Co-operative Wholesale Establishment 174 STC General Trading Co. Ltd 174 State Trading (COOP)Wholesale Establishment Co. Ltd. 174 Employees Trust Fund Board 175 State Pharmaceuticals Corporation 175 Palmyra Development Board 175 National Library & Documentation Services Board 176
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______PREFACE
The Committee on Public Enterprises (COPE) for the First Session of the Seventh Parliament presents its report to Parliament in terms of the Standing Order 126.
The Committee having had its first meeting on the 8th June, 2010, decided to appoint three Sub-Committees on the basis of the sectors of Finance, Agriculture & Media and Education & Health, in order to expedite the process of examining Public Enterprises. It was agreed that the Main Committee would examine large scale Public Enterprises, whereas those small scaled Enterprises would come under the purview of sub-committees and their findings would be reported to the Main Committee. The Committee commenced examining the institutions on 4th August, 2010, and held its final sittings on November 18th, 2011 for the 2010/2011 period.
Since the formation, the Committee examined 229 public enterprises as stipulated in the table below. Committee Chairman No of Examinations Main Committee Hon.DEW Gunasekara 92 Sub Committee I Hon. A.D.Susil Premajayantha 39 Sub Committee II Hon.Karu Jayasuriya 39 Sub Committee III Hon.Lasantha Alagiyawanne 59
The Committee wishes to report to the Hon. Speaker and Parliament that it successfully completed its assignment of work for the ensuing period within a period of 16 months, an unprecedented record in the history of the Legislature.
It is the considered view of the Committee that the Report to be presented to Parliament should receive urgent attention by all Chief Accounting Officers. Its contents should be carefully noted by the Chief Accounting Officers who are required to ensure that necessary action is pursued by the institutions under them. Senior public officers are more vulnerable in the area of procument of supplies, tender procedures and resulting in tender relevant awards and the execution of works thereof. It will not be out of place to quote from the forward as embodied in the Code of the Financial Regulations under the hand of the then Secretary to the Treasury, Mr.H.Jinadasa Samarkkody, in January, 1966 when he wrote;
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“ The Minister of Finance has, therefore, ordered that in respect of matters above mentioned, the Heads of State institutions may, in appropriate circumstances, deviate from the procedures laid down if he is satisfied that such action is necessary in the public interest.”
Let us harken to our conscience whether we sincerely and in good faith do so in such manner as not to compromise public interest for personal benefits.
It is also the view of the Committee that the Administration / Management should give careful consideration to the general observations, comments and recommendations made by the COPE. The specific recommendations in respect of each one of those institutions should be discussed by the Board of Directors.
Audit is an integral part of the concept of transparency and accountability be it to the share-holders, management, administrations or the legislature. Audit acts as an aid to management and administration which are complimentary and not adversial. This crucial aspect needs wider appreciation by all the stake holders.
This is a perceptible global trend to increase the mandate of the government audit with a view to making the parliamentary control over the state finance more effective. We are moving more and more from the usual regularity and transactions audit- to the economy, efficiency, and effectiveness audit in view of the expanding plans and programmes in the context of our socio- economic objectives. It needs to be understood that what people expect from us is value for money which means nothing but economy, efficiency, and effectiveness.
Therefore, it has become necessary to enhance the professional capacity of Audit so as to assure the people of the social relevance and worthwhileness of Audit.
The Committee offers its thanks and appreciation to the Auditor General and his staff and also the officials of the General Treasury (Department of National Budget and Department of Public Enterprises) for their unstinted co-operation during the course of our examinations. We believe that the Committee has been able to strengthen the cause of public accountability to which Audit is committed and dedicated.
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Last but not least, the Committee expresses its deep appreciation of the hard work done by the staff of COPE and of their relentless efforts to complete the assignment before the deadline.
It is hoped that this report will generate interest and vigilance amongst the general public to create awareness and alert amongst the public officers and stimulate the Audit on the concept of transparency and accountability.
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General Observations & Recommendations The following observations, which were generalized by considering the findings of the examinations conducted by the main committee and the three sub committees, were seemed to be common for the most of the Public Enterprises scrutinized and many of the institutions had failed to correct them even though some of the observations were stipulated in the previous COPE report as well.
These observations are based on the position prevailed at the time of examination.
(1) Corporate Plans & Action Plans It was apparent that many of the institutions had not given due attention on the Corporate Plan and the Action Plan. The Institutions such as, Lanka Sathosa, Ceylon Shipping Corporation, Buddhist & Pali University, University of Sri Jayawardenapura, National Aquatic Resources Research & Development Agency, State Printing Corporation, Tea Research Institute and the National Dangerous Drugs Control Board had not updated their Corporate Plans in accordance with the Public Enterprises Circular as at the date of examination. A considerable number of institutions had failed to achieve the targets in the Corporate Plan and some institutions had prepared Corporate Plans merely for the submission.
Recommendation It is essential for a public enterprise to prepare and update its Corporate Plan annually and to strictly adhere to the Treasury Circulars when the plan is prepared. The line Ministry may help the institutions to prepare the Corporate Plan and the Action Plan and should monitor whether the targets stipulated in the Corporate Plan are achieved. A committee may be appointed to review the performance of the Corporate plan at least quarterly.
(2) Procurement Plan It is the view of the Committee that not preparing the procurement plan in advance has led to many issues such as purchasing unnecessary goods and goods in inferior quality, making payments before the receipt of the goods etc. Therefore, it is recommended to prepare the procurement plan soon after the allocations are made by the budget. 4 PARLIAMENTARY SERIES NO. 119
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(3) Audit & Management Committees It was observed that the Audit & Management Committee of many institutions had not been functioning as expected and more over, several Enterprises did not have a Committee appointed. The above Committee of the National Institute of Business Management had met only once for the year 2010, and that of the Hector Kobbekaduwa Agrarian Research & Training Institute, University of Sri Jayawardenapura, Sri Lanka Press Council, Homeopathic Medical Council and the Lanka Phosphate Co. Ltd had met only twice for the year 2010 as at the date of examination.
Recommendation The Committee should meet at least once in every three months. Further, the report of the Audit & Management Committee must be tabled at the board meeting for the attention of the chairman and the board of directors. The treasury representative of the board, who is supposed to be the chairman of the Committee, needs to perform his duty very efficiently with a view to upgrading the state of the institution. It is the view of the Committee that the quality of the members of the Audit and Management Committee needs enhancement. The Auditor General’s Department and the Treasury should collectively give consideration to this need.
(4) Tabling of Annual Reports Almost all the institutions summoned had not tabled the Annual Reports in time. The Agricultural & Agrarian Insurance Board, Sri Lanka Institute of Printing and the SL Institute of Local Governance had presented no annual report to the Parliament after 2005 as at the date of examination. For most of the other institutions, there were two to three outstanding reports to be tabled before the parliament. Several Organizations of which the government has only a proportion of total shares, such as Sri Lankan Air lines, Mihin Lanka had not tabled the annual reports before the Parliament at all.
Recommendation The legal provisions with regard to the tabling of annual reports lies in the section 14 of the Finance act No. 38 of 1971. Accordingly, it is imperative that any organization
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with government owned shares must prepare and table the annual reports in Parliament as a means of showing public accountability. They must be tabled by 31st of May or if it is not submitted before the stipulated date, the chairman and the board of directors should be held responsible and the secretary of the ministry, as the chief accounting officer, should take the final responsibility with regard to the timely presentation of annual reports. We recommend that the chairmen who do not submit annual reports in time should not be re-appointed as heads of institutions.
(5) Unsatisfactory Recovery of Debts and Receivables
Recovery of debts and receivables had been a serious issue for many of the institutions. These receivables can be categorized as follows; (1) Amounts to be recovered from the retired officers, (2) Amounts to be recovered from the officers, who had been transferred, (3) Amounts to be recovered due to breach of agreements, (4) Amounts due from other government Institutions for services provided. (5) Amounts to be recovered from external parties for services provided.
5.1 Amounts to be recovered from the Retired Officers It was crystal clear that action could have been taken to collect the particular dues at the time of retirement through the pension or from any fund payable to the employee by the Government. Since the officers who were involved with the clearance process had not performed their duties properly and consequently, the Government had lost a good sum of money.
5.2 Amounts to be recovered from the officers who had been Transferred The Committee observed several instances where the recovery of dues had been neglected with regard to the officers those who had been transferred to other Government institutions. Since these officers are still in the Government Service, recovering possibility of the debts still exists. The documents relating to these debts should have been sent to the present working places for further action. It is the responsibility of the present management of such institutions to expedite the recovery process.
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5.3 Amounts due to Breach of Agreements Many Institutions relating to the higher education had confronted with this problem as the officers, those who went abroad on study leave had not reported back to work even after completing studies. The following table shows the debts recoverable, to the nearest million, in several institutions due to breach of agreements, as at the date of examination.
Institute Amount/Million University of Sri Jayawardenapura 69 University of Moratuwa 17 National Institute of Business Management 0.3 Open University 40 Hector Kobbekaduwa Agrarian Research & Training Institute 11 University of Peradeniya 105
5.4 Amounts due from other Government Institutions There were loans to be recovered from other Government Institutes which are outstanding for several years. Mihin Lanka owed Rs. 10,000,000 to SL Rupavahini Corporation which had not been paid to date. The amounts payable to Sri Lanka Ports Authority by the Ceylon Shipping Corporation is Rs. 50 million and had been displaying in final accounts for years without being settled. The Mihin Lanka had not paid interest for a loan of Rs. 500 million obtained from Air Port and Aviation Services (Pvt.) Ltd. The debts owed by the Sri Lanka Rubber Manufacturing & Export Corporation to the People’s Bank and the General Treasury are Rs. 115 million and Rs. 1385 million respectively.
5.5 Amounts to be Recovered from External Parties For not taking action in the proper time and weaknesses caused in follow up actions, many external debtors had defaulted payments. It was observed that, in the State Mortgage and Investment Bank, number of loans had been defaulted after paying only one or two installments. Sri Lanka Rupavahini Corporation had not taken action to recover Rs. 42,649,586 receivable from various political parties for the use of air time.
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Recommendation Strong attention should be focused on the clearance process before the retirements or transfers of officers. There must be a proper co-ordination with the Department of Labour and Department of Pensions to take necessary action to deduct these dues from the pension or any other fund to which the relevant employee is entitled. If there is no way of deducting the dues from the particular officer, action should be taken to recover it from guarantors. The Universities Act should be amended and conditions should be tightened to prevent the breach of agreements by the officers going abroad on study leave. Legal action should be taken against the external defaulters and if there is no way of recovering the debts, their names should be blacklisted. The Treasury may formulate a strategy for a loan scheme applicable to the entire public service so that the burden on the particular institute in which the employee is working, is released.
(6) Legal Issues The Committee identified several cases where the public money had been wasted due to legal issues. Spending money on constructions without getting the ownership of lands verified, pending cases in courts which stands for several years making payments to lawyers are the two dominant facts encountered. Open University of Sri Lanka had spent Rs.18, 716,902 for the construction work of three regional centers on lands whose ownership had been challenged. Due to a dispute arisen in the Buddhist & Pali University in relation to an employee problem, Rs. 2 million had been spent so far as payments for Lawyers but the case is still pending before the court.
Recommendation It is recommended to get the dispute resolved through the Labour Tribunals and the Attorney General should be consulted in the nick of time.
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(7) Financial Stability of Institutions The Committee would categorize all the institutions summoned under the following categories. 1. Institutions with a stable financial position. 2. Institutions running at a break even. 3. Institutions with decreasing revenue. 4. Institutions running at a loss.
In this report, more emphasis would be placed on the latter two as they are the entities which seek immediate attention of the authorities.
7.1 Institutions with decreasing revenue
National Gem & Jewellery Authority, State Mortgage & Investment Bank, Sri Lanka Rupavahini Corporation, Sri Lanka Telecom were several institutes which had recorded a significant decrease in profits over the years. The most alarming fact is that the decrease of revenue of institutes like State Mortgage & Investment Bank, Sri Lanka Rupavahini Corporation and Sri Lanka Telecom is around 90% by the year 2009.
7.2 Institutions running at a loss/deficit
Out of the institutions examined by the Committee, the following institutions were found to be loss making/deficit entities for the financial year 2010.
• Tea Small Holdings • Urban Development Authority Development Authority • Mihin Air ltd • Tea Shakthi Fund • Ceylon Petroleum Corporation • National Youth Services • Atomic Energy Authority Council • Sri Lanka Mahaweli Authority • Thurusaviya Fund • National Dangerous Drugs Control • National Child Protection Board Authority • Sugathadasa National Sports • Janatha Estate Development Complex Authority Board • Sri Lanka Press Council • Ceylon Ceramic Corporation • National Gem & Jewellery • Sri Lanka Inventors Authority Commission • Marine Environment Protection • Sri Lanka State Plantation Authority Corporation • Sri Lankan Air Lines 9 REPORT FROM THE COMMITTEE ON PUBLIC ENTERPRISES OF THE PARLIAMENT OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA ______• Co-operative Wholesale • Ceylon Fishery Harbors Corporation Establishment • National Enterprise Development • Paddy Marketing Board Authority • State Trading (wholesale) • Industrial Development Board Company Ltd • Samurdhi Authority of Sri Lanka • Social Security Board • Sri Lanka Cashew Corporation • Sri Lanka Ports Authority • National Water Supply & Drainage • National Disaster Management Board Centre • Ceylon Fisheries Corporation • Road Development Authority • National Housing & Development • Sri Lanka Transport Board Authority • National Aquaculture Development Authority
(Source-Auditor General’s Department)
Recommendation
Excessive staff, increasing expenditure, poor management, dearth of capital etc. had been the prominent factors for this situation and introducing retirement programmes to reduce the excessive staff and a radical restructuring is recommended.
(8) Unfilled Vacancies Some of the institutions had not taken action to fill the approved carder of the institute whereas in some institutes, an excessive staff was observed under some designations. The following table illustrates the position of carder of some selected institutes at the time of examinations.
Institute Approved Cadre No of Vacancies
Sir John Kotalawala Defence University 236 34
National Gem & Jewellery Authority 272 80
Hector Kobbekaduwa Agrarian Research & 210 63 Training Institute Coconut Cultivation Board 802 195
Samurdhi Authority(2009) 27,684 3162
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______Sri Lanka Rupavahini Corporation had 439 vacancies under 191 designations and excess of 183 officers under 72 designations.
Recommendation It is recommended to the Treasury to revise the carder of these institutions.
(9) Replies to Audit Queries Majority of the institutes examined had neglected providing replies to audit queries and it was the opinion of the Committee that many issues could have been tackled upon a dialogue with the Auditor-General without bringing them before the Committee.
Recommendation Internal Auditor of the Ministry should focus attention on this issue, and examine whether replies are sent properly and on time. The CAO must be held responsible for the replying to audit queries on a timely basis. The Auditor General should bring any lapse in not replying to audit queries in time, to the attention of the Chairman of the board and the Secretary to the Ministry. The Auditor General should also be notified on the action taken on the issues.
10. Amendment to the Standing Order 126
The Committee identified several instances where some enterprises such as West Coast (Pvt) Ltd., Maganeguma Companies, and subsidiaries of CEB were of the opinion that they do not come under the purview of the COPE as they are private limited Companies incorporated under the Companies Act and also due to the fact that they are not audited by the Auditor General and further, some institutions had sought the opinion of the Attorney General as well.
The standing order 126 (2) states “ It shall be the duty of the Committee to examine the accounts of the public corporations and of any business or other undertaking vested under any written law in the government laid before parliament , along with the reports of the Auditor General thereon.”
Being based on that, the Attorney General, when his opinion had been sought by the LECO Company ltd. has stated in his letter dated 07.05.2009, that the duties of the COPE are confined to examine the accounts of the public corporations and any
11 REPORT FROM THE COMMITTEE ON PUBLIC ENTERPRISES OF THE PARLIAMENT OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA ______business or other undertaking vested under any written law in the Government. He has further stated that “ a public corporation in terms of Article 170 of the constitution is defined to mean “ Any Corporation, board or other body which was or is established by or under any written law other than the companies ordinance, with funds or capital , wholly or partly provided by the government by way of grant loan or otherwise.”
As such, the Committee recommends amending the standing orders empowering the Parliament to summon above sort of companies irrespective of the fact that whether it is audited or not audited by the Auditor General and instituted under companies law or otherwise. If a particular institute has its own subsidiaries or associates, their financial particulars must be disclosed in the parent Annual Report.
11. Mid Year Performance Report It is recommended to the treasury to prepare a mid year performance report with respect to each public enterprise and copies be sent to the chairman of the enterprise and also to the secretary to the relevant ministry.
12. Revising Outdated Procedures
It is the view of the Committee that the efficiency of Public Enterprises had seriously been affected by outdated procedures, methods adopted continuously from several decades ago. For instance, much time is wasted in obtaining permission for carder and the institute had to run for several years with vacancies
Further, it is recommended that the institutions should be permitted to hire employees on fixed contracts with no provision for extensions or permanency unless appropriate qualification for permanency is obtained. The institutions with adequate capacity and mandates of an extensive nature should be permitted to employ personnel in terms of needs, provided that these do not become an additional burden on public funds.
Investments made with dedicated funding of many institutions, in particular in the Universities, are often questioned in audit queries due to the deviation from the formal procedure of obtaining Treasury approval for such institutions. Therefore, it is recommended that these procedures be revised and that the institutions with adequate capacity and mandate of an extensive nature be empowered to take their own decisions with internal procedures to ensure transparency and accountability.
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______13. Duplications
The Committee found several institutions that are redundant and much overlapped with regard to functions. It is recommended that the Government review the need for so many statutory institutions and combine those that work in similar areas while laying down distinct responsibilities and targets and close down those which are a drain on public funds.
14. Poor Supervision of the General Treasury
The Department of Public Enterprises and the National Budget are the controlling arms of the public enterprises and various circulars and instructions are issued by these two departments for the sake of good governance and proper functioning of the institutes. An officer from the General Treasury is specially appointed to the board of directors of every public enterprise. But, the Committee observes that, although the instructions are issued by the Treasury, there is no proper supervision exercised by the Treasury, to see that these instructions and guidelines are adhered to by the public enterprises. Furthermore, it is recommended to pay special attention by the Treasury to see whether the Treasury representatives of the director boards are efficiently perform their duties in the boards.
15. Accountability
The Committee has observed in the case of several institutions that the responsibility for various lapses is being passed on to the previous Management or Board of Directors. The Committee considers that it is necessary to seek amendments to the Standing Orders of the Parliament making it mandatory for the members of the previous Management to present themselves before the Committee, when they are summoned.
16. Unqualified Personnel
In the case of certain institutions, the Committee observed that the Chairman and / or the Board of Directors are not qualified academically and professionally and many of them do not have enough experience in the particular field. The Ministries are requested to give their earnest considerations to this matter with all seriousness. The attention of the Committee on High Posts is drawn to this matter, when reappointments of officers are referred to the Committee.
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17. PAYE Tax Payments
There were a number of institutions where the PAYE tax is paid by those institutions on behalf of the employees, apparently on an understanding between the Treasury and the relevant Trade unions. Conceptually, the PAYE tax should be borne by the employee by virtue of the fact that he is a tax payer. This runs counter to the concept of Income tax from the point of view of distribution of income. This will in effect result in reduction of tax payable by the institutions since the profits are reduced by such payments. It is obviously unfair by PAYE taxpayers of other institutions. Longer this problem remains unsolved , more complications will arise in the future.
18. Private Auditors
In the case of institutions whose accounts are audited by private auditors, the Chief Accounting Officer should ensure that copies of these Audit Reports are forwarded to the Auditor General at the earliest.
19. Under utilization of funds.
Through the examinations of various public enterprises, it came into light that the provisions granted by the Treasury amidst many difficulties are not properly utilized by considerable number of institutions.
20. Abandonment of partly completed Projects & projects ended up with failure Another deplorable source that leads to wastage of public funds is the abandonment of partly completed projects on the way, after spending a large sum of money. For the Kohila Vagura Project of the Southern Development Authority, Rs.5,627,923 had been spent which has been suspended by now. In the examination of the Samurdhi Authority, the Committee identified number of projects of such nature. Some projects initiated by the Land reclamation and development Corporation had been ended up with a loss and some projects had been suspended by now.
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______Recommendation Many of such projects had been abandoned due to lack of Capital, legal issues, frauds committed by the officers involved with projects and also due to changes made in the initial design including modifications. It is recommended that a proper feasibility study must be carried out to foresee every aspect which affects the successful completion of the projects.
21. Amendments to the Acts The goals and the objectives of an institute should be changed with on going changes in the socio economic environment and the Committee observed that the activities of the institutions cannot be extended or carried out properly due to the restrictions lying in the relevant Acts under which they are incorporated. For instance, according to the act of Sri Lanka Land reclamation and Development Corporation, the provision available to stop illegal fillings of lands are limited. Therefore, it is recommended to amend the relevant Acts enabling the Public enterprises to function in a broader scope.
22. Granting Loans by Profit Making Institutions
It has been observed that certain profit making enterprises are in the habit of granting loans to other institutions. The COPE was in view that this practice should not be encouraged.
15 REPORT FROM THE COMMITTEE ON PUBLIC ENTERPRISES OF THE PARLIAMENT OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA ______
Appendixes
Appendix A: List of Public Enterprises examined by each Committee
Appendix B: Major issues identified in the examinations with the directions of the Main Committee Appendix C: Major Issues & problems discussed & the directives of the Sub Committee I
Appendix D: Major Issues & problems discussed & the directives of the Sub Committee II
Appendix E: Major Issues & problems discussed & the directives of the Sub Committee III
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Appendix A
REPORT FROM THE COMMITTEE ON PUBLIC ENTERPRISES OF THE PARLIAMENT OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA ______
No Institutions Examined by the Main Committee Date of Examination 1 National Gem & Jewellery Authority 4.08.2010 2 State Mortgage & Investment Bank 5.08.2010 3 University Grants Commission 17.08.2010 4 Ceylon Fisheries Corporation 18.08.2010 5 Sri Lanka Rupavahini Corporation 19.08.2010 6 Samurdhi Authority 20.08.2010 7 University of Sri Jayawardenapura 07.09.2010
8 University of Moratuwa 09.09.2010
9 National Institute of Business Management 23.09.2010
10 Coconut Cultivation Board 24.09.2010
11 Agriculture & Agrarian Insurance Board 06.10.2010
12 Open University of Sri Lanka 07.10.2010
13 Buddhist & Pali University of Sri Lanka 08.10.2010
14 Hector Kobbekaduwa Agrarian Research & Training 19.10.2010 Institute 15 Ceylon Shipping Corporation Ltd. 20.10.2010
16 Cey- Nor Foundation Ltd. 21.10.2010
17 Lanka Sathosa Ltd. 09.11.2010
18 Sri Lanka Telecom 30.11.2010
19 Sri Lankan Airlines 01.12.2010
20 Sir John Kotalawela Defence University 02.12.2010
21 Sri Lanka Savings Bank Ltd. 03.12.2010
22 Mihin Lanka Ltd. 07.12.2010
23 Hingurana Sugar Industries Ltd. 08.12.2010
24 Sri Lanka Rubber Manufacturing Export Corporation 09.12.2010
25 Rajarata, University of Sri Lanka 04.01.2011 26 Paddy Marketing Board 05.01.2011 27 Independence Television Network & Lakhanda Radia 20.01.2011
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No Institutions Examined by the Main Committee Date of Examination 28 Janatha Estates Development Board 08.02.2011 29 Kahatagaha Graphite Lanka Ltd. 10.02.2011 30 National Paper Corporation Ltd. 23.02.2011 31 B.C.C.Lanka Ltd. 24.02.2011 32 Lanka Salu Sala Ltd. 08.03.2011 33 Sri Lanka Broadcasting Corporation 09.03.2011 34 National Science & Technology Ltd. 08.03.2011 35 Chillaw Plantations Ltd. 23.03.2011 36 Coconut Research Board 05.04.2011 37 Uva Wellassa University 06.04.2011 38 Kalubovitiyana Tea Factory Ltd. 07.04.2011 39 University of Jaffna 03.05.2011 40 National Institute of Library & Information Science. 05.05.2011 41 Post Graduate Institute of Agriculture 06.05.2011 42 Kantale Sugar Industries Ltd. 25.05.2011 43 Atomic Energy Authority 26.05.2011 44 South Eastern University of Sri Lanka 07.07.2011 45 Distance Learning Centre Ltd. 08.06.2011 46 Institute of Biochemistry Molecular Biology and 10.06.2010 Biotechnology 47 Eastern University of Sri Lanka 21.06.2011 48 Institute of Human Resource Advancement 22.06.2011 49 National Institute of Technical Education 23.06.2011 50 Post Graduate Institute of Science 24.06.2011 51 National Centre for Advanced Studies in Humanities and 05.07.2011 Social Sciences 52 Sri Lanka Cricket 06 07.2011 53 Sri Lanka Foundation 07.07.2011 54 Buddhasrawaka Bhikshu University 08 07.2011 55 Institute of Fundamental Studies 19.07.2011 56 Bank of Ceylon 09.08.2011
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REPORT FROM THE COMMITTEE ON PUBLIC ENTERPRISES OF THE PARLIAMENT OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA ______
No Institutions Examined by the Main Committee Date of Examination 57 National Institute of Education 10.08.2011 58 People’s Bank 11.08.2011 59 Sri Lanka Bureau of Foreign Employment 25.08.2011 60 Ceylon Petroleum Corporation 23.08.2011 61 State Timber Corporation 24.08.2011 62 National Water Supply & Drainage Board 26.08.2011 63 Ceylon Electricity Board 07.09.2011 17.10.2011 64 National Transport Commission 09.09.2011 65 Water Resources Board 20.09.2011
66 University of Peradeniya 21.09.2011 67 SL l Transport Board 22.09.2011
68 Geological Survey & Mines Bureau 23.09.2011
69 SL Ports Authority 06.10.2011
70 Development Lotteries Board 12.10.2011
71 Lanka Mineral Sands Ltd 12.10.2011
72 National Building Research Organization 13.10.2011
73 Air port & Aviation Services Ltd 14.10.2011
74 Mahaweli Authority 18.10.2011
75 SL State Plantations Corporations 19.10.2011
76 National Lotteries Board 19.10.2011
77 University of Ruhuna 20.10.2011
78 University of Kelaniya 20.10.2011
79 Sri Lanka Institute of Development Administration 21.10.2011
80 Land Reform Commission 21.10.2011
81 SL Land Reclamation Development Corporation 24.10.2011
82 Lanka Logistics Ltd 24.10.2011
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No Institutions Examined by the Main Committee Date of Examination 83 Urban Development Authority 24.10.2011
84 Southern Development Authority 25.10.2011
85 Samurdhi Authority 25.10.2011
86 Wayamba University 28.10.2011
87 Post Graduate Institute of Pali & Buddhist 28.10.2011 88 National Savings Bank 31.10.2011 89 Lankaputhra Development Bank 31.10.2011 90 University of Sabaragamuwa 31.10.2011 91 RDA & Maganeguma Companies 14.11.2011 92 Telecommunication Regulatory Commission 15.11.2011 Institutions Examined by the Sub Committee I 01 Institute of Policy Studies 13.09.2010 02 Local Loans & Development Fund 14.09.2010 03 Superior Court Complex Management Board 16.09.2010 04 SL Export Development Board 16.09.2010 05 SL Convention Bureau 16.09.2010 06 Securities & Exchange Commission 17.09.2010 07 Tower Hall Theater Foundation 17.09.2010 08 SL Institute of Local Governance 17.09.2010 09 Accounting & Auditing Standards Monitoring Board 21.09.2010 10 Udarata Development Authority 08.12.2010 11 SL Tourism Promotion Bureau 08.12.2010 12 Insurance Board of SL 09.12.2010 13 Industrial Development Board 09.12.2010 14 National Enterprise Development Authority 28.06.2011 15 Rubber Research Board 28.06.2011 16 Resettlement Authority 28.06.2011 17 Rehabilitation of Persons, Properties & Industries 28.06.2011 Authority 18 Condominium Management Authority 15.08.2011 19 National Dangerous Drugs Control Board 15.08.2011
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Institutions Examined by the Sub Committee I (Contd…) 20 Ranaviru Seva Authority 15.08.2011 21 SL Inventor’s Commission 15.08.2011 22 Janatha fertilizer Enterprise ltd 16.08.2011 23 Lakdiva Engineering Co. Pvt ltd 16.08.2011 24 Lanka Phosphate ltd 16.08.2011 25 SL Cement Corporation 16.08.2011 26 Elkaduwa Plantations Ltd 19.09.2011 27 Kurunegala Plantations Ltd 19.09.2011 28 HDFC Bank 19.09.2011 29 Central Engineering Consultancy Bureau (CECB) 19.09.2011 30 Milk Industries of Lanka ltd (MILCO) 19.09.2011 31 SL Export Credit Insurance Corporation 14.11.2011 32 SL Social Security Board 14.11.2011 33 Swami Vipulananda Inst. of Aesthetics Studies 14.11.2011 34 Consumer Affairs Authority 14.11.2011 35 National Apprt.& Indt. Traing.Authority(NAITA) 15.11.2011 36 State Engineering Corporation of SL (SEC) 15.11.2011 37 Board of Investment (BOI) 15.11.2011 38 Central environmental Authority 15.11.2011 39 Consumer Affairs Authority 15.11.2011 No Institutions Examined by the Sub Committee II Date of Examination
01 Botanical Garden Trust Fund 17.08.2010 02 Sri Lanka Institute of Printing 18.08.2010 03 Institute of Post Harvest Technology 19.08.2010 04 National Aquatic Res. Research & Deve. Authority 20.08.2010 05 Land Survey Council 19.08.2010 06 Colombo Commercial Fertilizer Company 23.09.2010 07 State Printing Corporation 23.09.2010 08 Tertiary & Vocational Education Commission 06.10.2010 09 Sugarcane Research Institute 06.10.2010 10 National Engineering Research & Development Centre 13.10.2010
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Institutions Examined by the Sub Committee II contd… 11 Sugathadasa National Sports Complex Authority 14.10.2010 12 SL Council for Agriculture Research Policy 03.11.2010 13 Hadabima Authority of SL 03.11.2010 14 SL Institute of Textile & Apparel 03.11.2010 15 Official Languages Commission 08.11.2010 16 Arther C. Clark Center for Modern Technology 08.11.2010 17 National disaster Management Centre 08.11.2010 18 National Council for Elders 10.1102010 19 Sri Lanka Press Council 10.11.2010 20 National Human Resources Development Council 03.12.2010 21 Textile Quota Board 23.05.2011 22 Mantai Salt ltd 23.05.2011 23 SL Freedom for Hunger Campaign Board 23.05.2011 24 Lanka Fabrics ltd 24.05.2011 25 National Secretariat for Persons with Disabilities 24.05.2011 26 National Inst. of Social Development 24.05.2011 27 Industrial Technology Institute 30.05.2011 28 SL Tourism Development Authority 31.05.2011 29 SL Inst. of Tourism Management 31.05.2011 30 Lanka Fabrics Ltd 13.09.2011 31 Paranthan Chemicals ltd 13.09.2011 32 SL Accreditation Board for Conformity Assessment 13.09.2011 33 SL Cashew Corporation 16.09.2011 34 West Coast Pvt. Ltd 16.09.2011 35 14.10.2011 NHDA/NEMO 36 14.10.2011 State Development & Construction Corporation 37 17.10.2011 Public Utility Commission 38 NLDB 17.10.2011 39 Institute of Technology 17.10.2011
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No Institutions Examined by the Sub Committee III Date of Examination
01 Institute of Indigenous Medicine, Affiliated to the 22.07.2010 University of Colombo 02 Sri Lanaka Ayurvedic Drugs Corporation 22.07.2010 03 Sri Lanka Advanced Technical Education 10.08.2010 04 National Transport Medical Institute 11.08.2010 05 Postgraduate Institute of Archeology 11.08.2010 06 Homeopathic Medical Council 15.09.2010 07 Postgraduate Institute of Medicine 21.09.2010 08 National Science Foundation 21.09.2010 09 Provident Fund for Buddhist & Pali University of SL 21.09.2010 10 Post Graduate Institute of English 28.09.2010 11 University of Colombo School of Computing 28.09.2010 12 University of Colombo 28.09.2010 13 Universities Pension Fund & Provident Fund 28.09.2010 14 National Youth Services Council 01.10.2010 15 State Pharmaceuticals Manufacturing Corporation 01.10.2010 16 J. R. Jayawardena Centre 12.10.2010 17 Mahapola Higher Education Scholarship Trust Fund 12.10.2010 18 University of Visual Performing Arts 12.10.2010 19 Tea Research Institute 08.04.2011 20 Turusaviya Fund 08.04.2011 21 08.04.2011 National Institute of Plantation Management 22 08.04.2011 Institute of Construction Training & Development 23 08.04.2011 National Institute of Cooperative Development 24 08.04.2011 National Institute of Language Education & Training 25 08.04.2011 Gem & Jewellery Research & Training Institute 26 08.04.2011 Central Cultural Fund 27 Information & Communication Tech. Agency of SL 29.04.2011 28 SL Handicrafts Board 29.04.2011 29 Ceylon Ceramics Corporation 29.04.2011 30 Skills Development Fund 29.04.2011 31 Lady lochore Loan Fund 29.04.2011
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Institutions Examined by the Sub Committee III Contd… 32 National Insurance Trust Fund 29.04.2011 33 National Crafts Council 17.06.2011 34 North Sea Ltd 17.06.2011 35 National Design Centre 17.06.2011 36 Selacine Rupavahini Institute 17.06.2011 37 Rakna Arakshana Lanka Ltd 17.06.2011 38 Book Development Council 26.08.2011 39 Tea Small Holdings Development Authority 26.08.2011 40 Tea Shakthi Fund 26.08.2011 41 Civil Aviation Authority 26.08.2011 42 Sustainable Energy Authority 09.09.2011 43 Ceylon Fertilizer Company ltd. 09.09.2011 44 State Pharmaceuticals Manufacturing Corporation 14.09.2011 45 Sri Jayawardenapura General Hospital 14.09.2011 46 SL Standard Institute 15.09.2011 47 Marine Environment Protection Authority 15.09.2011 48 National Film Corporation 15.09.2011 49 National Child Protection Authority 15.09.2011 50 National Institute of Fisheries & Nautical Engineering 15.09.2011 (NIFNE) 51 Ceylon Fishery Harbors Corporation 15.09.2011 52 National Aquaculture Development Authority(NAQDA) 15.09.2011 53 13.10.2011 Co-operative Wholesale Establishment (CWE) 54 13.10.2011 STC General Trading Co. ltd 55 18.10.2011 State Trading (COOP)Wholesale Establishment Co. Ltd. 56 18.10.2011 Employees Trust Fund Board 57 18.10.2011 State Pharmaceuticals Corporation 58 20.10.2011 Palmyra Development Board 59 20.10.2011 National Library & Documentation Services Board
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Appendix B
PARLIAMENTARY SERIES NO. 119
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Date/Name of Major Issues & Problems Comments & Decisions of the Institute Identified the COPE & Ministry
1. Due to the violation of the 1. The matter should be taken agreement entered into between up at the Management Aug. 04, 2010 the Ministry on behalf of the Committee Meeting and a Authority and the American report should be submitted National Gem Traders Association, a sum to the Committee on the Gem & of Rs. 7 million had been action taken. Jewellery wasted. Authority 2. Revenue of the Authority had 2. The factors which had led to Ministry of been decreasing annually, this situation should be Environment whereas the expenditure identified, and the increases rapidly. corporate Plan should be prepared accordingly to overcome the issue.
3. A person who was recommended 3. A detailed report should be to be dismissed had been submitted within one promoted disregarding the month. recommendations.
4. An incentive allowance had been 4. The action doesn’t comply paid in a situation where the with the Treasury Authority incurred a significant Circulars. loss.
Aug. 05, 2010 1. A Large amount of loans 1. The CAO/AO was directed remained unsettled and a to submit a report within State significant number of loans had two months categorizing Mortgage & been defaulted after the payment all the loans indicating Investment of one or two installments. follow up action taken. Bank 2. The profit, which had been Rs. Ministry of 312 million in the year 2005, Finance & had dropped to Rs. 21 million Planning by 2008.
3. Rs. 586,000 had been spent for 3. Money had been spent in the maintenance of Koggala contrary to the objectives Beach Park and a home of the Bank. gardening development.
4. 25 audit queries had not been 4. The CAO/AO was directed replied. to send replies within two months.
25 REPORT FROM THE COMMITTEE ON PUBLIC ENTERPRISES OF THE PARLIAMENT OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA ______
Date/Name of Major Issues & Problems Comments & Decisions of the Institute Identified the COPE & Ministry
Aug. 17, 2010 1. Rs. 106 million had been paid to 1. Action taken in contrary to the officers as language the Public Enterprises University proficiency allowance. Circulars and directed to Grants send explanation to the Commission Committee on this matter.
Ministry of 2. The academic allowance had 2. The procedure doesn’t Higher been considered in the comply with the circulars Education computation of salaries, issued by the contributions to the EPF, ETF Commissioner General of and gratuity. Labour and directed to submit a report to the Committee.
Aug. 18, 2010 1. It has been decided to terminate 1. A detailed report on this the joint venture entered into joint venture was called in Ceylon with Union Fish Products within one month Fisheries Company Ltd. but legal issues Corporation have arisen over the matter.
Ministry of 2. The miscellaneous debtor 2. Recovery of debts is at an Fisheries & balance as at 31.12.2009 was unsatisfactory level. Aquatic Rs. 43 million. Resources 3. Action had not been taken to 3. A detailed report was called recover assets amounting to Rs. in within three months. 50,099,843 transferred to Ceylon Fishery Harbours Corporation.
Aug. 19, 2010 1. The Post of CEO had been 1. It was directed to delegate created irrespective of the fact the duties between the post Sri Lanka that there is no provision for of Director General and Rupavahini such a post under the CEO, avoiding any Corporation Rupavahini Act. possible conflict.
Ministry of 2. Action had not been taken to 2. Political parties had Mass Media recover Rs. 42,649,586 deliberately delayed the & receivable from various payments and a report Information political parties for the use of air including the names of time during election campaigns , those political parties, and although directions had been the amounts due and action Contd... issued during the last COPE taken against them, was meeting. called in within two months.
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Date/Name of Major Issues & Problems Comments & Decisions of the Institute Identified the COPE & Ministry 3. Despite the direction 3. One month was given to Sri Lanka given at the last COPE meeting take necessary action and Rupavahini to recover Rs. 10,000,000 from report to the Committee. Corporation Mihin Lanka, no action had been taken as at 27th July, 2010.
4. An amount of Rs. 2,508,624 4. A methodology should be which includes the advances established to recover all paid to the officers had been the dues from the officers written off as most of them are prior to their retirement or no longer in the service. being terminated.
5. The net profit which had been 5. A large sum of money is 137 million in 2006 had spent on salaries and bonus decreased up to 4.7 million by to the staff with excess 2009. cadre and directed to introduce a retirement scheme to bring down the expenditure.
Aug. 20, 2010 1. Some of the directions 1. CAO/AO agreed to submit given at the previous COPE a detailed report when the Sri Lanka meeting had been partly Committee requests. Samurdhi completed and some had not Authority been carried out at all.
Ministry of Partly completed directions Economic (i) Incorporation of the Samurdhi Development Banks. Relevant amendments to the Samurdhi Act have not been completed.
(ii) The Authority had failed to explain how the granting of loans to the beneficiaries helps the national economy at large.
2. The following projects remain 2. A detailed report was called Contd… uncompleted and some of them in regarding all these had been handed over to the projects. other institutes. (1) Tissue Culture Project – Nillamba (2) Rice Procession Centre – Kebithigollawa
27 REPORT FROM THE COMMITTEE ON PUBLIC ENTERPRISES OF THE PARLIAMENT OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA ______
Date/Name of Major Issues & Problems Comments & Decisions of the Institute Identified the COPE & Ministry (3) Metal Crushing Project Dimbulagala/Ameemara (4) Coir Dust Basket Project – Hettipola Sri Lanka (5) Fruit Export Project Samurdhi Authority 3. In comparison with the figures in 3. A detailed report was 2008, the expenditure of the sought stating a list of all Authority on Rural projects under each Development projects had category, the number of increased from 83 M. to 1611 completed projects and M., while that of social incompleted projects of it. development projects had increased by two fold.
4. A computer network system is 4. CAO/AO was directed to not available to the Samurdhi take prompt action to Banks. implement the computer network system for Samurdhi Banks.
Sept. 07, 2010 1. 2008 and 2009 Annual Reports 1. CAO/AO was directed to had not been tabled in take action to present the University of Parliament. reports without further Sri delay. Jayewardene -pura 2. For the years 2009 & 2010 each, 2. At least one meeting in only two Audit & Management every three months should Ministry of Committee meetings had been have been held. Higher held. Education 3. Attention has not been given as 3. It was directed to submit a directed in the previous COPE progress report on meeting regarding supervision formulation of the and reviewing the progress on Corporate plan within one the targets of the Corporate Plan month time. and 2006/2010 Corporate plan had not been updated.
4. A sum of Rs.3,010,188 had been 4. The CAO was advised to spent on initial plans of a waste resolve the problem, water refining centre without having appointed a Contd… getting the ownership of the committee. land verified.
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Date/Name of Major Issues & Problems Comments & Decisions of the Institute Identified the COPE & Ministry
5. A fund named as “ Vice 5. There is no accountability Chancellors Fund” was being of this fund and it was maintained despite the fact that directed to take action to no provision for such a fund was legalize the Fund. given by the University Act.
University of 6. Since the follow up actions had 6. A detailed report was called Sri not been taken in time, the in including the names of Jayewardene university had experienced a the officials responsible for -pura loss of Rs. 9.83 million which this incident. could have been recovered from the consultancy firm due to the collapse of the roof of the library building. 7. It was directed to prepare 7. There was Rs.69 million to be agreements in the future recovered from the lecturers including provisions to those who had breached settle the due amounts agreements. from EPF in case of breach of agreements.
8. Although a land in 8. No feasibility study had Borelesgamuwa was purchased been carried out before the to provide accommodation for purchase of the land. students, construction work had been stopped due to drainage problems.
Sept. 09, 2010 1. An amount of Rs. 17,789,658 1.(i) The CAO was directed to was to be recovered from 28 scrutinize the University of lecturers those who had breached possibilities to amend Moratuwa agreements and bonds. the Act to avoid such instances. Ministry of Higher (ii) Chairman, UGC was Education directed to submit a list of names of such lecturers and officers in all universities. 2. The Committee kept on record that compared to the other universities; performance of University of Moratuwa was satisfactory.
29 REPORT FROM THE COMMITTEE ON PUBLIC ENTERPRISES OF THE PARLIAMENT OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA ______
Date/Name of Major Issues & Problems Comments & Decisions of the Institute Identified the COPE & Ministry
1. Annual reports for the years 2008 1. The CAO/AO stated that Sept. 23, 2010 & 2009 had not been tabled in the reports had been sent to Parliament to date. the Ministry for approval. National Institute of 2. Audit & Management Committee 2. Need to hold meetings at Business meetings had not been held least one in every three Management regularly. months was emphasized.
Ministry of 3. An income of Rs. 1,126,099 had 3. Strong dissatisfaction was Youth been lost due to the withdrawal extended. An alternative Affairs of fixed deposits one week method should have been before the maturity to make found to pay the payments to the contractors. contractors.
4. A sum of Rs. 301,976 had been 4. The CAO/AO was directed written off from the dues to be to enter into an agreement recovered from the lecturers of with the lecturers before the Institute due to the inability them leave the country to to recover them. avoid this type of losses in the future. 5. A sum of Rs. 3.9 million had been paid as salaries for the 5. Since these kinds of actions employees without obtaining the lead to various malpractices approval of the salaries & Cadre and issues, it was Commission. recommended to get the approval of the Salaries and Cadre Commission before making such appointments.
1. The Corporate Plan had been 1. The CAO/AO was directed prepared just to be submitted to to prepare the Action Plan Sept. 24, 2010 the Committee before the according to the Corporate examination. Plan 2010 – 2014, and to Coconut submit the same to the Cultivation Committee after getting the Board approval of the Board of Directors. Ministry of Plantation 2. The existence of the Coconut 2. The CAO was directed to Industries cultivation Board, Coconut see whether these three Research Institute, and Institutes could be Coconut Development Board as amalgamated into one three different bodies which entity, and to submit a Contd... carryout functions of report to the Committee overlapping nature hinders the within two months. progress of the sector.
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Date/Name of Major Issues & Problems Comments & Decisions of the Institute Identified the COPE & Ministry
3. Livestock project implemented in 3. A report was called in Coconut coconut gardens had been within three months time Cultivation unsuccessful. having taken action to Board expand livestock project.
4. A loss of Rs. 1.7 million had 4. The CAO stated that the been experienced from the egg Board had taken action production unit of the model against the person who had coconut garden in Mahayaya. involved in the misappropriation of funds.
5. 195 vacancies remain unfilled as 5. The CAO/AO was directed at 24.09.2010. to see whether the filling
of these vacancies is necessary if the amalgamation of the Institutions takes place.
6. Although 3,44,000 infected 6. A detailed report was called coconut trees had been identified, in within three months. the pace at which the precautionary action being taken to prevent the spread of the disease is not in a satisfactory level.
1. No annual Report had been 1. CAO/AO was directed to presented to the Parliament after present all the outstanding Oct. 06, 2010 2005. reports without further delay.
Agricultural 2. As directed in the previous 2. CAO/AO was directed to & Agrarian COPE meeting, 3.5 million out get the issue solved with Insurance of Rs. 5 million which had been the Ministry of Board released to Agrarian Fair, had Agriculture. not been recovered.
Ministry of 3. In the previous COPE meeting, a 3. CAO/AO was directed to Finance & massive fraud with regard to the submit a report on the Planning payments of compensation for present position of this
the farmers victimized by the issue within two weeks.
closure of Mavil Aru sluice gate had been identified and had directed to present a report to the Contd... committee on the matter.
31 REPORT FROM THE COMMITTEE ON PUBLIC ENTERPRISES OF THE PARLIAMENT OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA ______
Date/Name of Major Issues & Problems Comments & Decisions of the Institute Identified the COPE & Ministry
Agricultural 4. The Corporate Plan for 2009 – 4. The CAO/AO was directed & Agrarian 2012 had not been updated to take action to rectify Insurance whereas the Action Plan had these shortcomings. Board been prepared without being based on the Corporate Plan.
5. An amount of Rs. 1,908,815 5. The CAO/AO was directed which was paid to 04 employees to attend to the matter and who had been released to other take necessary actions. institutions had not been reimbursed.
1. The amount to be recovered from 1. The CAO/AO stated that the lecturers who had breached the action was being taken Oct. 07, 2010 agreements is Rs. 40,671,948. to recover this amount.
Open 2. Re-valuation of assets had been 2. The CAO/AO agreed to University of carried out in a poor manner. rectify all the shortcomings Sri Lanka taken place at the re- valuation. Ministry of Higher 3. Three regional centers had been 3. The CAO agreed to get the Education constructed spending Rs. clearance early. 18,716,902 without getting the ownership of the lands verified.
4. The printing activities of the 4. The CAO/AO was directed university are performed at an to submit a detailed report unsatisfactory level and an on this within one month excessive cost incurred due to time. the fact that the printing had been done outside, while some printing machines had been idling for years.
5. Rs. 6.6 million had been paid 5. The CAO stated that the as proficiency language newly recruited officers are allowance contrary to thePublic not paid so. Enterprises Circulars. Oct. 08, 2010 Buddhist & 1. Corporate Plan had not been 1. The CAO was directed to Pali prepared according to the assist the University when University treasury circulars. the Corporate Plan is Ministry of prepared. Higher Education Contd...
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Date/Name of Major Issues & Problems Comments & Decisions of the Institute Identified the COPE & Ministry 2. The University has encountered a 2. The land with the extent of problem of increasing the 5 acres provided by the Buddhist & number of students as each government had not been Pali locally enrolled student should used effectively. University be given hostel facility.
3. Due to the legal matters arisen 3. Continuation of this between the University and situation may affect the several employees, for which students, Institute and also several cases are pending before to the officers involved the court, the University had irrespective of the fact that spent nearly Rs. 2 million so far these charges are false or as payments for lawyers. not, and therefore, the CAO was directed to see the possibilities of settling these issues immediately and send a report to the Committee accordingly.
4. An excess amount of Rs. 632,342 4. The CAO/AO agreed to had been paid as O.T. to the staff formulate a method to by giving more O.T. hours, rectify the issue. contrary to the Public Enterprises Circular.
1. The Corporate Plan for 2009 – 1. The CAO/AO was directed 2013 had been prepared to re-prepare the Corporate contrary to the Public Plan and also to update it Oct. 19, 2010 Enterprises Circular. on rolling plan basis.
Hector 2. Audit & Management Committee 2. It was directed to meet at Kobbekaduw for the year 2010 had met only least once in every three a Agrarian twice. months time. Research & Training 3. A significant delay ranging from 3. The CAO agreed to take Institute 01 to 03 years was observed in action to avoid such delays completing researches. in the future. Ministry of Agriculture 4. Action had not been taken to 4. A detailed report regarding recover Rs.11.46 million from these outstanding amounts 06 scholarship debtors. was called in within one month.
5. An aid amounting to US$ 65000 5. Money granted had not received for research work had been used for the intended Contd... been used for printing books. purpose.
33 REPORT FROM THE COMMITTEE ON PUBLIC ENTERPRISES OF THE PARLIAMENT OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA ______
Date/Name of Major Issues & Problems Comments & Decisions of the Institute Identified the COPE & Ministry
Hector 6. The carder of the institute had 6. It was directed to inform Kobbekaduw not been approved by the Dpt. of the committee, the treasury a Agrarian Management Services and 23 and the Auditor General Research & employees had been recruited after receiving the Training contrary to the scheme of necessary approval. Institute recruitment.
Oct. 20, 2010 1. An updated Corporate Plan is not 1. CAO agreed to submit an available. updated Corporate Plan to Ceylon the relevant authorities. Shipping Corporation 2. The investments valued at Rs. 2. The CAO stated that they 47,937,900 cannot be verified had received Scrip Ministry of due to the unavailability of share dividends also but the share Ports & certificates. certificates had been Aviation misplaced. It was directed to take actions to get it back. 3. A refundable advance of Rs.50 3. It was directed to take million obtained from the action to settle the Shipping Development Fund outstanding balances administered by the SLPA in without allowing them to 1997 had not been settled. be displayed in final accounts.
Oct. 21, 2010 1. The net assets worth of Rs. 1. The CAO was directed to 12,752,650 of Fish Net Factory take the assets back. Cey- Nor at Gurunagar had been taken Foundation over by the North Sea Ltd., but Ltd. no income had been received by the Govt. Ministry of Fisheries & 2. An outstanding withholding tax 2. It was directed to take Aquatic amounting to Rs. 2.6 million is necessary approval to write Resources being carried forward from the off this balance. Development year 2001, as the action cannot be taken due to the unavailability of documents.
3. No action had been taken against 3. The CAO stated that legal Contd... the person who evaded the action would be taken. payment of balance of Rs. 393,865 of a fishing boat worth of Rs. 2 million.
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Date/Name of Major Issues & Problems Comments & Decisions of the Institute Identified the COPE & Ministry
4. Reports and documents regarding 4. The Committee directed to Cey- Nor accounting matters had not been submit all the relevant Foundation given to the A.G.’s Dept. reports to the Auditor- Ltd. General’s Dept.
Nov. 09, 2010 1. 12 buildings had been obtained 1. The CAO was directed to on rent from CWE without take remedial action to Lanka reaching any agreement in settle these transactions. Sathosa Ltd. respect of rent and Rs. 106.5 million was payable to the CWE Ministry of in respect of the assets and Co- services supplied. operatives & Internal 2. The Company had spent 36 2. The Committee directed to Trade million for the purchase of introduce alternative polypropylene bags. methods to cut down the expenditure.
3. A proper reconciliation had not 3. The CAO agreed to correct been carried out with the daily the accounts. sales returns obtained from shops and the registers of monthly sales.
Nov. 30, 2010 1. Underpayment of 1. A detailed report analyzing telecommunication levy for the the amount of levy paid in Sri Lanka period from March 2003 to each year was called in. Telecom December 2009 amounted to Rs. 6,074,368,463. Ministry of Telecommuni 2. The Dept. of Inland Revenue cation & had charged a tax of Rs. 643 Information million for the years 1993/1994 Technology and 1994/1995.
December 01, 2010 1. A loss of Rs. 9.3 billion had been 1. As a whole, it was Sri Lankan reported for the financial year informed that loss had Airlines 2008/2009. been reported due to escalation of fuel Ministry of prices & global Ports & economic crisis and Aviation loss had been brought down to the break even Contd.. in the current year.
35 REPORT FROM THE COMMITTEE ON PUBLIC ENTERPRISES OF THE PARLIAMENT OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA ______
Date/Name of Major Issues & Problems Comments & Decisions of the Institute Identified the COPE & Ministry Sri Lankan 2. A net loss of Rs. 352.89 million 2. Company benefited by Airlines had been experienced under the the programme Fuel Risk Management however the particular Programme. loss resulted during the last 4 months
December 02, 1. Tabling of Annual Reports in 1. The CAO/AO agreed to 2010 Parliament had not been done. present all the outstanding reports including 2009 as Sir John early as possible. Kotalawala Defence 2. An Action Plan for the Corporate 2. The CAO/AO was directed University Plan of 2010 had not been to follow the guidelines prepared. given in the Public Ministry of Enterprises Circular No. Defence 12, when preparing the Action Plan.
3. The approval had not been 3. The CAO/AO agreed to obtained for the deposit of Rs. take action to obtain the 5,000,000 made in the State covering approval of the Mortgage & Investment Bank Hon. Minister of Finance. for the implementation of a loan scheme to the staff of the University. 4. Having observed that the 4. A significant decrease is figures submitted by the observed in relation to the University were student intake and no graduate contradictory, it was passing out each year. directed to submit a report with correct figures.
December 03, 1. Action had not been taken to 1. It was directed to review the 2010 review the Corporate Plan and Corporate Plan annually the Action Plan by the Board of and also to prepare the Sri Lanka Directors. Action Plan based on the Savings Bank Corporate Plan.
Ministry of 2. A sum of Rs.78.4 million 2. The case is pending before Finance & deposited in the Habib Bank by the Supreme Court. Planning the then Pramuka Savings Bank had not been settled by the successor of the Habib Bank, ie Hatton National Bank Ltd and the verdict issued by the court over the matter, is not favourable to the Sri Lanka Savings Bank.
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Date/Name of Major Issues & Problems Comments & Decisions of the Institute Identified the COPE & Ministry
December 07, 1. The Company is running at a 1. The CAO stated that the 2010 significant loss as follows; company had made a 16 2007/2008 – Rs. 3,356 million million operational profit Mihin Lanka 2008/2009 – Rs. 4,657 million for the last 6 months which (Pvt.) Ltd. 2009/2010 – Rs. 5,722 million can be viewed as a positive sign of turn back. Ministry of 2. The current liability of the Civil Company had been Rs. 2.4 Aviation billion.
3. The figures furnished by the 3. It was directed to submit the Company are different from following information those provided by the A.G.’s within one month. Dept. and evidence submitted is 1) The Capital Input insufficient. 2) Loss & Profit of the Mihin Lanka 3) No. of Passengers carried
4. The interest had not been paid in 4. The CAO mentioned that relation to the loans obtained the loan would be settled from Airport Aviation Services by the Treasury. (Pvt.) Ltd. for Rs. 500,000,000.
5. The Company had obtained a 5. The CAO stated that the bank overdraft amounting to Rs. bank overdraft has been paid 381.7 million. off with the interest.
December 08, 1. Action is being taken to wind up 2010 the Institute.
Hingurana The management and the assets Sugar had been handed over to the Gal Industries oya Plantations Ltd. by the Ltd. Treasury but still, 277.7 hectares of land remains under the Ministry of possession of the Hingurana State Sugar Industries Ltd. Resources & Enterprise Development
37 REPORT FROM THE COMMITTEE ON PUBLIC ENTERPRISES OF THE PARLIAMENT OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA ______
Date/Name of Major Issues & Problems Comments & Decisions of the Institute Identified the COPE & Ministry
December 09, 1. The private auditors had stopped 1. The CAO stated that the 2010 its functions in the Corporation action would be taken to due to non payment of Rs. 3.1 settle the dues to get the Sri Lanka lakhs owed to them, and more service of the auditors Rubber over, they had held some again. Manufacturi documents in their possession. ng & Export Corporation 2. The Corporation owes Rs. 115 million to the People’s Bank and Ministry of Rs. 1385 million to the General State Treasury. Resources & Enterprise 3. Various malpractices had taken 3. The Committee directed to Development place during the time of the submit a detailed report previous management. including the names of the previous Board Members, the way the Corporation was led to a loss incurring situation, and the persons responsible for that and legal action taking place regarding the Corporation.
4. The present management is 4. A full report was called in unaware of the closure of within a month’s time. Matugama Rubber Factory and certain malpractices and misappropriation of funds in the Corporation.
January 04 , 1. Annual report for the year 2009 1. It was directed to table the 2011 had not been tabled in annual report within two Parliament. weeks. Rajarata University of 2. A rent of Rs.9,979,000 had been 2. It was directed to get a Sri Lanka paid in respect of 57 houses used report from the Dept. of as student hostels without Valuation prior to the Ministry of obtaining a proper valuation. payments of this kind in the Higher future. Education 3. A loan balance of Rs. 670,942/- remains outstanding for a period 3. This amount remains un- of 01 to 03 years which is due recovered due to clear from 58 employees who had inefficiency of the Contd.. retired, vacated and transferred management. from their posts.
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4. Action had not been taken to 4. It was directed to take all recover security bonds possible action to recover amounting to Rs.2,593,185 due these amounts. Rajarata to breach of agreements by the University of lecturers those who had not Sri Lanka returned after completion of studies abroad.
5. Action had not been taken as per 5. It was directed to disclose the agreement, to get the the assets when preparing ownership of the assets worth of the accounts. Rs. 41 million belonging to the IRQUE project.
1. No record was available with 1. An interim report, including regard to certain leased out stores a list of stores that had January 05, and a lease rent totaling already been rented out and 2011 Rs.24,957,044/- remains the number of stores that receivable as at 31.12.2010. had been functioning at Paddy present, was called in. Marketing Board 2. An amount of Rs.533,044,709/- 2. It was directed to submit an Ministry of remains unrecovered and the total interim report stating the Co-operatives outstanding payable to various amount payable and & Internal creditors as at 31.12.2009 is receivable in relation to Trade Rs.2,138,777,007/- government institutions.
3. The Board had no adequate 3. The CAO/AO was facilities to store the bumper instructed to take necessary harvest of paddy expected in the steps to face the situation. coming season. January 20, 2011 1. Annual report for the year 2009 1. It was directed to take had not been tabled. action to table it as early as Independent possible. Television Network and 2. The radio channel had incurred a 2. Due to the amalgamation of Lakhanda significant loss, not shown in the accounts of the radio Radio accounts channel and the TV channel, the loss of the radio channel Ministry of has not been highlighted. Mass Media and Information
39 REPORT FROM THE COMMITTEE ON PUBLIC ENTERPRISES OF THE PARLIAMENT OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA ______
Date/Name of Major Issues & Problems Comments & Decisions of the Institute Identified the COPE & Ministry
February 8 , 1. No Annual report has been tabled 1. It was directed to submit 2011 after the year 2006. the rest of the reports within next three months. Janatha Estates 2. The institution had been running 2. It was directed to submit a Development at a loss for the past few years. report within one month, Board out of 17 estates 10 are running stating the estates that at a loss should be kept under the Ministry of institute and also the action States that should be taken with Resources and respect to the estates Enterprise running at a loss. Development
February 10, 1. Eighteen Annual reports had not 1. No information available 2011 been tabled in Parliament for the and the present Management period from 1992/1993 to makes an attempt to update the Kahatagaha 2009/2010 and the accounts for accounts. Graphite 18 years had not been submitted Lanka Ltd. for audit.
Ministry of 2. The favorable condition that was 2. The Company should find Industries prevailing at the time the the possibilities of and Government took over the introducing promotional Commerce management had deteriorated by programmes and also to now. initiate a joint venture with foreign entrepreneurs dealing with advanced 3. Loan amounting to Rs. 54 technology. million, obtained by the earlier management had to be taken over by the present Management, another Rs. 16 million to be settled. February 23, 2011 National 1. The Company is continuing with 1. It was directed to submit a Paper loss and it has been decided to report stating the action that Company lease out the Embilipitya factory can be taken to improve the Ltd. to an external party for 30 years. Embilipitiya and Valchchenai factories. Ministry of State Resources & Enterprise Development
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Date/Name of Major Issues & Problems Comments & Decisions of the Institute Identified the COPE & Ministry
February 24 , 1. The Committee noted that the 1. The Committee was 2011 Company had a liability of informed that the Company Rs.487 millions to the Treasury has taken steps to settle the B.C.C.Lanka and Rs.100 millions to the Bank dues by selling their Ltd. of Ceylon. properties to the UDA.
Ministry of 2. A land of 212 perches belonging 2. The Committee directed the State to the BCC had been sold to a CAO/AO to submit a Resources private party for Rs.87 millions detailed report on all the and presently the land had been lands of that nature sold by left out without being used for BCC, indicating the parties any valid purpose. to whom such lands had been sold.
March 08, 1. For the year 2009/2010, there 1. It was informed that the loss 2011 had been a loss of Rs,30 was due to the salaries paid millions. to the staff who had been Lanka sent on compulsory leave Salusala Ltd. during the restructuring process Ministry of State Resources
March 09, 1. Only two Audit & Management 1. It was directed to hold the 2011 Committee meetings had been prescribed number of held for the year 2010. meetings in the future. Sri Lanka Broadcasting 2. There had been an excess staff of Corporation 329 in the SLBC Cadre. 2. The Committee was informed that it had been Ministry of decided to transfer the and Mass excessive staff to the other Media channels of the SLBC as Information they had been in service for the last 10 to 12 years.
3. It has not been able to recover 3. It was directed to take the accumulated sum of Rs. 97.3 proper approval from the million ,the outstanding Treasury to write off the receivable amount up to the year unrecoverable out standings. 2006 which had reduced only Contd... upto Rs. 51 million by 2010.
41 REPORT FROM THE COMMITTEE ON PUBLIC ENTERPRISES OF THE PARLIAMENT OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA ______
Date/Name of Major Issues & Problems Comments & Decisions of the Institute Identified the COPE & Ministry
4. The following weaknesses were 4. It was directed to submit a observed. report indicating the action Sri Lanka i. High administration cost that could be taken to Broadcasting ii. Excess staff overcome this situation. Corporation iii. Lack of research and new developments iv. Less differentiation in the aired programmes v. No proper costing and pricing system vi. Non adherence to Laws and regulations
5. The loss of Rs.727 million 5. Having expressed its incurred in 2009 had been dissatisfaction, the Auditor adjusted and displayed as a profit General was directed to look of Rs.47 million in 2010 financial into the matter. statements by adjusting with the Government grant.
March 22 , 1. Annual reports after the year 1. It was agreed to table the 2011 2007 had not been tabled in outstanding reports by April, Parliament. 2011. National Science & 2. Since 1999, only one institution 2. As per the Act, it is required Technology had been reviewed in addition to to review four institutions Commission the two institutions which were per annum and directed to being reviewed. submit a report within two Ministry of months, indicating the Technology methodology as to how the & Research Commission could streamline the Institutions which carry out the functions of overlapping nature. March 23 , 2011 1. Due to an arbitration process, it 1. It was directed to submit a Chillaw had been difficult to take over the report with regard to the Plantations management of the company profits made from the year Ltd. which had been handed over to 1992 together with the Ministry of the Wayamba Plantations Ltd Management agreement Coconut despite the continuous efforts with the Wayamba Development made from 1994. Nevertheless, in Plantations Ltd. & Janatha 2002, the lease agreement had Estate been again extended for 15 years Development and as a result, Rs. 124 million
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Date/Name of Major Issues & Problems Comments & Decisions of the Institute Identified the COPE & Ministry had been paid as compensation at early termination of the Chillaw agreement. Plantations Ltd. 2. The administration cost of 2. It was directed to submit a Chillaw Plantations had gone up report on the administration by 94% in 2010. cost with a break down.
April 5 , 1. No Annual report has been tabled 1. It was directed to table the 2011 after the year 2007. outstanding reports as early as possible. Coconut Research 2. A loss of Rs. 581,200 had been 2. This situation had arisen Board incurred due to the sale of since the board had not 62,400 coconuts to a private adhered to the accepted Ministry of institution. procedure. Coconut Development 3. The board had spent Rs. 18.73 3. No permanent solution had & Janatha million since 2006 for research been found even after Estate purposes to control the Coconut spending a large sum of Development Wilt Disease in addition to the money. removal of the affected coconut trees from the field at a cost of Rs. 30.65 million.
4. The Committee considered that 4. It is recommended to the Coconut Cultivation Board , amalgamate these three The Coconut Research Institute institutes if they are and the Coconut Development functioning with Authority are three entities with overlapping objectives. overlapping functions.
April 6 , 1. A vehicle had been hired by the 1. It was informed that the first 2011 University without considering and the second quotations the lowest quotation. had been withdrawn by the Uva Wellassa owners and therefore, the University tender had been offered to the third lowest quotation as Ministry of there was no other Higher alternative. Education 2. The positions of the bursar and 2. The Committee was the registrar had been on acting informed that it had been Contd.. basis for a considerable period. difficult to recruit new personnel for the existing salary scales.
43 REPORT FROM THE COMMITTEE ON PUBLIC ENTERPRISES OF THE PARLIAMENT OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA ______
Date/Name of Major Issues & Problems Comments & Decisions of the Institute Identified the COPE & Ministry
3. Percentage of employments 3. The Committee expressed received by the students its pleasure on this Uva Wellassa completed the first 05 degree achievement University programmes as follows. • Bachelor of Animal Science-96% • BSc in Computer Science & Techg.-84% • BBM in Enterp. & Mgt.- 77% • B. Tech in Science & Techg-71% • BSc in export Agri.-63%
April 7 , 1. The Corporate plan , Action plan 1. It was directed to submit 2011 , Annual Budget, quarterly such reports without further reports had not been submitted delay. Kalubovitiya to the treasury , Auditor General The Committee expressed na Tea or the Parliament. its dissatisfaction on this. Factory Ltd. 2. The annual tea production shows 2. It was directed to submit a Ministry of a declining trend for the period report on this matter within Plantation from 2005 to 2009, although the three months time to the Industies price of tea had increased over Department of Public the period. Enterprises to monitor the situation closely.
3. It was observed that there is a 3. This shows the poor level of difference of Rs. 4,269,344 recording entries in ledgers. between the audited account balances and the ledger balances and further, a difference of Rs. 19,423,126 between the Head office account balance and the relevant factory account balances. There was a difference of Rs. 15,527,107 between 14 ledger account balances and the relevant balances appearing in the Trial balance.
4. A sum of Rs.22,465,416 which 4. It was directed to send a should have been refunded to Sri report after solving the Lanka Tea Board had not been problem. returned.
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Date/Name of Major Issues & Problems Comments & Decisions of the Institute Identified the COPE & Ministry
1. Annual reports from 2007 had to 1. It was directed to table them May 03 , be tabled in Parliament. without further delay. 2011 2. The Waste Water Disposal 2. The Vice Chancellor had University of project which had initially been unaware of this and Jaffna estimated to Rs. 9,004,500 had agreed to look into the been temporarily abandoned as matter. Ministry of the Water Supply & Drainage Higher Board had increased the cost Education upto Rs.18,188,695.
3. Action had not been taken to 3. The Chairman of the UGC recover an amount of Rs. was directed to take action 117,530,741 due from 133 to recover these dues. lecturers who had breached agreements and bonds.
4. Number of audit queries had not 4. It was directed to answer been answered these queries without further delay.
May 05 , 1. The Annual reports for 2008 and 1. It was agreed to table them 2011 2009 had not been tabled. by 19th May, 2011.
National Institute of 2. The Action plan had not been 2. It was agreed to submit the Library & prepared in accordance with the revised plans within two Information Corporate plan. months time. Science
Ministry of Higher Education May 06 , 2011 1. Rs. 1,208,989 had been paid for 1. It was directed to get the overtime exceeding the limit approval of the UGC for the Post allocated for the year 2006. excess amount. Graduate Institute of 2. There is a high rate of drop-outs Agriculture compared to the number of 2. The Committee was enrollments of students. informed that some students Ministry of give up the course after Higher completing the theory part Education as the research part has to be done on full time basis. Contd...
45 REPORT FROM THE COMMITTEE ON PUBLIC ENTERPRISES OF THE PARLIAMENT OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA ______
Date/Name of Major Issues & Problems Comments & Decisions of the Institute Identified the COPE & Ministry Post 3.Without following the 3. The Committee Graduate procurement guidelines emphasized the need of Institute of purchases exceeding Rs. 02 following correct Agriculture million had been made. procedures.
May 25 , 1. Rs. 16,606,331 had to be 1. The company had acted in a 2011 recovered from, the owner of the lethargic manner in the Company in 2003, and further, process of recovering the Kantale he had sold the vehicles dues and it was directed to Sugar belonged to the company. take early action to recover Industries the dues from the former Ltd. owner. 2. Action had not been taken to Ministry recover the lease payment 2. It was informed that the of State receivable for 7,286 acres from company had been closed Resources & the Agro Trading Lanka Private down and the owners had Enterprise Ltd. gone abroad. Development 3. Cabinet had decided to lease out its’ operations under long term 3. It was revealed that, the lease agreement or to have Govt. had already Govt/Private joint venture advertised to find out a business suitable investor and prepared guidelines to be issued to the bidders.
May 26 , 1. The Committee observed that 1. It was informed that they 2011 62% of the debtors out of the had been able to recover debtor balance, had been 50% of the debtors and that Atomic Government Institutions whereas the amount had been Energy the rest had been from the private reduced to 1 million. Authority sector.
Ministry of 2. It was observed that the 2. The Committee directed the Power & Corporate Plan prepared for the CAO/AO to revise the Energy period 2010-2014 had been Corporate Plan including incomplete. new goals and to prepare the Action Plan and the budget Contd... based on the Corporate Plan.
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Atomic 3. The Committee enquired about 3.The Committee was Energy the use of nuclear power as an informed that, it has been Authority alternate energy source in the planned to establish a Country. regulatory Council to look into the entire Nuclear Power Project.
June 07 , 1. SWOT analysis, the financial 1. The Committee directed the 2011 data and the future plans had not CAO/AO to look into these been included in the Corporate shortcomings when South Plan prepared for the period of preparing the Corporate Eastern 2006 – 2015 ( 10 years ), and Plan. University of also not updated. Sri Lanka 2. Annual Reports from the year 2. The CAO/AO accepted the Ministry of 1998 to 2004 and also 2006 to delay and stated that by now Higher 2010 had not been presented in all reports upto the year Education Parliament, whereas the 2005 2009 had been submitted to Annual Report had been the Cabinet for approval, presented in Parliament in and would take early action February 2009. to present them in Parliament and agreed to keep the Hon. Minister informed of this situation in order to get his assistance to get this expedited.
3. The Committee queried about 3. University had already held Audit & Management Committee 02 meetings for the year meetings. 2011, and agreed to hold the balance as had been prescribed before the end of the year.
4. The Committee enquired as to 4. The CAO/AO stated that why the vacancies in the due to the war situation at Academic and Non-Academic that time, the University had cadre had not been filled. a problem of obtaining proper resource personnel, but by now they had called for applications, and would Contd.. be able to recruit staff early.
47 REPORT FROM THE COMMITTEE ON PUBLIC ENTERPRISES OF THE PARLIAMENT OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA ______
Date/Name of Major Issues & Problems Comments & Decisions of the Institute Identified the COPE & Ministry 5. The Committee queried as to 5. The CAO/AO stated that why UGC approval had not been due to lack of staff, the obtained for Honorarium University had to pay those South payments amounting to Rs. allowances. The AO further Eastern 248,411/-. stated that at present they University of are obtaining approval from Sri Lanka the UGC for such payments.
6. University had violated 6. Directed to get advice from the University Act by giving the UGC to correct this promotions to lecturers who situation. had not completed Postgraduate degree within 8 years.
1.The Committee enquired about 1. Corporate plans had been the Corporate Plan prepared for the period2011- June 08, 2013. 2011
Distance 2. The Committee wanted a 2. It was informed that DLC Learning clarification regarding the setting was established under a Centre Ltd up of the Distance Learning World Bank Project in
Centre 2002,as per a loan Presidential agreement, Rs.142 million Secretariat treated as a grant and the balance Rs.32 million as a loan payable in 10 years.
June 10, 1. Delay in presenting annual 1. Annual reports including 2011 reports in Parliament. that for the year 2009, had already been sent to the Institute of Printers and action would be Biochemistry taken to table them in Molecular Parliament as early as Biology and possible. Biotechnology
2. It was further observed that the 2. The CAO/AO explained Ministry of institution had been behind the that non- availability of Higher target level as far as the number funds, lack of additional Education of students recruited for certain cadres and the setback courses were concerned. caused in setting up of courses had affected the number of students enrolled for each course.
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Date/Name of Major Issues & Problems Comments & Decisions of the Institute Identified the COPE & Ministry
June 21, 1. Corporate Plan prepared for the 1. Directed to update the 2011 period 2010-2015 had not been Corporate Plan and to send a updated. copy of the 2011 Action Eastern Plan to the Committee and University of to the Auditor General. Sri Lanka 2. It was observed that a barbed 2. It was informed that, the Ministry of wire fence had been erected officer in charge, the Rector Higher spending Rs.11,029,167 the had been interdicted and the Education approval to construct a parapet investigation was being wall with an allocation of Rs.10 conducted. million and further observed that an over payment of Rs.301,000/- had also been made.
3. The Committee questioned as to 3. The Committee stressed the why action had not been taken to fact that these lapses had inquire into the Direct Credit occurred as the bank Rs.5,704,648 , the Direct Debit reconciliation had not been Rs.4,952,914, the Unrealized properly and timely done. Deposit Rs.1,527,243 and the un- presented Cheques Rs.4,868,510
4. The Committee wanted a 4. A detailed list of lost items clarification whether action had had been submitted to the been taken either to recover or to Ministry for approval to write off the losses amounting to write off from the books. Rs.17,860, 815. The Committee directed the institute to obtain the treasury approval for this purpose.
5.The Committee observed that 28 5. The Committee directed the stationary items valued at CAO/AO to submit a report Rs.931,890 had been lying idle regarding this matter. for over 3 years.
6. The Committee noted that the 6. Rector concerned had been Contd... University had accepted a bid to interdicted and the construct a chain linked fence investigations were under which had been 83.6 % greater way. than the initial estimated cost of Rs.1,299,500 which had also been revised to Rs.1,881,600.
49 REPORT FROM THE COMMITTEE ON PUBLIC ENTERPRISES OF THE PARLIAMENT OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA ______
Date/Name of Major Issues & Problems Comments & Decisions of the Institute Identified the COPE & Ministry
7. Rs. 70,407,561 had to be 7. Only Rs. 7 million had been Eastern recovered due to breach of recovered. Legal action had University of agreements by the lecturers gone been taken after the lapse of Sri Lanka abroad on scholarships the prescribed time period.
8. Directed to see possibilities to convert the existing department of Hinduism to a Faculty.
June 22 , 1. The Committee noted that Rs.6 1. Directed to get the 2011 million had been invested in Treasury approval. 2009, by the institution without Institute of the treasury approval. Human 2. It was brought to the notice Resource 2. It was observed by the of the Committee that these Advancement Committee that it had been machines were being used. unable to make use of the two Ministry of finger printing machines since Higher 2008 purchased at the cost of Education Rs.330,155. 3.Directed the UGC to submit 3.Quality assurance of the degree a report indicating the programmes & courses methodology to be adopted to conducted by the Institution was assure the quality of the questioned. courses within a week.
June 23, 1. The Committee queried the 1. It was informed that the 2011 present position of the Institute. Institution was transformed to University of National Technology. Institute of 2. The Committee queried about Technical the delay in presentation of 2. Action would be taken to Education annual reports for the year 2008 present both the reports in and 2009. Parliament very early.
Ministry of 3.The Committee observed that the 3. The Committee was Youth Affairs institute had not taken action to informed that action would & Skills acquire the assets amounting to be taken to acquire these Development Rs.12,368,579/- purchased for assets very early. the NORAD project and also an Infinitive Digital Solvent Printer amounting to Rs.1.2 million had Contd.. been included externally to the objectives.
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4. The Committee enquired whether 4.The Committee was any action had been taken to informed that on the National recover Rs.1,148,772/- due from favourable decision given by Institute of the lecturers who had vacated the courts against 02 Technical posts and also Rs.200,884 from officers, the institution had Education the officers who had not started recovering due submitted the certificates after amounts. completion of various courses.
5. The Committee noted that a 5. It was brought to the notice receivable amount of Rs.4.9 of the Committee that they million had been continuously had written to the Treasury brought forward since 2005 for approval to write off this without being recovered. amount.
6. The Committee observed that 6. It was revealed that Rs.85,000/- had been spent Secretary to the Ministry monthly as the rental for the had been occupying this official residence of the Vice – residence as the Chairman Chancellor, where the official of the Board. residence of the institute had been rented out to a Ministerial Officer for Rs.4146/-.per month
June 24, 1. The Committee questioned as to 1. The Committee directed to 2011 why certain fixed assets written send a report on this matter off to the worth of within 03 months time. Post Rs.29,014,191 had been re-used Graduate without being revalued and taken Institute of into accounts . Science 2. The Committee noted that a sum 2. The Committee directed the Ministry of of Rs.111,716,670 had been CAO/ AO to get the existing Higher invested by the Institute without regulations changed in order Education obtaining the approval. to make the activities of Universities a success.
3.Number of PhDs & Master 3.The Committee appreciates degrees offered by the Institution the situation. had gone up by the year 2010.
51 REPORT FROM THE COMMITTEE ON PUBLIC ENTERPRISES OF THE PARLIAMENT OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA ______
Date/Name of Major Issues & Problems Comments & Decisions of the Institute Identified the COPE & Ministry July 05 ,2011
National 1. The Committee observed that a 1. The Committee pointed out Centre for sum of Rs.9,290, 674 had been the importance of amending Advanced granted to 7 lecturers not related the act if necessary to cater Studies in to the field of Humanities and to the other fields as well. Humanities Social Sciences, contrary to the and Social objectives of the Centre. Sciences
Ministry of Higher Education
1. According to the Income 1. Following information were Statement, expenditure of the called for; Cricket Board had been increased July 06 ,2011 by 524% when compared to the (i)Expenditure on promoting & year 2009. Following reasons were pool of cricketers from 24 – 100 November given. 18, 2011 (i) Spent more money on the matches (ii)How many of them had played by the A team and under 19 selected to National Team Sri Lanka team, (iii)How many has signed Cricket (ii) Having increased the National pool agreement with the Cricket Board, Ministry of up to 100 players and provided them Sports with necessary facilities, (iv)Details of 30 female (iii) Action taken to promote female cricketers with expenditure. cricket pool. 2. It was informed that, 2. The Committee queried whether Signing has been delayed, the National players signed although the agreements had agreements with the Board. been forwarded to the Players Association. But however they are of the view that cricketers are bound to play, even if the main agreement lapses for a
period of six months.
3. It was questioned that, how the Contd... contract for construction of 3. Directed to provide initial Hambantota- Suriyawewa ground documents prepared by the given to Sri Lanka Ports Authority. respective Architectural As per the CAO/AO, SLPA has the Company. necessary equipment for the construction work.
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Date/Name of Major Issues & Problems Comments & Decisions of the Institute Identified the COPE & Ministry 4. The Committee questioned as to 4. According to the CAO, such why, without renovating the a decision was taken as the existing ground at Dambulla, Dambulla ground was the only Sri Lanka decision taken to construct a new available ground to play 15 Cricket ground in Hambantota. day and night matches at that time. 5. The Theft of compact disk 5. It was informed that. there had containing the accounts of World been no impact on the Cup was questioned. information as they had back up
6. The Committee was 6. The selection of World Cup informed that, although there Director (Tournament Director) was no scheme of recruitment, was questioned. having consulted the experts
in the field, the present
director was selected.
7. Replied that to pay the 7. Following shortcomings/ liability, they have applied the weaknesses were observed. loan from the Bank of Ceylon. (i) Total liabilities being and the ICC would pay the Rs. 6.1 billion, with the due amount when audited total assets were only expenses are forwarded Rs. 3.1 billion The Committee directed to (ii) Requesting of a loan send a report including income from the Bank of and expenditure of the Board Ceylon from the year 2009 to date. (iii)Income receivable from
the ICC not yet being
recovered
8. The Committee questioned how 8. The Committee’s concern the M/s Summerset Entertainment was giving telecasting right to Venture was selected as telecaster M/s Carlton Sports Network of Sri Lanka Premier League by M/s Summerset Matches (SLPL). Entertainment Venture. It was informed, that has been done
after obtaining 05 bids having Following information were advertised in the Web site. requested by the Committee;
(i) The tender procedure that Contd... was followed in regard to the
selection of M/s Summerset
Entertainment Venture,
(ii) Board of Directors and
Shareholders of the
Summerset Entertainment
Venture,
53 REPORT FROM THE COMMITTEE ON PUBLIC ENTERPRISES OF THE PARLIAMENT OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA ______
Date/Name of Major Issues & Problems Comments & Decisions of the Institute Identified the COPE & Ministry (iii) The date on which this company had been registered in Singapore, Sri Lanka (iv) A detailed report on the Cricket Carlton Sports Network and the relationship between these two companies, (v) Previous tournaments that had been telecast by these two companies, and their experience in this field.
The dissatisfaction of the Committee was expressed on offering the tender to an organization in which the Secretary of the Cricket Board was functioning as the CEO.
9. The Committee queried as to 9. It was revealed that on a how the contracts were given to the Cabinet decision, the companies. (Sooriyawewa) Hambantota ground was given to Sri Lanka Ports Authority, and other two to the State Engineering Corporation. It was brought to the notice of the Committee that the total loan obtained by the Board had been Rs. 22.5 million.
10. Payment of Rs. 650,000/- to 10. It was revealed that this some officers was questioned. amount had been paid to some officers for doing a good job in the Australian tour, on approval of the interim committee. Directed to send a list of names of them.
11. Directed to submit the 11. The Committee questioned as to agreement signed between the how, the agreement entered into SL Cricket & the Southern Contd... between the Cricket Board and the Provincial Cricket Galle Municipal Council had been Association. terminated and now the
maintenance of the stadium is done
by the Southern Provincial Cricket
Association.
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Sri Lanka 12. In contrary to the tender 12. It was revealed that on the Cricket document, the agreement signed approval of the Interim between the Sri Lanka Cricket and Committee, chairman and the Summerset Entertainment CEO had signed the Venture, a separate clause had been agreement. Having questioned entered, i.e. the sponsor had a right about the nature of the bank to sell the team for a further 25 guarantee, directed the CAO years’. Enquired when there is no to discus with the Hon. track record what was the rational Minister in this regard and to offer the tender to Summerset submit a report. Entertainment. The Committee was of the opinion that disciplinary action should be taken against the persons involved in this transaction.
13. It was noted by the Committee 13. The former CEO stated that either a Corporate Plan or an that the Institute had never Action Plan had not been prepared such documents prepared by the Sri Lanka earlier. And it was further Cricket. stated that the Corporate Plan newly prepared for the period 2011-2015 and the Action Plan would be tabled before the Committee on this day itself.
14. The Committee observed that 14. The Committee directed the Sri Lanka Cricket had paid the CAO/AO to submit Rs.1,460,000 to SLIDA for an following details to the assessment of Cadre , in which Committee. case the following shortcomings • A copy of the report of were noted. the SLIDA approved • Acceptable procedure for by the Sri Lanka promotion not being Cricket. introduced. • Letter of instructions • Salary structure and age received from the Hon. limit for each post not being Minister to obtain the included services of SLIDA in Contd... • Proposal to increase the the cadre requirement present cadre 267 up to 727 • A report on the 18 in 2013 without any personnel who are above justification for expansion 55 years with their of work names, designations and salaries & incentives.
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15.The Committee noted that 47 15. Although the officials of employees had been recruited in the former Board stated that Sri Lanka 2010 and most of them did not have the selection had been done Cricket the basic qualifications and following the scheme of experience relevant to the particular recruitment, the committee post having observed that there had been certain instances where the scheme of recruitment had not been followed, directed to submit the following documents to the Committee within a month’s time.
• The paper advertisement which the posts had been advertised in. • 38 and 45 applications received for the posts of HR Executive and the Data Entry Operator respectively with the finding of the interviews held.
16. The Committee observed that 16. The Committee directed the initial estimate for the officials of the Cricket construction of the 03 Board to submit a detail report playgrounds Hambanthota, with regard to the price Pallekele & Kettarama had been escalation and all other Rs.3.3 billion where the total relevant information to the expenditure had been Rs.7.18 Committee of these 03 play billion grounds.
17. It was reported to the 17. Independence of the audit Committee of certain instances needs to be maintained. where the requested information had not provided with to the Auditor General. July 08 , 2011 1. The Committee observed that 1. The CAO/AO was directed Buddhasraw- the Annual Report for the year to take early action to table aka Bhiksu 2009 had not been tabled in that in Parliament. University Parliament.
Contd…. 2. It was observed that the 2. Directed to submit the
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Date/Name of Major Issues & Problems Comments & Decisions of the Institute Identified the COPE & Ministry Estimated Balance Sheet as at the aforesaid statement within Buddhasraw- end of the year and the Estimated two weeks time to the aka Bhiksu Cash Flow statement had not Committee. University been included in the Budget as per the Circular No. PED/12.
Ministry of 3. The Committee enquired as to 3. As the CAO /AO stated Higher why action had not been taken to that there had been a Education recover Rs.1,998,417/- the balance of Rs.252,200/- amount in respect of surety for and Rs.555,257/- foreign travels and other respectively to be agreements, from the 02 trainee recovered from those two lecturers whose service had been lecturers and the legal terminated. assistance of the Attorney –General’s Dept had been sought for this purpose, the Committee directed the CAO /AO to submit a report on the action taken in this regard to the Committee. 1. It was observed that the Annual 1. The Committee directed the July 07th Report for the year 2009 had not CAO/AO to take early 2011 been presented in Parliament. action to table the same in Parliament. Sri Lanka Foundation 2. The Committee observed that the 2. The CAO/AO stated that by out of total amount of Rs.43.9 now the Institute had Presidential million received as Capital utilized balance funds to Secretariat Grants for the period of 2006- purchase equipments and the 2010, only Rs.39.1 million had delay was due to tender been utilized. procedure.
3. The Committee enquired as to 3. It was brought to the notice why the investments of the of the Committee that due to Institute had gradually been cut the situation prevailing in down. the country and also the grants received from the Treasury had gradually been cut down the Institute had to use these investments for essential expenses.
4. The Committee observed that the 4. The Committee was vision and the objectives indicated informed that at a discussion Contd.. in the Corporate Plan had been had with H.E. the President contradictory to those specified in it had been decided to
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Date/Name of Major Issues & Problems Comments & Decisions of the Institute Identified the COPE & Ministry the Sri Lanka Foundation Act. amend the Act accordingly.
5. The Committee observed that a 5. As the CAO/ AO explained Sri Lanka tender valued at Rs.18.74 that on a ministerial Tender Foundation million had been awarded for Board decision the contract construction of the Head Office was awarded and due to the and as the proposed land had contract being terminated in been taken over by the UDA and 2004, the institute took a the contract also had been decision to execute the terminated, the mobilization Bank Guarantee in which advance of Rs.3.4 million could case the contractor had not be recovered. obtained an injunction order and had filed a case, the Committee directed to submit a report on this matter.
July 19, 2011 1. In the Corporate Plan prepared 1. The Committee directed for the period of 2010 – 2014, the the CAO/AO to get this Institute of main components had not been process expedited. Fundamental included and it had not been Studies approved by the Board of Directors. Ministry of Technology 2. The fixed assets valued at Rs. 2. It was stated that a & Research 371,946,503/- had become zero Committee had been as at December 2011, where appointed to re-value those action had not been taken to assets, and it is under revalue and account for those process. assets in terms of SL Accounting Standards No. 18.
August 09, 1. The Committee observed that a 2. As the CAO/AO stated that 2011 loan of Rs.340 million had been the loan approved to M/s. granted to M/s. International International Grocers Bank of Grocers Alliance. Alliance, possessing 40% of Ceylon the shares of the Sathosa Retail Company had been Ministry of given by a cheque to the Finance & General Treasury to pay half Planning the value of the above
shares. the Committee directed the CAO/AO to submit a report on the whole issue to the Committee.
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2. The Committee observed that 2. The CAO/AO stated that Bank had granted Rs. 150 million only Rs. 24 million had been Bank of to Mahinda Offset Printers as a loan settled by M/s. Mahinda Ceylon Offset Printers and
informed the Committee that they had taken several measures to strengthen the Credit management and Recovery management to reduce such kind of risks in 3. The Committee noted that the future.
Bank had granted loans to six 3. The CAO/AO stated that private companies without any some of these companies adequate securities and the were involved in apparel outstanding balance of those industry, and some had gone loans as at 31.5.2011 had been under liquidation, and that US $ 0.899 million ( Rs. 90 the Bank would take legal million), and enquired about the action to recover the due current position. balances. 4. The Committee questioned with regard to a loss of Rs. 33.9 million in connection with 4. The CAO/AO stated that robbed articles in Badulla the initial loss had been Rs. Branch. 83.9 million, and that the Bank received 50% from the Insurance Company, and the loss had been reduced to Rs. 33.9 million and also stated that the Police had been able to trace 17.9 kilos of gold, and that by selling those gold, the Bank could cover their loss, but the gold was still under the Police custody. 5. The Committee observed that 40 advance payments had been 5. The CAO/AO stated that granted by 8 branches, where a the Bank was closely single installment had not been monitoring, and that already paid, and the outstanding balance most of the loans had been as at 31.12.2009 had been Rs. re-scheduled, and would Contd... 1,283 million. take early action to recover
the dues.
59 REPORT FROM THE COMMITTEE ON PUBLIC ENTERPRISES OF THE PARLIAMENT OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA ______
Date/Name of Major Issues & Problems Comments & Decisions of the Institute Identified the COPE & Ministry 6. Rs. 100 million overdraft granted to Omega International 6. Bank would re-schedule the Bank of pvt ltd. against a mortgage O/D. Ceylon property and present outstanding amount is Rs. 103.31 million. The O/D had been granted within one day which is doughtful.
7. Payment of PAYE tax on behalf 7. It was informed that, this of the employees by the Bank. cannot be stopped due to unrest of the employees.
8. Granting leasing facilities of Rs. 44 million to 09 branches without 8. As per the CAO this leasing obtaining any collateral. facility was to purchase excavators and those excavators themselves are collateral. 9. Non performing loans amounting to Rs. 2,286,948,763/- and non 9. According to the CAO, performing overdrafts amounting Bank is negotiating with the to Rs. 653,078,128/- given to 10 customers. & 15 customers respectively. 10. BOC had granted a loan of Rs. 3.2 million to the Sri Lanka Cricket.
11. Card Centre-Rs. 52 & 44 millions had been written off and 11. Now a special unit has waived off respectively. been set up to look into the credit card transaction.
August 10 , 1. The Committee observed that the 1. Directed to prepare the 2011 Corporate Plan for the period Corporate Plan as explained 2008 – 2012 had not been by the Committee National prepared as per the PED Circular Institute of No. 12, and informed that the Education responsibilities had not been fixed as per the goals of the Ministry of Institute, and also the previous Finance & and future forecast data had not Planning been included in the Corporate Plan.
2. The Committee questioned as to 2. It was informed that the Contd… why the 2009 Annual Report had 2009 Annual Report had not been presented in Parliament. been submitted to the
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Date/Name of Major Issues & Problems Comments & Decisions of the Institute Identified the COPE & Ministry Cabinet for approval, and once it is approved, action would be taken to table the 2009 Annual Report in National Parliament without further Institute of delay. Education 3. The Committee observed the 3. As per the explanation there following shortcomings of the had been change of NIE and enquired the reasons. syllabuses from Grade 1 to Grade 13 in the year 2010, i. Operating expenses for the year training of teacher advisors 2010 , increased when compared and also 8000 un-trained with 2009. teachers had been trained in the year 2010, where the ii Development Centre Charges and expenses of the Institute had Workshop charges increased increased. iii. The deficit as at 2010 had been Rs. 48.5 million
4. The Committee observed that a 4. A Committee had been digital camera and a video appointed to inquire into this camera worth of Rs. 29,950 and matter and the relevant Rs. 95,000 respectively had been report had already been misplaced in the Planning prepared. Division of the NIE.
. August 11 , 1. The Committee observed the 2011 following shortcomings in the Internal Audit Section. (a) The Committee directed People’s (a)The post of Chief Internal the CAO / AO to re arrange Bank Auditor had been placed under the organizational chart the Senior Deputy Manager in placing the post of Internal Ministry of the organizational structure, Auditor in the correct Finance & whereas it should have been position Planning placed under the Chief Executive officer of the Bank. (b)it was revealed that the post had not been vacant for (b)The post of Chief Internal a long time, and when the Auditor had been vacant for a post fell vacant, the Deputy long time. Internal Auditor was promoted to that post on acting basis within a period Contd… of only 04 months.
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Date/Name of Major Issues & Problems Comments & Decisions of the Institute Identified the COPE & Ministry 2. As per the directive given at the 2. As per the Cabinet decision, last COPE meeting held on this property had been People’s 09.05.2007, the Committee handed over to the Sri Lanka Bank enquired the current position with Army, and that the Bank had regard to a property of the been informed that the Veytex, which had presently Ministry of Lands would been transferred to the People’s pay the value of this Bank. property amounting to Rs. 315 million to the People’s Bank.
3. The Committee observed an 3. At present the Bank had unidentified balance of Rs. been able to recover a large 4,451,811 as at December 2008 amount and the balance due, in the current account maintained could be recovered before by the Card Centre. the end of 2011. The Committee observed that card centre of the People’s Bank had not shown a
progress as that of the other Banks.
4. The Committee enquired the 4 The CAO/AO stated that, current position with regard to this amount had been the outstanding amount of reduced to Rs. 120 million, Rs.467.42 million due from the out of which Rs. 61 million Ceylinco Group of Companies. is to be re-scheduled.
1. The Committee observed that the 1. The Committee directed the August 25 , 2009 Annual Report had not been CAO/AO to send a report with 2011 presented in Parliament. regard to the 2007, 2008 & 2009 Annual Reports to the Sri Lanka Committee, indicating the date Bureau of of submission to the Ministry,
Foreign Cabinet, and Parliament, etc. Employment 2. The Committee noted that there 2. All the vacancies in key have been a number of vacancies Ministry of to be filled in the key posts of the posts had already been filled. Foreign bureau. Employment
Promotion 3. The Committee observed the 3. The Committee directed the and Welfare following shortcomings in the CAO/AO to report on this Foreign Employment Agency and to discuss with the Company (Pvt) Ltd, a subsidiary Hon.Minister with regard to company of the Foreign the necessasity to continue Employment Bureau. with this agency. Contd...
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i.The private auditors had disclaimed the accounts for the
Sri Lanka years 2007, 2008, & 2009 of this Agency. Bureau of Foreign ii.The financial statements for the Employment years 2009 & 2010 of the
subsidiary company had not been
consolidated with the financial statements of the Bureau, iii.The Bureau had invested Rs. 5 million in the share capital since 1997, and only Rs. 1,380,000 had been received in return for the years 2006/2007. 4. The Committee directed the 4..The Committee having observed CAO/AO to submit the that a payment of Rs. 2 million relevant information too, to had been made in 2009 to the Sri the Committee with copy to Lanka Foreign Employment Auditor General. Agency, by the Bureau, without the approval of the Cabinet.
5. The Committee observed that a 5. The CAO/AO was directed to Co-ordinator had been appointed submit a detailed report to the for the Korean language Training Auditor-General on the Programme, and paid a sum of appointment of this person, Rs. 882,337 as salaries & and the Auditor-General would allowances and other perks, make his observations and
without the approval of the Dept. send it to the Committee. of Management Services. 6. The Committee enquired as to 6. The Committee directed why the staff of the Examinations the CAO/AO to explain Dept., and the staff of the Bureau the position to the Auditor- who worked with the holding of General. Korean Language proficiency exams had been paid Rs. 8,036,590 and Rs. 1,971,650 respectively, in the year 2008.
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Date/Name of Major Issues & Problems Comments & Decisions of the Institute Identified the COPE & Ministry
August 23 , 1. The Committee queried about the 1. According to the 2011 tabling of Annual Report. CAO/AO, 2007 Annual Report had been prepared at Ceylon the correct time but the Petroleum Attorney General had Corporation advised the Corporation not to publish the report, until Ministry of the 02 Supreme court cases Petroleum and the foreign arbitration Industries would be finalized and that the 2009 Annual Report had also been drafted,the Committee enquired whether the Corporation had any documentary proof from the Attorney General in this regard and directed the CAO to discuss this matter with the Attorney General and to obtain a clarification in writing and also to submit a report to the Committee in this regard.
2. The Committee queried as to 2. As the CAO/AO stated that
why the vacancies had not been they need to take action to
filled. restructure the cadre revising the salary scales, the Committee directed the CAO/AO to submit their proposals with all
suggestion to the Treasury for approval.
3. As the Treasury 3. The Committee observed that Representative, informed the there had been a large amount of Committee that the Cabinet outstanding debtor balances due had decided to grant a bond of to be recovered by the Rs. 60 billion to the Corporation from various Corporation to cover the debtor institutions, and also Bank balances from the CEB and other Govt. entities, the Guarantees had not been obtained Committee directed the from those institutions. CAO/AO to take action to obtain Bank Guarantees Contd... whenever essential.
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4. The Committee observed that Ceylon there had been some transactions 4. The Committee directed the Petroleum taken place with some foreign CAO/AO to continue with Corporation companies. them having entered into agreements.
August 24 , 1) The Committee observed that the 1) It was informed that the 2011 Annual Reports for the years 2008 & 2009 Annual 2008 & 2009 had not been Reports had been prepared State Timber presented in Parliament, and also and submitted to the Corporation. the Procurement Plan had not Cabinet for approval. been prepared by the Ministry of Corporation.. Environment 2) The committee enquired the 2) As the CAO/AO stated that current position about the they had been informed by Investment of Rs. 30 Million the Attorney General that with a Private Company. there had been no evidence to file a criminal case against this Company, and that now they are in the process of filing a civil case against this company, and all documents relating to this agreement had been submitted to the Attorney General’s Dept. Having had a lengthy discussion, the Committee directed the CAO/AO to submit a detailed report with regard to this private company to the Committee within 2 weeks time.
3). The Committee queried about 3). The Treasury not obtaining written approval Representative informed to write off Rs. 14.4 million the Committee that there is Contd... worth of Debtors no special guideline to instruct any Govt. Enterprise to send the details of their debtor balances to the Treasury for the approval to write off. It
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Date/Name of Major Issues & Problems Comments & Decisions of the Institute Identified the COPE & Ministry was also stated that at present the Treasury was having continuous discussions to have a policy State Timber decision with regard to Corporation. these matters, and a circular to this effect would be issued in due course. . 4). The Committee observed that 4). Due to some problems in there had been a loss of Rs. 11 their financial system, these million and 29 million losses had been indicated, respectively for the years 2007 and after analyzing and & 2008. identifying the errors, the loss had decreased gradually.
5) The Committee observed that the 5) The Committee directed the Corporate Plan for the period CAO/AO to update the 2008 -2012 had not been Corporate Plan accordingly prepared as per the PED/12 and the targets expected to be achieved yearly had not included in the Corporate Plan.
6) The Committee noted that only 6) The Committee directed the the objective with regard to sale CAO/AO to take action to of timber had been included in include all the objectives as the Action Plan. per the Corporate Plan
7) Public Trustee Dept. had 7). The Committee observed that agreed to settle this amount the Corporation had granted an on installment basis, out of interest free loan of Rs. 2 million the funds collected by in the year 1988 to the them. Kataragama Astaphala Fund and the outstanding balance as at 30.06.2011 had been Rs. 1,115,000.
Contd... 8) The Committee enquired as to why 8). As the CAO/AO stated that action had not been taken by the as this British Company Corporation to recover Rs. 11.87 was no longer in existence million receivable from a private in Sri Lanka, they had no company, since 1983. way to recover this amount,
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Date/Name of Major Issues & Problems Comments & Decisions of the Institute Identified the COPE & Ministry the Committee directed the CAO/AO to write to the British High Commission and find out some information about this company, and also to discuss with the Auditor- General and to see as to State Timber what action they could take Corporation. to write off this amount.
9) The Committee observed that the 9) Since the CAO/AO stated Corporation had selected a that this decision had been contractor to construct 12 taken by the then Chairman stocking sheds without any of the Corporation, without evaluation by the Technical the knowledge of the Evaluation Committee, and also General Manager, the the tender had not been offered Committee wanted the to the lowest tenderer, thereby CAO to make aware of the Corporation had incurred a such malpractices to the loss of Rs. 580,896. Hon. Minister.
10. The vehicle, bearing the No.65- 10. The CAO/AO was directed 4013, taken away by a former to keep H.E.the president as minister, had not been returned well as the Hon. Minister although several reminders were informed of this matter and sent. also to lodge an entry in the Police in this regard.
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August 26 , 1. As per the accounts of the Water 1. Up to 30th June, 2011, the 2011 Board, the total outstanding Water Board had paid Rs. amount due to be paid to the 1,100 million to the National Treasury as at 31st December, Treasury and the Board had Water 2010 had been Rs. 5.4 billion. come to an agreement with Supply & the treasury to pay Rs. 200 Drainage million annually to settle Board. outstanding amount.
Ministry of 2. The percentage of Non Revenue 2. It was stated that the Water Water Water (NRW) had been 33% in Board had taken action to Supply & the year 2010, wanted the replace the pipe lines in Drainage CAO/AO to see whether they order to arrest this situation could reduce the NRW to an acceptable level, by which, the Water Board could reduce its loss.
3. An unidentified balance of Rs. 3. On several occasions, the 1,179,693,016 had been shown Water Board had made in accounts since 1994, and in attempts to reconcile these addition, an unidentified amount balances, but due to non- of Rs. 119 million had been availability of the relevant disclosed in the year 2010. documents, they had failed to complete this task. With regard to Rs. 119 million balances as at year 2010, the CAO/AO stated that out of 110 accounts, 61 accounts had been reconciled by now.
4. The Water Board has only 04 4. The Committee directed professionally qualified the CAO/AO to submit a Accountants, and the rest of the report on staff vacancies officers engaged in the and the recruitment accounting task were from the procedures to the promoted staff. Committee.
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September 07 1. An outstanding balance of Rs. 1. The Treasury 2011 52 billion had been due to the Representative informed & CPC and that amount had been the Committee that the October 17 taken over by the Treasury. Cabinet had agreed to grant 2011 a bond of Rs. 50.9 billion to CPC through the Bank of Ceylon Ceylon, and that the Electricity Treasury had taken over Board this liability.
Ministry of 2. Only 02 Audit & Management 2. A large scale public Power & Committee meetings each had enterprises, like CEB Energy been held in the years 2010 & should hold Audit & 2011. Management Committee meetings at least once a month.
3. 4,644 man power had been 3. It was stated that as and outsourced by the CEB in a when they require persons situation where there are 2161 for urgent work, they obtain vacancies. services from the private companies.
4. The directive dated 18.03.2009, 4. The CAO had requested the given by the COPE, to take a Attorney General to decision on Mr.Caldera reconsider his opinion considering the previous inquiry providing more information report and the ruling of the and the Attorney General Attorney General, had not been had accepted that the implemented decision taken by the Board of directors to exonerate Mr. Caldera from the charges is legal.
5. Proper documentation had not 5. It was directed to submit been maintained by the CEB in proper evidence to the audit respect of the transformers as well as the Committee handed over to the Lanka within two weeks time. Transformers Ltd., either for repairs or to be condemned and details of transformers to be Contd... returned to CEB by LTL.
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Ceylon 6. The liquidated damages of Rs. 6. This issue had arisen due to Electricity 41.7 million had not been confusion with regard to the Board recovered by the CEB from the due date of the open cycle IPP firm which had failed to operation and in the end, achieve the open cycle operation the board had decided that on the due date. the due date had not lapsed by then as an extension of two months had been given. The Committee directed to submit the Board decision within 2 weeks time to the Committee.
7. The CEB had invested a sum of 7. It was stated that, 8% Rs. 628,002,640 for purchase of returns on revalued assets shares of LECO Ltd., but no are required to declare dividends had been declared by dividends, as per the loan the Company for the years 2002, agreement with Asian 2003, 2007 & 2008. Development Bank and this target had not been achieved by LECO for the last few years.
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Date/Name of Major Issues & Problems Comments & Decisions of the Institute Identified the COPE & Ministry 1) The Committee observed that 1).As the CAO/AO stated that September 09 the Corporate Plan prepared for there had been a delay, but , 2011 the period 2011 – 2015 had not after obtaining Board been submitted to the relevant approval in march 2011, it National authorities. had been submitted to the Transport line Ministry, Auditor- Commission General’s Dept. and the Treasury with the Action
Ministry of Plan. and that the Corporate Private Plan had been submitted to Transport the Auditor-General’s Dept. Services on 28.07.2011. the Committee directed the CAO to look into this
matter and report back.
2). The Committee observed that 2) 2008 & 2009 Annual the Annual Reports for 2008, Reports had already been 2009 and 2010 had not been submitted to the Cabinet, tabled in Parliament. and action would be taken to table 2008 & 2009 Annual Reports in Parliament early and agreed to table the Annual Reports from 2010 in Parliament before the prescribed period of time
3) The Committee observed that the 3) Due to the matter that the Commission had spent Rs. 20 projects had been continued million exceeding the provisions to the following year, this granted by the Treasury in the money had been utilized for year 2009 to carry out 05 that particular year’s projects, out of which Rs.13 projects and agreed to see million had been recorded in an that such shortcomings in accrued account without accounts would not occur in considering that amount as an future expenditure of the projects in 2010. 4) It was informed that, in 4) The Committee noted that due to certain projects log sheets reconciliation had not been done, were received after about 2 differences of Rs. 3.2 million, months on the completion Rs. 1.8 million and Rs. 6.9 of projects, so that these Contd... million in the years 2008, 2009 amounts had been carried and 2010 respectively had been forward for the following shown in the accounts. year
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National Transport 5) The Committee observed that 5) The Committee directed the Commission Rs. 17.696 million and Rs. CAO/AO to obtain 147.696 million had been covering approval from the invested in the fixed deposits respective parties as early without the concurrence of the as possible. Hon. Minister of Finance and the approval of the Minister in charge
September 1. Annual reports for the years of 1. It was directed to table them 20, 2011 2008 and 2009 are yet to be as early as possible. tabled. Water 2. It was directed to get the 2. A sum of Rs.3,285,640 had been Resources assistance of the spent to carry out the Board commissioner of Lands and improvements of the temporary obtain the title deeds. building situated on a land Ministry of without securing the legal title of Irrigation & the land. Water Rresources 3. Rs. 204,547 had been paid to a 3. It was informed that there Management retired officer as a surcharge for was no fund in the account the delay in the payment of to pay his gratuity at the gratuity. time of his retirement.
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Date/Name of Major Issues & Problems Comments & Decisions of the Institute Identified the COPE & Ministry 1. The amount to be recovered from 1. It was informed that every lecturers due to breach of possible action is taken to September agreements is Rs.105 million. recover the dues. 21, 2011 2. There are 173 unanswered audit 2. It was directed to send University of queries out of 287 audit queries replies without further Perdeniya issued for the period from 2008 delay. to 2011. Ministry of 3. The allowance had been 3. Rs. 31,494,765 had been paid as Higher paid in contrary to the language proficiency allowance. Eduacation circulars. 4. Rs.12,383,503 had been paid for 3 lecturers to follow a post 4. It was directed to hold an graduate diploma which had not inquiry against the officers been completed by these three responsible for this lecturers and moreover, an payment and also to recover amount of Rs.1,058,048 had the paid amount. been paid as salaries although they had been on No-Pay leave.
5. A temporary lecturer had been 5. It was stated that an inquiry paid a sum of Rs.1,231,905 is being conducted. without obtaining a security bond and this lecturer had not reported to the University after studies in overseas. 6. The same supplier had 6. A stock of furniture worth of under took to deliver items Rs.12,613,263 and in good conditions without Rs.16,220,542 for the Ivor any additional charges. Jennings Hostel and this stock is not upto the standards. 7. A professor had obtained salaries 7. Action has been taken to and allowances from the recover the additional university as well as from three amounts paid. other institutions amounting to Rs.2,046,016 and Rs.1,493,000 for the same period.
8. A payment of Rs. 500,000 had 8. It was stated that the been paid as consultancy charges construction work will be to the State Engineering started once the allocation Corporation without entering is released from the into an agreement where the Treasury. construction work is yet to be started.
73 REPORT FROM THE COMMITTEE ON PUBLIC ENTERPRISES OF THE PARLIAMENT OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA ______
Date/Name of Major Issues & Problems Comments & Decisions of the Institute Identified the COPE & Ministry September 1. There is a delay in tabling 1. It was agreed to table the 22, 2011 Annual reports in parliament. outstanding reports at earliest. Sri Lanka 2. The number of employees are Transport around 34,000 whereas the 2. The Committee was Board number of busses in operation informed that action is are 5225. being taken to increase the Ministry of number of busses up to
Transport 6000 by the end of 2011. 3. Although the revenue of the 3. This is due to non control of board has increased, the the expenditure and expenditure also had increased directed to pay attention on drastically. this matter.
4. Rs.14,178,548 had been paid 4. It was revealed that the over during the period from 2005 to draft facility was obtained 2010 for issuing cheques without to pay salaries and agreed considering the liquidity. to refrain from obtaining OD facilities in future.
5. There is a loss of Rs. 5 million 5. It was agreed to take action per year due to unlimited leaves to rectify the matter. obtained by drivers and conductors.
6. There was an outstanding of 6. It was stated that action is Rs.11,397,657 due from 5 depots being taken to recover the for special transport hires and dues. Rs.124,809,177 from the Ministry of Disaster and Relief Services for providing busses for the transport of refugees. 7. A case had been filed 7. The board had received neither against the person. the rent nor the shop even after the lapse of the leased period by leasing a shop at Pettah.
September 1. Annual reports for the years of 1. It was directed to table them 23, 2011 2008 and 2009 had not been as early as possible. Geological tabled. Survey & 2. It was informed that the Mines 2. Fixed assets had not been revaluation process is under Bureau revalued and accounted. way.
3. Action has not been taken to Ministry of 3. It was informed that the report the damages caused to 7 Environment action has been taken to motor vehicles in 10 instances,
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Date/Name of Major Issues & Problems Comments & Decisions of the Institute Identified the COPE & Ministry Contd.. to the Auditor General in terms furnish these details to of Financial Regulations. Audit. Geological Survey & 4. The accounts of the Geological 4. It was stated that action Mines Survey and Mines company would be taken accordingly Bureau established by the company had to correct the issue. not been shown. 1. Out of the estimated total 1. It was informed that a Consultancy fees of Rs.978 decision has been taken to millions, in the construction of develop the Gall port as a October 06, the Galle Port, a sum of Rs.455.5 commercial/leisure port 2011 millions had been incurred up to without damaging the the end of 2008 and due to the preliminary plans as the Sri Lanka delay in other works on Hambanthota Port is being Ports construction contract, the constructed as a good Authority consultancy service had been handling port. suspended temporarily at the Ministry of moment. Ports & Aviation 2. As far as the information 2. It was informed that a provided with regard to each decision has been taken to port including their location, develop most of the other funding agency, and funding ports as commercial/leisure mode i.e: loan or grant, it was ports to overcome these observed that the authority had losses. to bear an unbearable foreign exchange loans of which the foreign exchange rates changes rapidly and except for the Colombo Port, most of the other ports were running at a loss. 3. It was stated that the 3. The present actual carder of the authority had not recruited authority is 11,067 out of which staff for the Hambanthota 9700 are employed in Colombo. but as and when necessary, the staff is being released to Hambanthota.
4. According to an agreement 4. It was informed that the entered into between the Authority has no other Authority and the South Asian alternative other than Gateway Terminal, the paying these taxes for 35 Authority had paid an indirect years from the year 1999,as Contd... taxes amounting to per the agreement, although Rs.284,402,724 for a period of the shortcoming had been 11 years. identified.
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Date/Name of Major Issues & Problems Comments & Decisions of the Institute Identified the COPE & Ministry
5. An expenditure of Rs.9,292,676 5. The Committee was had been incurred on carrying informed that this had been out repairs to the official formerly, the official Sri Lanka quarters of a former deputy quarters of the former Dy. Ports minister who had no connection Minister & that they had Authority with the Authority. written to the Ministry of Public Administration to reimburse this expenditure.
6. The maintenance of the Gall 6. It was informed that a trade Face Green is provided by the union in the Authority had Sri Lanka Ports Authority where been collecting money from a private party had been allowed the users of the premises to collect money from the users and it is used for the of the premises. welfare of the staff.
7. The debtor balance of shipping 7. It was directed to recover agents as at 30.08.2011 had been the possible balances which Rs.1,595,139,778. are within the credit period and to write off the rest with necessary approval.
8. There is a recoverable rent 8. It was stated that all income of Rs.93,403,172 as at necessary action has been 31.08.2011 of which Rs. taken to recover this 55,517,194 had been remaining amount. for more than 5 years.
9. Two cranes purchased at a cost 9. A suitable track had been of Rs.444 million in the year built at the moment. 2008 had been idling even by 30.06.2010.
10. In the Oluwil Nautical Training 10. The Committee was Institute, the number of students informed that it is expected following the courses was less to implement some courses than 20 although a staff of 102 after the completion of had been deployed for the construction work of the purpose. Oluwil Port.
11. Sri Lanka Ports Authority had Contd… engaged in several controversial 11. It was informed that the construction work including Authority had involved Suriya Wewa Cricket stadium with these construction and the Ceremonial Hall at the works upon Cabinet Araliyagaha Mandiraya. decisions and for the
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Date/Name of Major Issues & Problems Comments & Decisions of the Institute Identified the COPE & Ministry construction of the Cricket ground Sri Lanka cricket Sri Lanka had paid Rs.1200 million so Ports far and for the Ceremonial Authority hall, Rs.11.9 million had been reimbursed out of the total expenditure of Rs.35 million.
1. The Corporate plan for the period 1. It was directed to revise the 2011-2015 contains number of Corporate plan. shortcomings.
October 12, 2. 26 motor vehicles had been 2. The matter had been 2011 obtained on hire basis for a referred to the Bribery & period of four years making an Corruption commission. Development advance payment of Rs. 24 Lotteries million contrary to the FR and Board without the concurrence of the Ministry. Ministry of Finance & 3. Without following the 3. It has been informed that Planning procurement procedure, 14,075 T the said transaction had shirts had been purchased. taken place during the previous management.
4. The building in Union Place 4. The Committee was which was purchased for Rs.421 informed that the board million remains closed down for occupied in the new three years and the office of the building in 2008. board had been maintaining in a leased building paying Rs. 16.1 million as the rent.
5. Rs. 276,673,546/- had been 5. It was informed that this invested in Treasury Bills and action had been taken with Fix deposits in 21 instances in a view to earning an 2008 without the approval of the interest. Ministry.
6. The procument procedure of the 6. The Committee was Government had not been informed that this had Contd... applied in connection with the happened during the promotional expenditure of previous management. Rs.17,750,000/- incurred in the year 2009.
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Date/Name of Major Issues & Problems Comments & Decisions of the Institute Identified the COPE & Ministry
7. The Committee was 7. A sum of Rs. 6,339,148/- had informed that this practice Development been paid to officers as the is in existence for a long Lotteries Attendance and Transport time. Board Allowance without the Treasury approval. 8. It was directed to write off 8. A loss of Rs.624,633/- had been this amount with the incurred due to the failure to necessary approval. encash the Tax Reserve Certificates within 03 years. 9. It was informed that, as per 9. The procument guide lines had the Cabinet decision, the not been followed in selecting a tenderer who produced the service provider for the printing lowest tender was selected of lottery tickets and had to enter into an agreement incurred an expense of Rs. 75 till 2012. million .
October 12, 2011 1. Even though the COPE had 1. It was stated that a sub directed not to market mineral committee had been Lanka sands without offering tenders, appointed to check the Mineral 15,750 MT of Ilmenite at US$ variances in the World Sands Ltd. 100.74 per MT and 445 MT of Market. The Committee Rutile at US$ 846.65 per MT directed to submit separate Ministry of had been sold to the previous reports by the Internal State buyer without calling for Auditor and the Institution. Resources & tenders. By that time, the market Enterprise price of Ilmenite and Rutile Development amounted to US$ 311 and US$ 1776 per MT respectively and as such the estimated loss amounted to Rs.408,835,843/-
2. It was observed that there are 2. It was directed to get the three officers including the Cabinet approval. General Manager who are above 60 years.
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Date/Name of Major Issues & Problems Comments & Decisions of the Institute Identified the COPE & Ministry October 13, 2011 1. The Committee was 1. There are 27 vacancies in the informed that the approved approved carder of 223. National cadre has been revised and Building that the new cadre is 273 Research and further it was Organization mentioned that the organization had been Ministry of confronted with a financial Disaster problem to fill all the Management vacancies.
October 14, 1. The institution had not prepared 1. It was agreed to do the 2011 combined financial statements amalgamation once the and instead three financial ambiguity with regard to Air Port & statements are prepared. the ownership of certain Aviation lands is cleared. Services Ltd.
Ministry of Civil 2. Rs.17,691,195 had been paid as 2. It was agreed to submit a Aviation interest due to the delays report on the land experienced in the land acquisition process. acquisition process during the last two years.
3. The company had not paid the 3. The treasury was directed to dues this year which had to be send all the particulars with paid for the loans obtained. regard to those outstanding amounts and informed the CAO/AO to send a reply once those particulars are sent by the treasury. October 18, 1. The following irregularities were 1. It was directed to submit a 2011 reported regarding the buildings report on the abandoned owned by the Authority. buildings and the others. Mahaweli Authority a) 180 buildings had been abandoned without carrying out Ministry of any repairs. Irrigation & b) 204 buildings and official Water residences remain idle in 03 Resources regions. Management
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Date/Name of Major Issues & Problems Comments & Decisions of the Institute Identified the COPE & Ministry c) 200 and 193 official residences Contd... in Walawa and Welikanda respectively had been used by unauthorized parties.
Mahaweli 2. The lease installments amounting 2. It was informed that the Authority to Rs.1,185,400 recoverable prescribed period for any from the Venture Capital (Pvt) legal action has been lapsed company had not been recovered as these loans are dated and the self employment loans back to more than 10 years granted to private parties and the Venture Capital amounting to Rs.7,412,353 had Company is also under been outstanding. liquidation. Therefore, the Committee directed to write
off these amounts if there is no way of recovering.
3. It can not be satisfied with the 3. It was directed to obtain the way the Authority had leased out rentals as per the agreement the lands for telecommunication for fixing of the posts and posts and moreover, the rentals not for the land value. It for those transactions had not was also directed to submit been obtained. a report on the lands including the number of lands leased out for this purpose island wide and the parties to which these lands had been leased out and also the copies of the agreements with the amount obtained for each post.
4. Eight vehicles belonging to the 4. It was stated that one Ministry had been taken out by vehicle had been received the Hon. Ministers when their out of the eight vehicles. portfolios have been changed.
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Date/Name of Major Issues & Problems Comments & Decisions of the Institute Identified the COPE & Ministry October 19, 1. The difference between the 1. Although it was stated that 2011 balances shown in the financial those balances had been statements and those appearing reconciled by now, the Sri Lanka in the relevant ledger accounts is Committee directed to State Rs.4,125,534,243. submit a report indicating Plantations as to how these balances Corporation had been reconciled.
Ministry of 2. The lease rent amounting to 2. Almost half of the due State Rs.8.5 million remains un- amount is from Sri Lanka Resources & recovered from 6 institutions as Broadcasting Corporation. Enterprise at 30.09.2011. Development October 19, 2011 1. Internal audit of the institute is 1. It was directed to establish carried out by an external audit an internal audit unit from National firm. the institute once the Lotteries contracted period with the Board private firm is over.
Ministry of 2. A large amount of money had 2. It was directed to submit a Finance been spent for modernization on breakdown of the a rented building and for the expenditure. three years from 2008 to 2010, the amount spent had been Rs.8,123,348.
3. The total debtor balance as at 3. It was informed that every 30.09.2011 is Rs.207 million. possible action is being taken to recover the debts.
4. The loss incurred by the board 4. The board had not received upon the investment in the On any dividend by this line National Lottery Company investment. had been Rs.983 million and that amount has been written off from the books upon a cabinet decision.
5. Advances amounting to Rs.29 5. It was directed to submit the million which exceeds the 20% names of the advertising of the contract amount had been firms and the amount paid to Contd... granted as mobilization advance each firm from year 2009 to and it is a violation of the 2011. Government procurement guidelines.
81 REPORT FROM THE COMMITTEE ON PUBLIC ENTERPRISES OF THE PARLIAMENT OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA ______
Date/Name of Major Issues & Problems Comments & Decisions of the Institute Identified the COPE & Ministry National 6. When printing the lottery tickets, the 6. The answer of the CAO was Lotteries board gets 50% of the tickets that giving the quota only Board printed by the State Printing to one printer would create Corporation and the rest is printed a monopoly. by a private company.
October 20, 1. No Annual report has come 1. It was directed to table the 2011 before the Parliament after 2005. outstanding reports before the commencement of the University of Budget. Ruhuna 2. Out of the 175 audit queries 2. It was directed to reply all (Ministry of issued since 2000, 112 queries the audit queries with copies Higher still remain unanswered. to the Committee. Education) 3. The Corporate plan prepared for 3. It was agreed to take the period 2011-2015 had not necessary action at been approved by the Council earliest. . 4. It was observed that the 4. It was stated that there are following assets had been idling. some problems regarding the generator and the land. a) 312 KW generator It was further mentioned that it was not economical b) 62 acres out of the Gam Udawa to use the mobile Clinic, grounds belonging to the faculty received during the of agriculture. ( valued at Rs.184 Tsunami Period and million) therefore the institute is c) Mobile Clinic valued at US $ willing to donate it to any 450,000 institution willing to make d) Stock of medical equipment use of it. received as a donation. 5. The construction work has 5. The construction of the examination come to a standstill as the hall had been abandoned after first and the second spending Rs. 377,770. contractors had abandoned work but now, the contract
had been awarded to
CECB.
6. It was revealed that these 6. Nine research projects had been research projects had been abandoned after spending Rs. abandoned as some of the 1,388,590. members of the academic
Contd... staff had gone overseas
abandoning the projects.
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Date/Name of Major Issues & Problems Comments & Decisions of the Institute Identified the COPE & Ministry 7. Since it was mentioned that University of 7. The Internet Protocol Telephone there was a problem with Ruhuna System installed spending Rs. regard to the brand and its 4,375,678 had not been used for obsolete condition, the the said purpose so far. Committee directed to submit a comprehensive report on this matter.
October 20, 1. Annual reports for the years of 1. It was directed to table all 2011 2008, 2009 and 2010 had not the outstanding reports as been tabled. early as possible. University of Kelaniya 2. There are 254 vacancies. 2. It was informed that the institute is in the process of Ministry of filling the vacancies. Higher Education 3. Due to number of accounting 3. It was directed to discuss deficiencies, the audit opinion for this issue with the Auditor the 2010 had been disclaimed. General and take action to correct it. October 21, 1. Audit & Management Committee 1. This is essential for the 2011 meetings had not been held for going concern of the Sri Lanka the year 2011. institution. Institute of Development 2. Fully depreciated non- current 2. The institution had not Administrati assets which are in use, had not followed to the SLAS 18. on been revalued and brought to Ministry of accounts. Public Administrati on & Home Affairs
October 21, 1. It was directed to pay 2011 1. The Auditor General had attention on the SLA expressed a disclaimer opinion standards when preparing Land on the financial statements for accounts, large amount of Reforms number of years. unsettled balances, Commission unrecognized lands
acquired by the
Presidential Commission and the non
Secretariat moving debtor balance of
Rs. 2,140,531,267 remained
Contd... over a period exceeding 8
years.
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Date/Name of Major Issues & Problems Comments & Decisions of the Institute Identified the COPE & Ministry
2. According to a judgment of the 2.The appeal made against the Supreme Court on a case filed former verdict had also on non allocation of the been defeated and the Land minimum of the land for the land institute has to pay this Reforms lord on land taken over by the amount to the particular Commission Government, a sum of Rs. party with interest. 148,715,363/- had to be paid to the plaintiff.
3. Contrary to the circular of 3. It was informed that these Government lands, there had shortcomings had been been cases where the lease corrected by now. agreements had not been entered into, non-cancellation of lease agreements following the breach of conditions and defaulting of payments and not renewing lease agreements.
4. It was observed that a 15 acres 4. The Government is land in Mirigama had been deprived of obtaining a leased out for a period of 50 large income due to the years subject to lease rent of failure in reviewing the Rs.7,000,000/- and as per the lease agreement and it was conditions laid down in the directed to submit a copy of agreement entered into in 1995, the agreement with the the institute can not either cancel recommendations of the or take any step on this matter. legal officer and a list of such lands that had been leased out to private parties.
5. A three acre land in Homagama 5. The Committee was had been leased out to a private informed that the party had party without entering into a agreed to settle this amount lease agreement and the amount in installments and by then to be recovered from the party is Rs. 17 lakhs had been Rs.2,430,311/- recovered.
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Date/Name of Major Issues & Problems Comments & Decisions of the Institute Identified the COPE & Ministry October 24, 2011 1. Rs. 3.1 million mobilization 1. It was informed that the Sri Lanka advances relating to the Corporation has written to Land Beddagana Project remains the Judicial Services Reclamation unsettled for over 5 years. Commission in this regard. Development 2. A cost of Rs.22,329,882/- Corporation 2. The said amount had been incurred for two projects had not written off from the 2010 been recovered from the relevant Ministry of accounts. Pradeshiya Sabhas although Defence several attempts were made.
3. The Corporation had sustained a 3. It was revealed that the total loss of Rs. 28 million in the Mayura place construction projects related to Mayura Place, project had been abandoned Tewatte and Bere Lake. due to lack of funds and the Tewatta Project had brought a loss due to the changes made on the original plan. The loss related to the Bere Lake project is due to the non settlement of payments by the Ports Authority for the additional work carried out.
4. According to the present Act, the 4. It is recommended to amend provisions available to stop the Act to get the necessary filling of lands are limited. authority.
5. In a situation where there is an 5. It was informed that the amount of Rs.9,964,782 due Corporation had taken from the Land Reclamation and action to recover this Development company, another amount. advance of Rs. 2,054,249 had been paid to the same company to start another project.
October 24, 1. The Annual reports are not tabled 1. It was directed to table the 2011 by the company in Parliament annual reports in and the CAO stated that they are Parliament. Lanka not expected to do so other than Logistics Ltd. sending to the Treasury.
Ministry of 2. There is a recoverable amount of 2. Requests had been made to Defence Rs.1,219 million from armed settle the dues. forces.
85 REPORT FROM THE COMMITTEE ON PUBLIC ENTERPRISES OF THE PARLIAMENT OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA ______
Date/Name of Major Issues & Problems Comments & Decisions of the Institute Identified the COPE & Ministry 1. Annual reports for the period 1. It was directed to take early October 24, from 2007-2010 had not been action to table them before 2011 tabled. the commencement of the budget. Urban Development 2. It was agreed to submit a 2. The ongoing 65000 housing units Authority revised corporate plan project in the Colombo city had including this project as not been included in the well. Corporate plan for the period
2008-2012. Ministry of Defence 3. An excess staff was observed in 3. It was directed to revise the some grades whereas vacancies carder paying the attention in some grades. to the salaries of the professionals when the carder is revised by the Dept. of Management Services. 4. The accumulated loss as at the end of 2007 is 4. The Committee was Rs.1,110,213,520/- informed that this amount had come down to Rs.143 million in 2010 after recovering the receivables.
5. Public tenders had not been 5. The recipients had been called for the sale of houses at selected by a Committee Dematagoda Housing Scheme appointed by the Ministry and the capability of the in addition to the displaced recipients for payment has not people and according to the been ascertained and as such, a CAO, the recovery has sum of Rs.80,496,000/- was due been delayed due to the from recipients. delay caused in issuing deeds.
6. A sum of Rs.8,909,035/- had 6. It was stated that action has been due from 24 lessees of the been taken to recover the old world market shell. outstanding amounts.
7. An un-recovered rent income 7. It was directed to take Contd.. amounting to Rs.615,775,883 action to recover the are due from the Colombo amount that could be Central Super Market Complex. recovered and, with the necessary approval, to write off the rest.
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Urban 8. 43.9 perches had been sold by 8. A detailed report was called Development the Sri Lanka Land Reclamation in. Authority and Development Corporation without obtaining the approval of the UDA.
October 25, 1. There was an outstanding sum of 1. This transaction is in 2011 Rs. 36.4 million recoverable contrary to the objectives of from an Australian company ,but the authority and it was Southern due to a time bar , it stays directed to submit a Development unrecoverable to date . detailed report including Authority the persons responsible in taking a decision to operate Ministry of a television network and to Economic submit the final report of Development the Bribery & Corruption Commission given with regard to Mr. Ruwan Kasiwatte, the director who was in charge of the project..
2. As per the minutes of the 2. It was directed to write to previous COPE meeting, a sum the Ministry and get this of Rs. 6,694,450/- had been paid amount reimbursed. as salaries to 10 employees released to the Ministry of Nation Building & Estate Infrastructure.
3. The Kirala Kela project which 3. All the persons, contributed consumed Rs.7,113,104/- had to take this collective been a fruitless project. decision must be penalized.
4. Although, Rs.13,607,115/- had 4. It was directed to submit a been deposited with different report on the acquisition of divisional secretaries for lands. acquisition of lands, no effective action has been taken even upto 2010.
Contd... 5. The Kohila Vagura Project in the 5. Such a situation had arisen Karandeniya electorate had been as the Authority is acting in abandoned after spending Rs. contrary to its objectives. 5,627,923/-
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Date/Name of Major Issues & Problems Comments & Decisions of the Institute Identified the COPE & Ministry
6. The expenditure of Rs. 6. It was informed that the 10,539,989 incurred due to land legal action had been taken Southern acquisition, had become fruitless against the Ministry of Development as the planned projects had not Fisheries and the Laugh Authority been implemented yet. Gas company responsible for the non-implementation of the projects.
7. A sum of Rs.450,725/- had been 7. It was directed to recover paid to the former Coordinator the amount from the even after he had left office. Coordinator and to report to the Committee.
8. No dividends had been received 8. It was directed to submit a for the amount of Rs.43.888 detailed report of this million invested in the Venture company including the capital. current monetary position. October 25, 1. There is a large number of 1. It was directed to do an 2011 vacancies. assessment before filling the vacancies. Samurdhi 2. In the Fruit Export Project at 2. It was directed to hold an Authority Galgamuwa, Rs.4.7 million internal inquiry against the cheque had been written in persons involved in this favour of a particular person’s matter and report it to the Ministry of name, without writing it to the Committee. Economic name of the institution. Development 3. The Director board should 3. A loss of Rs.164 million had be made responsible for this been incurred by a leasing issue and directed to what programme where an agreement action could be taken had not been entered into with against the Board of the leasing company with regard Directors. to the leasing amounting to
Rs.230 million.
4. A sum of Rs.4,005,000/- had 4. These type of been defrauded by 19 members shortcomings had resulted of the staff of the Samurdhi due to the fact that the Bank, Nuwara Eliya by internal audit was not recording as payments made to strong enough. Contd... the beneficiaries.
5. The Wellawaya Samurdhi Maha 5. It was directed not to allow Samgam had invested any Maha Samgam to Rs.2,200,000/- in the Pramukha invest money in any Bank Bank which could not be without obtaining the recovered and a sum of approval of the Director
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Date/Name of Major Issues & Problems Comments & Decisions of the Institute Identified the COPE & Ministry Rs.14,785,000/- had been Board. Samurdhi defrauded by producing Authority fictitious fixed deposit certificates.
6. A sum of Rs.3,789,500/- had been obtained as loans by 23 6. The matter had been officers of the Padiyapelella referred to the CID and it Banku Sangam by introducing was directed to submit a fictitious names. report on this. 1. Some resources owned by the 1. It was directed to submit October 28, University had been idling for explanations for all such 2011 certain period of time. resources.
Wayamba 2. University had not credited 2. It was directed to take University money received for various action to correct the matter. courses to the University Fund in Ministry of terms of the University Act. Higher 3. The salaries and allowances had Education 3. It was directed to see that been paid to the academic staff the academics sign the without confirming the arrival and departure attendance. properly.
4. The recoverable amount due to 4. After deducting from the breach of agreement by a gratuity and provident fund, lecturer who had not returned to there is a balance of Rs.3 work after the completion of million where the studies had been Rs.3,193,898/- university had come to compromise to recover it in installments. October 28, 1. The Corporate plan prepared for 1. It was directed to revise the 2011 the period 2010-2015, contains plan. number of short comings. Post Graduate 2. Since the inception in1975, the 2. It was informed that the Institute of institute has been functioning in institute is in the process of Pali & a rented building and Rs. 40 finding a suitable place to Buddhist million had been paid as rent build the institution. from the year 1994 up to now. Ministry of The annual rent of the present Higher place is Rs.4,500,000/-. Education
Contd..
89 REPORT FROM THE COMMITTEE ON PUBLIC ENTERPRISES OF THE PARLIAMENT OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA ______
Date/Name of Major Issues & Problems Comments & Decisions of the Institute Identified the COPE & Ministry Post Graduate Institute of 3. It was mentioned that the 3. The Committee Pali & institute has only two old vehicles recommended the decision. Buddhist and that it is intended to purchase a van and a car with the money invested for that purpose.
October 31, 1. In comparison to year 2009, the 1. The reason for the decrease 2011 interest income in 2010 had had been due to the decreased by Rs.903,966,000/- investments made in National treasury bills or Treasury Savings Bank Bonds as per the Act.
Ministry of 2. The contribution to the 2. It was due to a policy Finance & consolidated fund, which had decision taken with the Planning been 94% in 2008, had reduced Treasury. to 49% by 2010.
3.The Branch at Chatham street had 3. It was stated that the Bank been vested in the Government is expecting that the due to security reasons and the compensation would be amount receivable as per the cost received by the of the land amounting to Government. Rs.34,600,000 is yet to be received.
4. The fraudulent cash withdrawls 4. It was directed to submit a as at 31.12.2010 amounted to detailed report on this. Rs. 19,836,607/- and adequate action has not been taken.
5. The External Security Service 5. The tenders had been called had been selected at a cost of under limited number of Rs.45 million without following quotations as some of the procurement guidelines. suppliers were omitted on the instructions of the Ministry of Defence.
6. Three loans amounting to Rs.12 6. It was directed to acquire million had been granted to a the land immediately. customer against a mortgaged Contd.. property which had been valued in three instances differently out
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Date/Name of Major Issues & Problems Comments & Decisions of the Institute Identified the COPE & Ministry of which the first valuation was National claimed to be very high Savings Bank according to the provincial valuer. But the bank had neglected the opinion of the valuer. 7. According to the CAO/AO, 7. Rs.2,351,520/- had been paid as the bank had planned to rent for building which had not construct a building in the been used even upto 30.09.2009. head office premises and as a result, some officers were to shift to the said building. But this move had got delayed due to the delay experienced in the construction work.
8. 866 Banking Assistants had been 8. It was stated that they were recruited without conducting recruited as per the scheme examinations. of recruitments. October 31, 1. Annual reports for the years of 1. The Committee directed to 2011 2009 and 2010 had not been table the reports as early as tabled. possible. Lankaputhra Development 2. The Bank doesn’t have a full 2. It was directed to discuss Bank time internal auditor. with the Treasury and take early action to fill the
Ministry of vacancies of the major
Finance & positions.
Planning 3. The Corporate plan contains 3. It was directed to revise the number of shortcomings. Corporate plan.
4. The opinion given on the 4. It was directed to submit the accounts by the Auditors is management letter of given unqualified. by the auditors.
5. Out of the total portfolio of 5. The Committee was Rs.2.3 billion, the non informed that most of the performing loans had been loans are now being settled. Rs.1.3 billion and the current
ratio had been 55% .
6. It can not be satisfied with the way Contd... the Bank had rescheduled some of 6. It was directed to submit a the loans given to customers and detailed report on these also on the action taken to recover outstanding. the loans.
91 REPORT FROM THE COMMITTEE ON PUBLIC ENTERPRISES OF THE PARLIAMENT OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA ______
Date/Name of Major Issues & Problems Comments & Decisions of the Institute Identified the COPE & Ministry i) Bettons Group of Companies – Rs. 300 million Lankaputhra ii) Eksath Dheewara Udana Thrift & Development Credit Co-op Society – Rs. 75 Bank million iii) Torana Music Distributors Ltd. – Rs. 21 million
iv) Nandana Auto Products (Pvt) Ltd. – Rs. 42 million 7. By the 2007 budget, Rs. 1000 million had been allocated for 7. It was directed to submit a re-structuring the garment report including the amount obtained by the Budget, factories and the recovery of the number of factories obtained loans granted out of this this facility, no of factories provision is not satisfactory. which had been restructured and the number of factories which had not settled the loans. October 31, 1. Key positions such as Registrar 1. It was directed to make the 2011 and Bursar remain vacant and no place more attractive so that qualified applicant had been more people may apply. University of found although it was advertised Sabaragamu 4 times. wa 2. A lady officer serving in the post 2. It was informed that the Ministry of of Computer Data Processing Police investigation is Higher Operator in the University has underway and the Education submitted a bogus educational Committee directed to certificate, but action has not submit a report within one been taken against her. month after the inquiry at the University level
3. It was directed to inform the 3. A senior lecturer who had been treated as a person vacated the post persons concerned, about in the University of Peradeniya has the unlawful action and not been recruited as a senior lecturer, to follow that in the future. contrary to the University Establishment Code.
4. A sum of Rs. 139,000 had been paid 4. The Committee directed in favour of a certain employee of to take early action against the University in their personal this person and report back names for hiring 03 buses to to the Committee within participate in the Annual general Meeting, of their Trade Union. But one month it had been confirmed that these Contd.. buses were engaged in their normal duties.
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Date/Name of Major Issues & Problems Comments & Decisions of the Institute Identified the COPE & Ministry 5. Four camping tents had been 5. It was directed to inform the purchased at a cost of Company that the matter is Rs.780,000/- for the Dept. of treated as finalized and that Tourist Management but these the retention money of 20 % University of tents had been impossible to be will be retained. Sabaragamu used due to the fact that the wa ground sheets had not been supplied. Tents had been utilized spreading polythene sheets.
November 1. The companies had claimed that 1. However, except, Maga 14, 2011 they do not come under the Neguma Road Construction purview of the COPE and as & Development Company , Road such, they are not supposed to the other two companies Development come for the examinations. had been present and the Authority & Further, there was an ambiguity matter related to the Maga as to whether the Maga Neguma formation of the companies Neguma companies were established was kept open to be Companies purely as per a cabinet decision. discussed. The CAO was also directed to clarify the Ministry of legal position on these three Ports & companies within three
Highways weeks.
2. It was stated that the Maga 2. The Committee directed to Neguma Companies are given submit a report on how projects without tenders only for much was given to the work in urgent nature and that it Maga Neguma companies does not exceed 5% of the total and other outside provision received from the companies with or without Government. tenders.
3. There were 89 vacancies in the 3. The Committee was carde of Engineers at the end of informed that , due to poor 2010. salaries paid , it is difficult to retain the engineers.
4. The deficit in the financial 4. This has happened as the statement of the Authority has RDA does more work amounted to Rs.7 billion. exceeding the provisions received from the Treasury.
93 REPORT FROM THE COMMITTEE ON PUBLIC ENTERPRISES OF THE PARLIAMENT OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA ______
Date/Name of Major Issues & Problems Comments & Decisions of the Institute Identified the COPE & Ministry 1. A contract has been awarded to 1. Bribery & Corruption November a private company at a cost of Commission had informed 15, 2011 Rs.22.2 million only to prepare that the investigations could the Corporate Plan which is not be carried out further Telecommuni behind quality. and the case is still under cation the investigations of the Regulatory CID. Commission 2. Only one Audit and 2. Being a large scale Presidential Management Committee institution, it should be held Secretariat meeting had been held for the at least 4 times a year. year 2010 and one for the year 2011 up to September.
3. The Development of 3. According to the CAO, Sri Telecommunication Tax Lanka Telecom pays amounted to Rs.6,672 million only1/3 of the above Tax to had been under paid by Sri the TRC and accordingly, Lanka Telecom during the Rs.995 million had been period from 03 March 2003 to received so far. 31 December 2010.
4. The total debtor balance as at 4. Non payments for the the end of the year is frequencies used by Rs.3,154,106,357/- where a various institutions had balance of Rs.254,714,539/- been the prominent reason had been remaining for the and it was stated that the period ranging from 02 to 19 institute does not expect to years. take action regarding the national institutions.
5. A vehicle valued at 5. Requests had been made to Rs.7,304,348/- belonging to get the vehicle back. TRC had been released to the Ministry of Posts and Telecommunication in the year 2005. 6. The Committee
6. Discussed the difficulties in emphasized the retaining the skilled staff due to requirement of poor salary scales. professional staff in TRC & was of the view that to facilitate such requirements professional training needs to be given.
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Appendix C
REPORT FROM THE COMMITTEE ON PUBLIC ENTERPRISES OF THE PARLIAMENT OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA ______
Appendix C
Major issues and Problems Discussed at the meetings of Sub Committee I (Finance) of Committee on Public Enterprises
Date/Name of Major Issues and Problems Comments by the COPE and Decisions Institution and Discussed Ministry
Sep. 13th 2010 1. The Corporate Plan has not been 1. All specified items in the Circular should prepared according to the guidelines be included when preparing the Corporate Institute of Policy provided in the Public Enterprises Plan. Studies Circular.
(Ministry of 2. Treasury approval has not been 2. As the Institution had already submitted it Technology & obtained for the Operating Manual. to the Treasury, immediate intervention of Research) Treasury is needed.
3. Audit Committee has not been 3. As the treasury representative has not been appointed nominated, it is required to appoint treasury representative very soon.
4. Receivables from two employees 4. As the two officers had been released to the released from the Institution had not treasury, this amount should be reimbursed been recovered. from the Treasury.
5. A foreign grant had been obtained 5. As the foreign grants should channel directly to the institution violating through the Department of External the State Accounts Circular No. Resources, this should be regularized. 30/94 of 20.04.1994.
6. Bonus had been paid to the staff 6. Approval of the Cabinet of Ministers, without obtaining the prior approval Ministry of Public Administration/ Treasury from the relevant authorities. needs to be taken as per the Public Enterprises Circular No. 95 of June 1994.
Sep. 14th 2010 1. Vacancies exist without being filled 1. The process of getting approval of for considerable period of time in the Salaries and Cadre Commission Local Loans & the Institution. needs to be expedited. Development Fund
(Ministry of Finance & 2. Loans that had been granted for the 2. Feasibility study should be done for each Planning) Projects in Certain Local Authorities project and should follow the guidelines of had not been recovered. the Institution providing grants.
3. Provision for bad debts had not been 3.It is required to keep a certain percentage as made when preparing accounts. provision for bad debts in future.
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Date/Name of Major Issues and Problems Comments by the COPE and Decisions Institution and Discussed Ministry
Sep. 16th 2010 1. Loans receivable from other 1. Board of Directors has the authority to Institutions had not been recovered. take a decision to accommodate the Superior Courts offices under the Ministry without a rent Complex Board of and take actions to recover dues from Management other institutions.
(Ministry of Justice) 2. Quarters had been provided to the 2. Approval of the Ministry of Public officers on rent free basis without Administration and the Treasury need to obtaining the prior approval. be taken.
3. Recurrent expenditure had been 3. A gratuity plan need to be prepared increased as the cost per employee and discuss with the Treasury to have had gone up due to salary increases separate provision for gratuity payments. and calculation of gratuity based on the last salary drawn by employees.
Sep. 16th 2010 1. A report has not been submitted as 1. A report should be submitted with per the directives given in the necessary details within 2 weeks. Sri Lanka Export previous Committee meeting Development Board regarding the expenditure incurred in “Rajarata Expo” Exhibition. (Ministry of Industries
& Commerce)
2. Rent has not been received from the 2. The CAO/AO agreed to take action to Trade Stalls operated in Chennai, recover the dues from Bank Guarantees, India. where receivables could not be recovered.
3. Lack of performances observed as 3. The CAO/AO agreed to submit a report several projects and activities had not regarding these shortcomings. been carried –out as planned.
96 REPORT FROM THE COMMITTEE ON PUBLIC ENTERPRISES OF THE PARLIAMENT OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA ______
Date/Name of Major Issues and Problems Comments by the COPE and Decisions Institution and Discussed Ministry
Sep. 16th 2010 1. Expected performance has not been 1. As figures reflected the low performances the achieved during the year 2009. reports should be updated with actual Sri Lanka Convention figures. Bureau 2. There had been an un -reconciled amount of Rs 19 million in the year (Ministry of Economic 2. A report should be submitted with all 2009. Development) categories within two weeks’ time.
3. Money has been invested in the call deposit without being obtained the 3.Process of obtaining the Treasury approval to concurrence of the Minister of keep the deposit should be expedited. Finance.
4. Incorrect accounting procedure has 4. This should be rectified in preparing been practiced in preparing of P & L accounts from next year onwards. account.
Sep. 17th 2010 1. Three officers who had visited India 1. The CAO/AO agreed to submit the reports on official matter had not submitted as per the Circular issued by the Ministry of Securities & the reports. Finance & Planning. Exchange Commission of Sri Lanka 2. A sum of Rs. 7.6 million has been 2. Treasury circulars need to be followed and incurred to pay bonus for the staff covering approval should be obtained for (Ministry of Finance & without paying attention to Treasury this. Planning) Circulars.
3. The CAO/AO agreed to re-think about the 3. Vehicle leasing facilities have been system and report to the Committee provided for the higher positions of regarding the action taken and employees the commission on contributory share made in respect of this. basis.
4. Huge amount of Rs. 25,922,288/- has 4. It is recommended that having their own been incurred as rental for the office office building and parking area would be a building and car parking fees. better solution.
5. Some reports necessary for auditing 5. The CAO/AO agreed to take immediate has not been provided for Auditor action to forward the said documents after General’s Department by the Internal receiving the list of required documents Auditors. from the Auditor General’s Department.
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Date/Name of Major Issues and Problems Comments by the COPE and Decisions Institution and Discussed Ministry
Sep. 17th 2010 1. The Corporate Plan for the Year 1. It is recommended to update Corporate Plan 2007-2011 and Action Plan has and Action Plan as a rolling plan. Tower Hall Theater been prepared, but not updated. Foundation
(Ministry of National 2. Staff has been recruited in excess to 2. As the new recruitment scheme has been Heritage & Cultural the approved cadre. already submitted for Treasury approval, Affairs) regularization process should be done soon.
3. Annual Reports for the years of 2006 3. Annual reports need to be presented to the and 2008 has not been presented to Parliament very early. the Parliament.
4. An Accountant who was under 4. Since the preliminary inquiry has not been interdiction for 2002-2005, and was conducted within three months the Labour on compulsory leave since March Tribunal has directed to do the payments. 2009 had been paid salaries. Therefore preliminary inquiry should be conducted without further delay.
5. Internal construction and the 5. The institution should confine its activities consultancy services have been to the objectives laid down at the time of carried out in contrary to the establishment. objectives of the Institution.
6. 10% allowance of the profit has been 6. The Treasury was directed to look into the paid to the Project Manager, who matter. also in charge of the contract, without prior approval from the Treasury.
7. The commemoration Ceremony had 7. It is recommended to hold the not been held of the late Commemoration Ceremony in a suitable Mr. Ranasinghe Premadasa, the manner. founder of the Tower Hall Theater on st 01 May.
8. Consultancy services had been 8. Action should be taken to obtain the provided by the institution for the ownership of the building in consultation programmes in a Building located in with the Hon. Prime Minister & the Western the ‘Race Course’ which is owned by Provincial Council. the Western Provincial Council.
98 REPORT FROM THE COMMITTEE ON PUBLIC ENTERPRISES OF THE PARLIAMENT OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA ______
Date/Name of Major Issues and Problems Comments by the COPE and Decisions Institution and Discussed Ministry 1. Annual Reports have not been 1. The CAO/AO agreed to submit 2009 Annual Sep. 17th 2010 presented to the Parliament since Report to the Parliament within two weeks’ 2005. time. Annual Reports from 2005-2008 Sri Lanka Institute of should also be sent to the COPE within a Local Governance week. Procedures should be followed to table all the reports to the Parliament. (Ministry of Local
Government & Provincial Councils) 2. Three members have not been 2. It is required to get those members appointed to the Governing Council. nominated very soon with the consultation of the Hon. Minister.
3. There was a delay in conducting 3. The CAO/AO agreed to hold the Audit and Audit and Management Committee Management Committee meetings without meetings. further delay.
4. Due to delay in construction, the land 4. The immediate action is needed to owned by the UDA had been sold to regularize the situation. another party by the UDA, which was initially agreed to purchase by this institution at Rs. 15 million. As cancellation fee of the contract entered in to, the UDA had charged Rs. 1.3 million and the balance had been invested in fixed deposits without obtaining the required approval.
5. Stock of books which are not relevant 5. Action should be taken to donate the books to the Provincial Councils has been to libraries of the Local government purchased incurring a considerable Institutions after valuation and Action cost. Taken Report should be submitted to the Committee. The CAO/AO agreed that approval of the Governing Council would be obtained to purchase books in future.
6. There were shortcomings in 6. More attention should be paid to include real preparing estimates for the training estimates for the programmes in preparing courses and as such expenditures Corporate Plan. were not compatible with the allocations made.
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Date/Name of Major Issues and Problems Comments by the COPE and Decisions Institution and Discussed Ministry
Sep. 21st 2010 1. Appointment of Board members had 1. Early action is needed to appoint all been delayed and Board meetings members for the Board and to conduct Sri Lanka Accounting have not been held in time. Board meetings. & Auditing Standards Monitoring Board 2. Internal Audit has not been carried 2. It is recommended to carry out Internal out either by the Institute or Internal Audit functions through the Internal Audit (Ministry of Finance & Audit Division of the Ministry. Division of the Ministry. Planning) 3. Corporate plan has not been prepared 3.The CAO/AO agreed to submit the revised according to the guidelines provided Corporate Plan after finalizing. in the Public Enterprises Circular.
4. Low level of performances has been 4.The Committee emphasized the necessity of observed in relation to the reviewing continuous reporting of the activities of the of annual reports of the institutions. large institutions to the COPE and it is agreed to seriously consider this matter in the main COPE meeting.
5. Actions have not been taken 5. Since there is no provision to impose a against the institutions that have penalty in the existing law, it is emphasized not provided annual financial the necessity of amending the existing law. statements to the AG’s Department.
6. A representative of Sri Lanka 6. The view has been appreciated by the Chartered Accountants expressed the Committee and agreed to give directives to willingness of their members to chair the Treasury after being discussed in the the Audit Committees of Main Committee. Government institutions.
Dec. 08th 2010 1. Corporate Plan has not been updated 1. It is recommended to include Projects and Action Plan has not been connected with the “Gama Naguma” in the Udarata Development prepared based on the Corporate new Corporate Plans and Action Plans to Authority Plan. avoid implementation of programmes in haphazard manner. (Ministry of Economic Development)
2. Annual Report for the year 2009 has 2. The CAO/AO agreed to take early action to
not been presented in the Parliament. present the Annual Report for the year 2009. Contd.
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Date/Name of Major Issues and Problems Comments by the COPE and Decisions Institution and Discussed Ministry 3. Some of the vehicles belonging to 3. As these vehicles belong to the Ministry the Udarata Development the Authority have not been CAO agreed to look into the matter and Authority registered under the name of the report to the Committee within two weeks. Authority.
4. A payment of Rs. 2.5 million has 4. It was directed to carry out an inquiry been made for the earth work regarding this and report to the Committee connected with the construction of within one month. Ambuluwawa Concrete Road, which has been covered under another contract.
5. The Committee seriously enquired 5. The Committee directed the CAO/AO to the following failed projects in send detailed explanation to the Committee which a lot of malpractices had regarding these matters. been occurred.
i. AmbuluwawaGanetanna Road
construction
ii. Hakurutale, Hanguranketha soap production project
iii. Construction of marketing and information centre at Badulla
iv. Construction of two water tanks at Dankanda-Dambagolla
v. Collapse of construction wall at children’s park, Pilimatalawa.
vi. Construction work of Kathapallana anicut abandoned halfway.
vii. A retired officer earning two salaries working in two government institutions.
viii. Loss of Rs. 1.3 million due to overpayment in purchasing roofing sheets, not compatible with the specifications required.
Contd.
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Date/Name of Major Issues and Problems Comments by the COPE and Decisions Institution and Discussed Ministry ix. Providing mobile phones to the Udarata Development officers on contract basis resulting Authority a recoverable amount of Rs. 39, 478/- from 4 terminated officers.
x.Opening of a bank account without obtaining approval from treasury in which balance was Rs. 47 million.
1. A difference between the VAT 1. The Committee pointed out that the amounts Dec. 08th 2010 refund receivables and Tax return should be claimed within the stipulated time amounts in the accounts of the period. The written confirmation from the Sri Lanka Tourism Bureau has been observed. Department of Inland Revenue need to be Promotion Bureau taken and should send copies to the Committee and the Auditor General. (Ministry of Economic
Development) 2. Differences in the accounts of 2. As the CAO stated that the accounts has
SLTPB and Sri Lanka Tourism been adjusted and books have been then
Development Authority (SLTDA) reconciled, the Committee needed an
has not been reconciled. explanation as to how this adjustment has
been made.
3. Foreign and local advances given to 3. Since it is mentioned that 80% has already officers have not been recovered. been recovered, immediate steps should be taken to recover the balance.
4. A huge sum of money incurred in 4. As it is explained that the amount is not a Hikkaduwa Beach Festival has not due from any party, but the difference been recovered from the respective between income and expenditure, sponsors. particulars with regard to the income and expenditure for each year of the said project need to be sent for the reference of the Committee. The amounts should be written off from the accounts with the approval of
Treasury and the Director Board
5. A project named Small Miracle 5. Further explanation regarding this should be Branding Programme has been submitted to the Committee within two abandoned after spending huge sum days. of money.
Contd.
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Date/Name of Major Issues and Problems Comments by the COPE and Decisions Institution and Discussed Ministry Sri Lanka Tourism 6. It has been observed that huge sum of 6. Complete report should be submitted to the Promotion Bureau money has been spent in IFFA film Committee soon after the internal audit has festival. been completed.
th 1. Post of Finance Manager has been 1. The post should be re-advertised and fill the Dec. 09 2010 filled without following the correct vacancy according to the correct procedure. procedures. It is recommended to fill all the Industrial vacancies existing and report back to the Development Board Committee within two months. (Ministry of Traditional Industries and Small 2. Annual Reports have not been tabled 2. Prompt action should be taken to present the Enterprise to the Parliament in time. Annual reports to the Parliament. Development)
3. Number of audit queries has been 3. Adequate attention should be paid by the unattended to over the years. Institution to answer audit queries without delay in the future and Internal Auditor of the Ministry should look into this matter.
4. A Generator purchased to the Board 4. Detailed report should be submitted to the has been sold out without being used Committee regarding this within two incurring a lost. months.
5. The CAO/AO agreed to submit a report 5. It is observed that electrical power within two weeks after distributing them potter wheels have not been among eligible members. distributed properly among members of a co-operative society.
6. Neither the money nor the materials 6. A report should be submitted to the has been received from the Sri Lanka Committee regarding the outstanding Customs and Handicrafts Board after balances within one month. payment is being made.
7. It is required to send explanations to the 7. Lack of evidence to ensure the Committee. receipt of cash in transactions made
with large scale industrialists is
observed.
8. Proper reconciliation has not been 8. As the explanation given has been rejected done in relation to seven bank by the Committee the CAO/AO agreed to accounts. reconcile them when preparing final accounts for the year 2010. Contd.
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Date/Name of Major Issues and Problems Comments by the COPE and Decisions Institution and Discussed Ministry Industrial 9. The Institute has being running at a 9. Serious concern should be paid to minimize Development Board loss over the years and explanations the loss and detailed report regarding the given with respect to the Auditor audit observations should be submitted after Generals observations were not calling the explanations for each and every satisfactory. query from the relevant parties.
th 1. The Corporate Plan for the period 1. Since the new Corporate Plan for the period Dec. 09 2010 of 2008-2010 had not been of 2011- 2013 had been already drafted, the prepared as per the guidelines of CAO agreed to address the shortcomings Insurance Board of the Public Enterprises Circular. pointed out by the Committee in that Sri Lanka report. (Ministry of Finance & 2. Since it is stated that the 2009 accounts had Planning) 2. It is observed that the internal been drafted, the Committee directed the Audit Reports had not been CAO to submit the same after finalizing submitted to the Auditor General. without further delay.
3. The Committee noted that there 3. It was stated that until the new Act being had been vacancies in the cadre passed recruitment had been delayed. including the post of Director However the committee directed the CAO General. to fill the vacancy of Director General early.
4. The Committee observed that 4. The CAO was directed to take early action to proper mechanism for third party streamline the mechanism. insurance claims does not exist.
5. The Board has violated the PED 5. The CAO agreed to obtain the Treasury circular No. 95 of 1984 by granting approval for all the payments. more than one allowance per year and paying medical expenses and
festival advances.
6. The Committee observed that the 6. The CAO was directed to discuss this with IBSL had not been exempted from the Treasury and get the Insurance Board paying income tax. exempted from paying income tax.
7. The deficit from operating 7. The Committee directed the CAO to adapt a activities had been increased. methodology to reduce the deficit.
104 REPORT FROM THE COMMITTEE ON PUBLIC ENTERPRISES OF THE PARLIAMENT OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA ______
Date/ Name of Major Issues and Problems Comments by the Sub Committee and Institution and Discussed Decisions Ministry 1) Kumarawaththa and Narampola Estates had 1) Losses had been incurred due to the fact that June 28th 2011 reported losses during the period 2008 and the 02 sub stations had been set up only for 2009. Without the legal ownership of the researches and experiments. CAO was Rubber Research Board said lands Institute had spent more than Rs. directed to take this matter into serious 10 million for carrying out certain activities. consideration & submit a report within a (Ministry of Plantation month regarding the action taken to transfer Industries) the ownership of the lands.
2) The steps that had been taken to recover the 2) Directed to submit a report within a period of debtor balance of Rs.7.7 million as at one month indicating the action taken to December 2010 was questioned and it was acquire the land. revealed that out of that amount Rs.5.2.million had been given as an advance to the Advisory Services Department to build up a research unit and due to a problem regarding the transfer of deeds, it had been unable to recover the amount.
3) Action had not been taken to recover surety 3) Legal action had been taken and the relevant bonds valued at Rs. 4.9 million from o4 officers had agreed to pay the dues in officers. installments.
4) Stock verification or Board of survey not 4) The Committee was not satisfied with the carried out, where sum of Rs. 12,432,856/- method adopted. had been in the accounts as closing stock.
5) Observed an excess of expenditure over 5) It was revealed that as a result of adopting income for last several years. new accounting standards, a difference in the profit had been occurred. However 41 million profit had been obtained in the year 2009.
1) The Corporate Plan, Action Plan and 1) The Committee directed the CAO/ AO to June 28th 2011 Annual Budget not being submitted to the submit all the outstanding reports to the Auditor General. Auditor General. National Enterprise Development Authority 2) Annual Reports for the years 2008 & 2009 2) Since both reports had already been sent for not being tabled in Parliament. printing, directed to take action to table them (Ministry of Industry & in Parliament early. Commerce) 3) It was noted that the Audit Report prepared 3) Directed to send a copy of the Audit Report to paying Rs.44,563 to a private institution had the Auditor General. not been submitted to the Auditor General.
4) Without proper approval 4 employees had 4) Directed to obtain approval from the Dept. of been appointed in addition to the approved Management Services for the excess staff. cadre.
5)Institute was continuously running at a loss 5) It was revealed that losses were due to the accrued building rent, expansion of cadre and extra development programmes.
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Date/ Name of Major Issues and Problems Comments by the Sub Committee and Institution and Discussed Decisions Ministry 1) The Committee queried about the tabling of 1) The CAO/AO agreed to present both the Annual Reports for the years 2008 & 2009. reports in Parliament within one month. June 29th 2011 2) The Committee observed the following 2) The CAO /AO explained the difficulties in Resettlement Authority shortcomings in the Authority achieving targets due to the reasons • Corporate Plan and Action Plan not mentioned below. (Ministry of being prepared as per the PED • Non availability of adequate funds Resettlement) Circular No.12 • Overlapping of functions with the other • Meetings of Board of Directors not institutions. being held regularly. • Action not being taken to achieve the objectives of the Authority. 1) Annual Reports for the years 2007, 2008 and 1) The Committee directed the CAO/AO to take June 29th 2011 2009 not being tabled in Parliament. action to present all the outstanding reports in Parliament. Rehabilitation of 2) The Committee noted the following 2) To prepare a revised Corporate Plan. Persons, Properties and shortcomings in the Corporate Plan for the Industries Authority period 2009-2013. • SWOT analysis not being included (Ministry of • Responsibilities not being assigned to Rehabilitation & Prison the officers Reforms) • Operating results of three preceding years not being indicated • The number of goals being indicated in different numbers in the Corporate Plan and the Action Plan 3) A sum of Rs.76,653,006/-granted by the 3) A Cabinet Paper had been submitted seeking Bank of Ceylon to be given as loans to the approval to write off this amount. people affected by the 1983 riots, not being recovered. The CAO/AO stated that most of these beneficiaries had been self-employed Tamil people and it had been impossible to trace these people and their guarantors.
4) Action not being taken to recover the 4) The Committee wanted the CAO/AO to annual interest of 1.5% of the capital discuss this matter with Secretary to the amount of Rs.128 million invested in the particular Ministry and to inform the National Housing Scheme where the total committee of the action taken in this regard. amount recoverable including the interest as at 30.06.2010 being Rs.160 million.
5) To see whether the Resettlement Authority could be amalgamated with the Rehabilitation of Persons, Properties & Industries Authority as the objectives of the two entities are almost the same.
6) 3858 people being paid at the rate of 6) The Committee was informed that this has Rs.12,500/- in contrary to the decision taken been done due to lack of enough funds and to pay Rs. 25,000/- to each married couple the CAO was directed to ask for more funds displaced and living in camps to run a self- and regularize the payment. employment.
106 REPORT FROM THE COMMITTEE ON PUBLIC ENTERPRISES OF THE PARLIAMENT OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA ______
Date/ Name of Major Issues and Problems Comments by the Sub Committee and Institution and Discussed Decisions Ministry 1)Annual Reports for the years 1) To take early action to table all the Annual 15th August 2011 2004,2006,2007,2008 and 2009 had not been Reports which had not been presented in tabled in Parliament. Parliament Condominium Management Authority 2) The Committee noted that the objectives of 2) Directed the CAO/AO to prepare the
the Authority, as per the Act of incorporation Corporate Plan, and the Action Plan, as (Ministry of had not been included in the Corporate Plan explained, and also to submit to the Construction, Engineering prepared for the period 2011 – 2015, and also Committee along with the annual budget. Services , Housing & the Action Plan had not been prepared based Common Amenities) on the Corporate Plan. 3) The Committee enquired about a sum of Rs. 3) The CAO/AO informed that this amount had 500,000/- paid to an external individual, been paid to the Ceylon Workers’ Congress on without the approval of the Board of the instructions of the former chairman. Directors. 4) Offering contracts only to a one group of 4) Weakness on the procurement system, contractors in a situation, where only one directed to streamline the system. bidder had responded. 1) Annual Reports for the years 2007, 2008, 1) The CAO was directed to present Annual 15th August 2011 2009 and 2010 not being presented in Reports for the years of 2007, 2008 & 2009 by Parliament. the end of September, 2011 and the 2010 National Dangerous Annual Report by November, 2011. Drugs Control Board 2) Several shortcomings were observed in the 2) Directed to prepare a fresh Corporate plan (Ministry of Defence) Corporate Plan while, Action Plan had also including the Action Plan & the Annual not been prepared based on the Corporate Budget. Plan. Variances were observed in the Budget as well. 3) 93 vacancies exist in the cadre. 3) The CAO was directed to recruit the required staff after obtaining the approval for the scheme of recruitment. 4) The Financial deficit of the Board had been 4) The CAO was directed to take action to increasing. overcome the situation & report back to the Committee on action taken.
5) Un-reconciled balance amounting to Rs. 5) The Committee directed the CAO/AO to take 502, 438/- had been brought forward in the action to correct this error in the accounts. accounts since the year 2005.
6) Rs. 2 million advances not being settled. 6) Directed the CAO to take action to recover the outstanding amounts.
7) Lack of supervision over the rehabilitated 7) The CAO/AO was directed to take follow-up personnel by the Board had been observed. action and to strengthen the staff & the Social acceptability and the safety of them facilities to overcome the situation. not being secured due to shortage of resources.
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Date/ Name of Major Issues and Problems Comments by the Sub Committee and Institution and Discussed Decisions Ministry 1) The Committee observed that the Ranaviru 1) The Committee directed the CAO/AO to table 15th August 2011 Seva Authority had not tabled the Annual the Annual Reports from 2005 – 2010 within Reports from the year 2000 in Parliament. a month’s time in Parliament, and to table the Ranaviru Seva annual reports from 2000- 2004, within 3 Authority months in Parliament and an action plan be sent within two weeks stating as to how they (Ministry of Defence) clear the backlog. 2)The Committee noted that targets of the 2)The Committee directed the CAO/AO to Authority had not been included in the prepare the Corporate Plan as per the guide Corporate Plan prepared for the period 2011 lines laid down in the PED Circular and to – 2015, the Action Plan had not been update it annually. prepared based on the Corporate Plan, and the Budget too had not been included in the Corporate Plan. 3) The Committee observed that out of Rs. 15 3) Directed to obtain instructions from the million received as capital grant in 2009, Management Services Dept. regarding the Rs. 10 million had been withdrawn by the recruitment of an Accountant, under a Treasury in May 2010, due to non- situation where the court case is pending utilization of funds. The CAO/AO stated against the former accountant. that the Authority could not utilize these grants due to the war situation prevailed at that time and also due to non-availability of an Accountant to make the management aware of such shortcoming 4) Inventories and accounts register not 4) Directed to appoint a committee to act on this maintained and board of survey had not having made a work plan. been carried out
th 15 August 2011 1) The Committee observed that the Annual 1) Directed to table these reports in Parliament Reports for 2008 & 2009 had not been once the cabinet approval would be granted. Sri Lanka Inventors tabled in Parliament. Commission
2) Out of 51, 43 audit queries had not been 2) Directed to take action to respond the audit (Ministry of Technology answered for the period 2005-2010. The queries within a month. & Research) Committee seriously considered this position. 1) The Committee enquired the current position 1) The major business activity of the company at 16th August 2011 of the Institute. the moment had been to purchase organic fertilizer from private producers and Janatha Fertilizer distribute them throughout the country. He Enterprise Limited further stated that around 150 to 200 Met. Tons of fertilizer is purchased and distributed (Ministry of Agrarian per month which can be increased upto 2000 Services & Wild Life) to 3000 Met. Tons.
2)The Committee noted that the Institute had 2) The Chairman requested the Committee that Contd. been running at a loss and for the year 2010, he be given a period of time to show a the expenditure had been around Rs.17 progress. million whereas the income generated by selling of fertilizer had been Rs. 3,83,735 .
108 REPORT FROM THE COMMITTEE ON PUBLIC ENTERPRISES OF THE PARLIAMENT OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA ______
Date/ Name of Major Issues and Problems Comments by the Sub Committee and Institution and Discussed Decisions Ministry 3) i. Observed that, Institute had managed to 3) i. The Committee Janatha Fertilizer meet operational expenses from the Emphasized the existence of the Institute is Enterprise Limited income raised by leasing out of doubtful with the current market warehouses. challenges, as the Institute had been experiencing an unfavourable financial position and also considered the fact the decision had been taken by the Cabinet in November 2008 to amalgamate Janatha Fertilizer Enterprise Ltd. with the Ceylon Fertilizer Co. so far not implemented. Committee directed to implement the Cabinet decision or if not at least keep the cabinet informed of the current position.
ii. At this point, the chairman of the Janatha ii. It was pointed out that even if the company Fertilizer Enterprise Ltd. requested that he gets foreign assistance which should be given some more time to show a channel through the treasury, it is very progress owing to the fact that he had taken unlikely that it will receive green light from some steps to get assistance from the the treasury on account of unsatisfactory World Vision and the Food and financial status. To submit a report to the Agriculture Organization to strengthen this Committee on whatever the action taken company. regarding the Cabinet decision.
4) The Committee observed the following 4) To take action to correct these shortcomings shortcomings in the Institute. within 3 months.
i. Not submitted accounts to the Auditor- General, ii. The Audit & Management Committee not being appointed and meetings not being held. iii. Not tabling the Performance Reports in Parliament, iv. Not preparing the Corporate Plan as well as the Action Plan, v. Not adhering to the guidelines given in the Company’s Act, vi. Not taking action to delegate authority as per the Treasury Circulars.
th 1) The Annual Report for the year 2009 had not 1) Annual report is with the Ministry for August 16 2011 been presented in Parliament. approval.
Sri Lanka Cement 2) Internal Audit Reports had not been 2) The CAO/AO was directed to submit the Corporation submitted to the Auditor-General half same very early.
yearly. (Ministry of State 3) 3 equipment valued at Rs. 5.3 million being 3) These items had now been valued according Resources & Enterprise written off in the year 2007, without to the market value, and would be taken into Development) obtaining the Treasury approval. the accounts this year.
Contd.
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Date/ Name of Major Issues and Problems Comments by the Sub Committee and Institution and Discussed Decisions Ministry 4) Outstanding debtor balances remained over 4) Already recovered 4 million & directed to Sri Lanka Cement 5 years as at the end of the year 2010 had recover the outstanding balance. Corporation been Rs.7.3 million.
5) The Committee observed that out of a stock 5) The Corporation had to bear up this loss. of cement, 9352 cement bags purchased by the Corporation valued at Rs. 2,094,580 had been damaged. The CAO/AO stated that during the war period, the Corporation had a problem in obtaining cement through the sea to Jaffna, and the stock of cement bags had been damaged due to the exposure to the sea for 92 days.
6) Although the Cabinet had given instruction 6) At present only the importation & island wide to take action to produce cement in distribution is being done due to lack of Kankasanthurai, action had not been taken funds. to implement.
7) Although the Corporation had sold the 7) As per the agreement the Corporation is not Puttalam Cement Factory and leased out the entitled to get any benefit. limestone depository for 50 years to the Holcem Company, rest of the resources of the Corporation had not been developed.
8) Rs. 104 million & Rs. 15 million had been 8) The CAO agreed to take follow-up action written off in the year 2006, without the regarding the obtaining of Treasury approval. approval of the Treasury.
9) The Cabinet decision taken to transfer the 9) The CAO/AO was directed to transfer the assets & liabilities of the Lanka Cement assets after amalgamation of these two Company to Sri Lanka Cement Corporation institutions. had not been implemented.
10) 180 acres of land, owned by the 10) A complaint has been lodged in police. Corporation had been acquired by the unauthorized people.
1) The Company had made a proposal to the 1) Directed to take action to amalgamate Treasury, to amalgamate Lakdiva Lakdiva Enginering Company Ltd. with the August 16th 2011 Engineering Company and the Sri Lanka SLTB as a separate division. Transport Board. Lakdiva Engineering Company Ltd. 2) The Committee observed the following 2) The Committee directed the CAO/AO to take shortcomings in the Company. action to correct these shortcomings. (Ministry of Transport) (a) The Institution had not been constituted in Contd. terms of the Company’s Act,
110 REPORT FROM THE COMMITTEE ON PUBLIC ENTERPRISES OF THE PARLIAMENT OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA ______
Date/ Name of Major Issues and Problems Comments by the Sub Committee and Institution and Discussed Decisions Ministry
Lakdiva Engineering (b) Continuous audits had not been carried out, Company Ltd. (c) Steps had not been taken to table the Annual Reports for the years 2008, 2009 & 2010, in Parliament.
(d) An Internal Audit Division had not been established,
(e) Corporate Plan, Action Plan and budgets had not been prepared.
3) The Committee enquired the current position 3) Both cases are being heard at the Ja-ela with regard to the fraud that had been taken Courts place on 03.06.2010. The Company had to pay Rs. 8 lakhs to the Security Services, and that Rs. 21 million loss had been incurred to the Company, where the Company had filed a case against the security services to recover the loss, and the security services had filed a case to get Rs. 8 lakhs that the Company owes to pay.
1) Only 01 Audit & Management Committee 1) Directed to meet once in every three th meeting had been held in the year 2010/2011. months’ time in the future. August 16 2011
Lanka Phosphate 2) The Committee observed that a sum of Rs. 7 2) Out of 21 million of debtor balances as at Company Ltd. million debtor balance had been outstanding December 2009, 7 million had been
for over 5 years. recovered by correcting the shortcomings. (Ministry of State
Resources & Enterprise
Development) 3) Payments had been made without the 3) Action had been taken to introduce
approval of an authorized officer. procedures & guidelines to overcome such shortcomings.
1) The Committee enquired the current position 1) In the years 2005/2006 the leakage had been th on the leakage of milk reported during the 1.04% and during the past two years it had September 19 2011 transportation between the milk collecting been brought down to 0.39% and further centres and the factories. stated that the target is to bring down this Milko Pvt. Ltd. amount to 0.25%, and that by now they maintain a very good control between the (Ministry of Livestock & milk collecting centers and the factories. Rural Community
Development)
2) The Committee observed that the unsettled 2) The CAO/AO stated that by now all advances advances as at 31.03.2010 had been Rs. had been recovered. 15,271,639/-.
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Date/ Name of Major Issues and Problems Comments by the Sub Committee and Institution and Discussed Decisions Ministry
September 19th 2011 1) Subsidiary Company named as HDFC Real 1) Directed to take quick action to get the title Estate Development Ltd. was running at a deeds transferred and sell the houses. Housing Development loss and depended upon the financial Finance Corporation assistance of the HDFC Bank. The (HDFC) Bank CAO/AO stated that an attempt to demolish 72 houses built up by the said company in (Ministry of Finance & Awissawella had failed as the land belonged Planning) to the NHDA & UDA.
2) Unidentified deposit balance of customer as 2) The AO agreed to take action to clear these at 31.12.2010 had been Rs. 5,938,847/-. It outstanding amounts & report back to the was stated that this amount had been Committee before the end of this year. reduced to Rs. 4.5 million by now.
3) The Bank had deposited a sum of Rs. 317 3) Directed to negotiate this matter with the million with the Central Bank to facilitate Central Bank, informing them that HDFC agricultural purposes contrary to the had been questioned by the COPE on this provision of the Act. No. 07 of 1997. The matter. AO stated that the Central Bank had decided that every Bank should contribute 10% for the agricultural purposes.
4) Five mortgaged properties had been sold 4) Directed to explore the possibility of incurring a loss of Rs. 1,094,971/- to the recovering loss and if not, to write off with Bank. proper approval. 5) The former chairman had been paid Rs. 5) Directed to send the report on the history of 3,694,475/- as monthly residence and other this matter. allowance since 21.11.2000 to 31.12.2009.
6) Contrary to the normal interest rate, the Bank 6) This has been an error done by the Board. had agreed in advertently pay 22.1% fixed deposit of CEB amounts to Rs. 450 Mn. where the overpayment would be Rs. 69,391,353/-.
September 19th 2011 1) Annual Reports for the years 2006 to 2009 1) Directed to take action to table them early and had not been presented in Parliament. to ensure tabling of Annual Reports within Elkaduwa Plantations prescribed period of time in future. Ltd.
(Ministry of State 2) Services of the General Manager, 2) The Committee expressing that Board of Resources & Enterprise Accountant and the Administrative Officer Directors does not have the Authority to do Development) who are above 60 years, had been extended. so & Cabinet approval should have been It was stated that the Board approval had taken, directed the CAO to look into this been obtained. matter and report back to the Committee with a copy of the approval of the Board of Directors in this regard.
Contd.
112 REPORT FROM THE COMMITTEE ON PUBLIC ENTERPRISES OF THE PARLIAMENT OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA ______
Date/ Name of Major Issues and Problems Comments by the Sub Committee and Institution and Discussed Decisions Ministry 3) Coconut nuts had been sold in the open 3) The Committee mentioned that the Institution Elkaduwa Plantations market without following the tender do not have an authority to act in this manner, Ltd. procedures. The AO stated that after selling and submit a report to the Committee on this 70% of the stock in public auction, the issue. balance had been sold in the open market.
4) It was queried why the Head office of the 4) Directed to send a report as to why the head Alkaduwa Plantations established in office cannot be established in Elkaduwa. Colombo.
5) The General Manager had been paid an 5) The CAO was directed to look into this incentive as labour allowances. matter and take action to recover the full amount. 6) Loss of Rs. 1,179,077/- had been incurred 6) The Committee directed to take action to due to unsystematic tapping of Rubber in overcome these management inefficiencies. the Nalanda Estate.
7) 8 cows had been died in 2011, where no 7) Since investigation is being conducted, medical certificates had been issued by a directed to send a report after completing it. Veterinary Surgeon.
1) Financial Statements had not been prepared 1) Directed the CAO/AO to withdraw the September 19th 2011 in accordance with the SLAS 13 and accounts for the year 2010 and take action to number of shortcomings were observed in furnish a corrected set of accounts to the audit Central Engineering them. within two months’ time. And also directed Consultancy Bureau the CAO/AO to inform the Hon. Minister of these shortcomings, and if necessary to present (Ministry of Irrigation & a Cabinet paper to introduce appropriate Water Management) methodology.
2) There had been a debtor balance of Rs. 2) Directed to see whether always certified bills 1,597,867,922/- . are obtained.
1) A superintendent was transferred to another 1) The CAO was directed to take actions against September 19th 2011 section on his wrongful administration, but him and report back to the Committee, he had resigned from the post before taking including by whom this person had been Kurunegala Plantations any legal action. Later he had been appointed to the present position and the Ltd. appointed as Coordinating officer in the requirement of the post of coordinating officer Chillaw Plantations. to the Chillaw Plantations. (Ministry of Coconut Development & Janatha
Estate Development) 2) Actual yield and the number of trees per acre 2) The CAO/AO was directed to take action to
in the estates were at low levels compared to overcome this situation. accepted levels.
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Date/ Name of Major Issues and Problems Comments by the Sub Committee and Institution and Discussed Decisions Ministry
November 14th 2011 1) Internal Audit for the years 2010 & 2011 1) The Committee stressed that it is compulsory had not been done & Annual Audit Plan or to submit the Internal Audit Plan to the SL Export Credit the Interim Audit Report had also not been Auditor General. Insurance Corporation submitted.
(Ministry of Finance & 2) The concurrence of the Ministry of Finance 2) The CAO was directed to get the approval of Planning) & Planning had not been obtained for the the Ministry in terms of the Finance Act. investment of Rs. 242.6 million in Treasury Bills and Rs. 258.8 in U.S. Dollar fixed deposits.
3) The Corporation had invested Rs. 25.5 Mn. 3) The AO was advised to get prior approval of in private banks. the Ministry in the future investments.
4) 50% to 80 % of the total cost had been paid 4) The CAO was directed to follow the rules and as mobilization advances for supplies and regulations or otherwise get the approval of services contrary to the maximum payable the Treasury in case of urgent services. 20% as per the Procurement Guidelines.
5) Claims paid to exporters had not been 5) The CAO was directed to submit a list of recovered. The AO stated that according to names of the clients that are going to be the insurance main contract there is no way written off and names of the clients already of recovering the claims. written off from the accounts.
November 14th 2011 1) It was observed that the 147 posts amounting 1) The CAO was directed to fill the vacancies at to 14% of the total cadre had been vacant. earliest possible or to revise the cadre. SL Social Security Board 2) Approval of the Ministry had not been 2) The Committee informed the CAO to keep obtained for the investment of Rs. the Treasury informed of these details. (Ministry of Finance & 807,165,121/- in the year 2009. The CAO Planning) stated that 2011 investments approved by the Board had been submitted for the concurrence of the Minister.
3) Rs. 2.8 Mn. of the Pension Fund had been 3) The Committee directed not to follow such spent to pay distress loans to the employees, practices in future. contrary to the objectives. 4) Premium amounting to Rs. 6,475,406/- of 4) The CAO was directed to correct the Pension & Social Security Benefit Scheme situation. that had been directly credited to the Bank Accounts had not been identified and posted.
Contd. 5) Some of the targets that had been included in 5) The CAO was directed to review the progress the Action Plan had not been achieved. in Programme review meetings & furnish the progress to the Committee. 6) The contract had been offered to Advent 6) The CAO was directed to send a report Techniques in Bangalore subject to a bond including the date of calling for tenders, worth of US $ 159. details of the bidders etc. and the present progress of the project.
114 REPORT FROM THE COMMITTEE ON PUBLIC ENTERPRISES OF THE PARLIAMENT OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA ______
Date/ Name of Major Issues and Problems Comments by the Sub Committee and Institution and Discussed Decisions Ministry 7) New officers had been appointed on contract 7) The Committee stressed that approval of the SL Social Security basis without the approval of the Ministry. Ministry of Finance should be obtained for Board such appointments and directed to send the list of the names of the officers who had been appointed on contract basis. 8) A new building had been purchased at Rs. 80 8) The CAO was directed to implement a new Mn. in other city even though District office methodology to enroll new members. is located in Nuwara Eliya. But no members had been enrolled from the Plantation sector. 9) The Committee questioned whether any 9) The AO was directed to furnish the awareness programmes had been conducted expenditure incurred in these promotional abroad to recruit Sri Lankan work force. The programmes to the Committee. AO stated that two programmes had been conducted in Kuwait and Singapore. 10) Investment of Rs. 531 Mn. had been done 10) The CAO was directed to look into the in Peoples Leasing Company. present status of the investment due to the current problem in the stock market. 1) The Corporate Plan and the Action Plan had 1) The CAO was directed to prepare the November 14th 2011 not been prepared in accordance with the Corporate Plan for the period of 2010-2015 Public Enterprises Circular. in line with the Circular. Swami Vipulananda Institute of Aesthetic 2) Annual reports for the years of 2007-2010 2) The CAO was directed to present them by Studies had not been presented in Parliament. the end of December, 2011.
(Ministry of Higher 3) Cost of student gone upto Rs. 10,518 in 3) This has caused due to more student intake Education) 2010 compared to 2009. in 2010.
4) Capital provision of Rs. 9.9 Mn. made use 4) Directed not to recur. for recurrent purposes contrary to FR.
5) Physical verification of fixed assets had not 5) The CAO was directed to carry out physical been carried out in year 2008 and 2009. verification of assets soon.
6) 10 computers had been procured without 6) The CAO was directed to call fresh following the open tender procedures. It was quotations in future. stated that they were purchased at same price which was decided after calling tenders by the Eastern University. 7) 43 cheques of Rs. 5,804,719/- written in 7) The CAO was directed to send detailed favour of several suppliers had been taken report regarding the matter. over by the Store keeper and Senior Assistant Bursar without posting them to the suppliers and 21 cheques written in 6 months back had been kept in the office without issuing to the relevant parties in the year 2010. 8) Rs. 966,000/- incurred for the private 8) The CAO Was directed to send a report security services in the year 2010 while explaining the reasons. permanent security officers were engaged.
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Date/ Name of Major Issues and Problems Comments by the Sub Committee and Institution and Discussed Decisions Ministry 1) The Committee observed that there is a 1) The CAO was directed to appoint less November 14th& 15th2011 large number of member on the Board of number of members in consultation with the Directors and was of the view that the effect Hon. Minister. Consumer Affairs is very less. Authority 2) The Committee observed that some 2) The CAO was directed to submit
(Ministry of Co- essential elements had not been embodied in comprehensive Corporate Plan for the years operatives & Internal the Corporate Plan prepared for the period of 2011-2013. Trade) of 2010-2012. 3) The Committee observed following 3) The CAO was directed to report back to the shortcomings with regard to the internal Committee after regularizing the said audit; shortcomings. Treasury was also directed to i. No internal audit had been done in the follow-up. year 2010 ii. Internal Auditor had only been appointed in January 2011 iii. Action had not been taken to obtain approval for the supporting staff for the internal audit iv. Representative of the Auditor General was not invited to audit committee meetings. 4) The post of Director General had been 4) The CAO was directed to take immediate vacant for 20 months. Interview was held, action regarding these matters and to send the and 4 persons including two internal officers names of officers who are in acting posts. had required qualifications, but applications are called again without selecting one person from them. In addition 07 posts had been vacant from 10 August, 2010 and 07 officers covering the duties on acting basis.
5) Even though Board members should be 5) The CAO was directed to consider the fact comprised of variety of experiences, some when appointing Board members and Hon. present members do not have such Minister be informed regarding this. qualifications. Out of 08 members appointed 02 do not possess any qualifications.
6) Vacancies exist in different categories had 6) The CAO was directed to recruit employees been 104 as at 27 October, 2011, while 17 for approved posts. persons had been recruited on daily paid and contract basis even though there is no such provision in the approved cadre. It was stated that approval for 6 persons had already been taken. 7) A consultant over 60 years of age had been 7) The CAO was directed to rectify the recruited without the approval of the situation. Contd. Cabinet. 8) Attendance of the Board members had been 8) The CAO was directed to submit list of the at a low level for the board meetings. It was names of members who had less interest to stated that only14 members attend regularly. the Hon. Minister.
116 REPORT FROM THE COMMITTEE ON PUBLIC ENTERPRISES OF THE PARLIAMENT OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA ______
Date/ Name of Major Issues and Problems Comments by the Sub Committee and Institution and Discussed Decisions Ministry 9) Fines receivable by the authority amounting 9) The CAO was directed to furnish the age Consumer Affairs to Rs. 1,152,544 had not been recovered. As analysis without further delay, and also to Authority this money comes through the Ministry of find a mechanism to obtain fines in time. justice, they had written to expedite this payment. The age analysis of the fines receivable had not been submitted as requested, in the previous COPE meeting. 10) It was noted that even though every trader 10) The Committee directed to expedite the shall register with the Authority at Rs. process of amending Act. 100,000/- per annum, no one had registered so far. It was stated that Act is being amended since this is not practically possible. 11) An officer with less qualifications had been 11) The CAO was directed to look into the recruited for the post of Director (Finance) matter and report back to the Committee. without the formal approval and he had been confirmed thereafter. Further he had been placed 2 increments above the relevant salary scale. 12) Media office which is not included in the 12) The Committee seriously considered this cadre had been filled on contract basis to irregularity and directed the CAO to rectify the media unit established in year 2010 and the situation and to strictly follow the despite the payment of monthly hire charge Treasury Circulars and FR. of Rs 50,000/- for a motor vehicle and
monthly supply of 120 Litres of fuel,
Board had approved unlimited supply of fuel for him.
13) 11 employees of the Authority had been 13) The CAO/AO was informed that they are
paid overtime exceeding the monthly responsible for these irregularities ant to send
salary in certain months of 2010 and it the names of Media Officer and other 11
exceeds 75% of the salary in certain employees to the Committee.
instances. It was stated that these officers
are attached to the media unit.
14) It was observed that arrival and departure 14) The CAO/AO was directed to send the
of 13 employees had not been recorded in names of 13 officers to the Committee.
attendance register, but full salaries had
been paid. It was stated that one of them is
an investigation officer and hence his
authorizing letter is considered as the
attendance for him.
15) Stenography service had been procured at 15) The CAO was directed to regularize these Rs. 263,900/- and Rs. 235,000/- in year appointments after obtaining Treasury Contd. 2010 and 2011 respectively. The CAO approval. stated that this particular stenographer was attached to the Ministers Office and was retired under VRS.
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Date/ Name of Major Issues and Problems Comments by the Sub Committee and Institution and Discussed Decisions Ministry Consumer Affairs 16) Motor vehicles had been assigned to 5 16) The CAO was directed to immediately Authority Directors who are not entitled to and fuel discontinue this practice and Treasury was allowances had been paid to them in year also directed to stop this practice from now 2009 contrary to the Treasury Circulars. on. 17) There were some irregularities in providing 17) The Committee emphasized the importance benefits to the Chairman and the Directors of appointing staff according to the Para 03 of the Institution. of the Consumer Affairs Authority Act and directed the CAO to regularize the matter. 18) 07 employees had been deployed in the 18) The CAO was directed to send a progress Ministry Office by 19 May 2011 and their report in on raids monthly and to rectify the deployment had been extended by one year situation. with effect from 01 June and 01 July had been approved. Further 06 employees recruited on contract basis had been deployed in Nikaweratiya area, though there is no regional office.
19) i) Only 15 commodities had been named as 19) i) The CAO was directed to send the list of fixed commodities after establishing the the commodities that are already named as Authority. fixed commodities.
ii) The Committee expressed its ii) The CAO was directed to send a report dissatisfaction over not taking proper indicating the date on which this cement lot action with regard to the importation of the had been imported and what action had been low quality cement to the country and taken. stated that the Authority had not given considerable attention for its responsibility. The CAO sated that now they had taken action to check the quality of the cement.
iii) The Committee also enquired about iii) The CAO/AO was informed that they issues of several other fixed commodities. have authority to check the quality of the goods without waiting till complaints and directed to perform duties stipulated in the Act.
20) Rs. 36,000/- per month had been paid for 20) The CAO was directed to send the cleaning the building till April 2011. The agreement to the Committee and AG. amount paid for Cleaning Company had been increased to Rs. 70,000/- per month on their request.
118 REPORT FROM THE COMMITTEE ON PUBLIC ENTERPRISES OF THE PARLIAMENT OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA ______
Date/ Name of Major Issues and Problems Comments by the Sub Committee and Institution and Discussed Ministry Decisions 1) Annual Reports for the years 2009 &2010 1) The CAO was directed to take action to November 15th 2011 had not been presented in Parliament. present them in Parliament before the budget.
National Apprentice & 2) 73 officials had been appointed without the 2) The CAO was directed to absorb the rest of Industrial Training approval of Dept. of Management Services. the official when the Scheme of Authority (NAITA) The CAO stated that they could be absorbed Recruitment is approved. since the total cadre had now been (Ministry of Youth approved. Affairs & Skills Development) 3) Committee noted that the highest rate of 3) The CAO was directed to do the needful to 34.8 % apprentices who vacated courses improve monitoring and to reduce drop-outs. had been recorded in the year 2010. It was He was also informed to adopt a stated that lack of supervisors was the methodology to recruit staff on contract major cause for this and it was difficult to basis. recruit suitable staff due to non-attractive salary scales.
4) The depreciation of fixed assets purchased 4) The CAO was directed to rectify the situation. from grants had not been correctly identified and the post of Financial Chief had been vacant.
5) Advances granted to 20 external Institutions 5) The CAO was directed to send the details to during 1999 to 2008 had not been settled. It the Auditor General. was stated that outstanding balance by 2011 is only Rs. 97,000/-.
6) There had been debtor balances over 5 years 6) The CAO was directed to take action to amounted to Rs. 3.1 Mn out of which Rs. recover the dues and keep the AG informed. 2.1 Mn had been over 10 years and proper action had not been taken to recover the dues. It was stated that current balance is only about Rs. 2.5 - 3.0 Lakhs.
7) Two officers had been released to the line 7) The CAO was directed to get written approval Ministry, while one officer had been from the Treasury. released to the external Institution without obtaining the Cabinet approval and salaries and allowances had been paid by the Institution during 2006-2010.
8) The Chairman and the Deputy Chairman 8) The CAO was directed to ensure that this
had had consumed excess fuel without will not happen in the future and appreciated
obtaining proper approval. However the the present position.
present Chairman had performed his duties
without obtaining salaries and allowances Contd. since the year 2010.
9) Rs. 400/- per year had been charged from a 9) The CAO was directed to send a future plan student for welfare fund by the 3 national on farewell activities to the Committee. centres without proper approval and no welfare had been done.
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Date/ Name of Major Issues and Problems Comments by the Sub Committee and Institution and Discussed Ministry Decisions 10) Building had been constructed to establish 710)The CAO was directed to send details on the National Apprentice & 7 training centres without taking over progress. Industrial Training the ownership of the lands to the Authority. Authority (NAITA) It was stated that ownership transferring is being done. 11)Reports regarding the 7 vehicles accidents 11)The CAO was directed to send legal had not been furnished to the AG. documents regarding the investigations done to the AG. 1) Annual reports for the years 2007, 2008 & 1) The CAO was directed to table them without November 15th 2011 2009 had not been presented in Parliament. further delay.
State Engineering 2) Shortcomings were observed in the 2) The CAO was directed to prepare it including Corporation of SL Corporate Plan prepared for the years 2011- the quantitative values of the targets. (SEC) 2015.
3) The Committee enquired about the 3) The CAO was directed to report the progress (Ministry of Construction, unidentified VAT to be settled. The CAO to the Committee. Engineering Services , stated that a tax officer and also a committee Housing & Common is appointed to look into this matter. Amenities) 4) There was an unrecovered debtor balance of 4) The Committee directed to send the details of
Rs. 335 Mn. this balance.
5) Poor performances had been observed in 5) The CAO was directed to take necessary following divisions. steps to overcome the situation. i. Mechanical and Electrical division had been running at a loss in past 10 years. (Rs. 73.5 Mn.) ii. Dolomite Pre-Mix Yard at Matale was also running at a loss during past 13 years except year 2006. (Rs. 4.8 Mn.) iii. Bricks and Carpentry manufacturing Yard( Rs. 10.42 Mn.) iv. Aluminum Yard at Ratmalana incurred a loss in year 2010. ( Rs. 2.8 Mn.) v. The labour cost of the Mechanical and Electrical Division at Ratmalana had been 338% compared to the income.
6) 156 officers had been recruited without 6) The Committee directed to send explanations getting approval of the Department of regarding the cadre situation. Management Services and 187 unskilled employees had made permanent in excess of the approved cadre. The actual total cadre exists was 2406 as at 30th June 2011 where approved cadre is only 2068.
Contd.
120 REPORT FROM THE COMMITTEE ON PUBLIC ENTERPRISES OF THE PARLIAMENT OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA ______
Date/ Name of Major Issues and Problems Comments by the Sub Committee and Institution and Discussed Decisions Ministry State Engineering 07) Following observations had been made 07) The CAO was directed to take action to Corporation of SL regarding some contracts: mitigate losses and to send a complete report (SEC) i) Losses incurred in 47 contracts during to the Committee on these matters. 2007-2010 ii) Loss of Rs. 301.3 Mn .incurred on 64 constructions executed in 2009-2010. iii) Invoices for the constructions amounted to Rs. 18.7 Mn. had not been furnished and bills for the constructions of Rs. 20.2 Mn. had been delayed in 2008-2009.
08) Overpayment of VAT had been done in 08) The CAO was directed to take actions to 2009. recover the over payment and to correct the calculations in the current year accounts.
09) Rs. 2,033,006/- had been paid as the 09) The Committee directed to send a report overtime and holiday pay for the drivers in including the details of hired vehicles, rates addition to the hired charges of those and expenses. vehicles as per the agreement.
10) Two motor vehicles of the Institution and 10) The CAO was directed to send a full report other 08 vehicles procured on hire basis on this payments and vehicles to the paying a sum of Rs. 1,298,226/- had been Committee. released to the Ministry contrary to the Public Enterprises Circular.
1) (i) Corporate Plans 1) (i) The CAO/AO stated that initially there November 15th 2011 had been one plan covering the period 2009- 2013. Subsequently another plan had been Board of Investment prepared for 2011-2015. The Committee (BOI) emphasized that the Corporate Plan should be a rolling plan for a continuous period of time (Ministry of Economic and questioned how the Institution works Development) with a number of Corporate Plans which are getting frequent changes.
(ii) The Committee questioned about the (ii) The CAO/AO stated that; targets of the institution
(a) Earn 5% of the GDP of the country by way of investments., earlier it had
been 2%
(b) Re-organizing BOI sector-wise (iii) Achievements expected in re investments of 1290 million of US $ in (c) Reduction of cost of BOI 2011. (d) Efficiency be enhanced Contd. (iii) In the first nine months 600US $ achievement shown.
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Date/ Name of Major Issues and Problems Comments by the Sub Committee and Institution and Discussed Decisions Ministry 2) For the capital and recurrent budget, 2) Treasury approval has been requested, but initially got the Treasury approval. But for not yet obtained. Directed to follow-up and amendments such approval has not been also to send a copy of amended budget. obtained. 3) How many zones coming under BOI and 3) There are 12 zones and 125000 workers what are the problems undergoing? employed. They have a problem of having labour, and at present working with the Samurdhi Authority to overcome this. In addition they build hostels in Wathupitiwala and Biyagama. Investors are carrying out a building project of hostels in Kandy. 4) Labour cost per month. 4) It would depend on the sectors; For a labourer – 100US $ Semi-skilled labourer – 115 US $ Manager – 200 US $ The Committee was of the view that this cost is very high and the investments will not be encouraged. 5) Low rate of investors coming 5) In 2010 there was a decline due to series of elections held. But in 2011 it has come to a reasonable amount. 6) What is the period of time taking a company 6) It cannot be generalized, and depend on the to be formed? type of the project. Committees’ view was that, BOI taken a long time when compared to India and Bangladesh. 7) Out of 37 companies underutilized and the 7) Directed to send a detailed report to the factories closed, how many workers lost their Committee. jobs, what was the last day of existence, when the final accounts were submitted during the year 2010 and 2011? 8) Questioned about the Zones went in to 8) Biyagama, Wathupitiwala, Mirigama in 2007. losses. This was caused by under underutilization of projects and closing down of companies. High expenditure on water was also a main factor. Directed to send a full report on this. 9) Presentation of Annual reports 09) Last presented report was 2007.2008 prepared. But not sent to the Ministry.
Directed to present all outstanding reports within one month. 10) Merbok Transactions 10) Now an international arbitration is going on.
11) Vidyodaya Ayurvedic Private Medical 11) Now under litigation. College.
12) Perth State 12) They have come to an agreement with the Plantation Corporation to manage this. Now the land has been taken back and
earning profit. Chairman was directed to send a report having looked into.
122 REPORT FROM THE COMMITTEE ON PUBLIC ENTERPRISES OF THE PARLIAMENT OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA ______
Date/ Name of Major Issues and Problems Comments by the Sub Committee and Institution and Discussed Decisions Ministry Board of Investment 13) Accounts receivable and payable 13) Normal receivables are ground rent charged (BOI) from the companies within the Zone and the annual fee from out of the Zone. If the Company is closed, it is impossible to recover and litigation process is started.
14) There had been 249 million of doubtful 14). Directed to send a report and provision debtors. could have been made on doubtful debtors.
15) Unit cost of electricity 15) Varied according to the sector. Very roughly it is 12.5 US $ cents per week.
16) 100 million outstanding to be recovered 16) This has been in connection with providing from 09 Government institutions. some caps to the Army. Directed to send a report. 17) Incoming of investors and signing of 17) Recently about 30 companies came in agreement during a week and roughly about 08 agreements were signed on Thursdays of the week which has been set apart to that purpose. 18) 142 million not being paid to the 18) As they were not getting any fund from the consolidated fund in 2010. Government they have got permission from the treasury. But they had paid a lump sum. Directed to send a copy of the letter of the Treasury.
19) Vehicle loans granted without the necessary 19) Subsequently submitted. Directed to report. documents
20) PAYE tax 20) Done on a board directive. Directed to get the approval from the treasury.
21) Violated the Inland Revenue Circular in 21) Directed to send explanation to the 2010 in paying PAYE tax. Committee.
22) 05 executive staff had been on contract 22) The CAO was directed to send the cadre
basis while 54 posts had been vacant. position in detail to the Committee.
23) Proper incentive scheme had not been 23)The CAO was directed to send a report to the prepared yet for the staff. Committee.
24) Employees had been released to the line 24)The Committee directed to send an Ministry contrary to the Circulars. explanation.
25) Motor vehicles had been released to the line 25) The CAO was directed to send a report. Ministry and spent Rs. 6.9 Mn for repairs contrary to the Circulars.
26) What are the projects got tax released in 26) The CAO was directed to send a detailed years 2008, 2009 and 2010? report about these projects.
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Date/ Name of Major Issues and Problems Comments by the Sub Committee and Institution and Discussed Decisions Ministry 1) Annual Reports for the years 2008, 2009 1) The CAO was directed to expedite the November 15th 2011 and 2010 had not been presented in presentation of said reports in Parliament. Parliament. Central Environmental Authority 2) The Committee was not satisfied with the 2) The CAO was directed to take whatever the action taken to handle public complaints and actions needed to handle them more (Ministry of follow up actions on the same. appropriately. Environment) 3) It was noted that the 77 vacancies exist in 3) The Committees view was that there is no the Authority. 30 vacancies had been filled need of attaching CEA officers in District by now. The CAO stated that District and Secretariats and Divisional Secretariats and Divisional Secretaries request directed to attach officers where essential environmental officers from the Authority after establishing branch offices of CEA. as well.
4) According to the Corporate Plan 2008-2012 4) The CAO was directed to expedite the it was the main target to amend the National amendment of Act. Environmental Act. It had not been done so far.
5) Attendance allowances had been paid to 5) The CAO was directed to obtain the Treasury officers contrary to the provisions in Public approval at earliest possible. Enterprises Circular.
124 REPORT FROM THE COMMITTEE ON PUBLIC ENTERPRISES OF THE PARLIAMENT OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA ______
Appendix D
PARLIAMENTARY SERIES NO. 119
______Appendix D
Issues Discussed at the Meetings of the Sub Committee II (Agriculture & Media) of the Committee on Public Enterprises
Date/Name of the Major Issues/Problems Discussed Comments by the Sub Committee Institution and & Decisions Ministry
1. Delay in presenting Accounts 1. Financial statement should to Audit be presented to Audit in time
2. Internal Audit Unit is not 2. Ministry Internal Audit functioning in the Fund should oversee the Accounts 17th August, 2010 until a new internal Auditor is appointed Botanical Garden Trust Fund 3. Electrically operated gate to 3. Directed the NERD be fixed at the premises of the Institution to expedite the (Ministry of Peradeniya Botanical garden construction Economic had not been in operation Development) after spending Rs.1.36 million
4. Only 3 members in the board 4. Due to the change of the of trustee, but as per the Act it Ministry, number of the should be 4. members of the Board had been reduced to 3, directed to amend the Act accordingly.
18th August, 2010 1. Annual Reports had not been 1. Action should be taken to tabled in Parliament from the table Annual Reports Sri Lanka inception immediately Institute of Printing 2. Internal Audit Unit is not 2. To get assistance of the functioning in the Institute Ministry Internal Audit (Ministry of Youth Affairs) 3. Organizational chart is not get 3. This type of delays should be registered with the Dept. of overcome promptly Public Enterprises
125 REPORT FROM THE COMMITTEE ON PUBLIC ENTERPRISES OF THE PARLIAMENT OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA ______Date/Name of the Major Issues/Problems Discussed Comments by the Sub Committee Institution and & Decisions Ministry
1. Discussed the qualifications 1. Directed to send the of the higher level staff qualifications of the all higher level officials within a week 19th August, 2010 2. Annual Reports had not been tabled in Parliament since 2. To table the all outstanding Institute of Post 2006 Annual Reports within next 2 Harvest months Technology 3. Action Plan for 2010 had not been submitted to COPE 3. Action plan should be (Ministry of submitted to COPE & the Agriculture) Auditor General 4. Vegetables & fruits display units had been purchased and 4. Government rules & sold at a lower cost than regulations should be purchased value incurring a followed by the Institution loss of Rs. 1,845,000/- in 2009 5. A survey should be done to 5. Rs. 600,000/-had been spent find out whether this to repair 20 years old machine machine would be able to used to produce noodles cater the present market requirement & the working conditions of the machine
6. Assets & Liabilities taken 6. The response of the Govt. over from the Paddy Valuer is very unsatisfactory Marketing board had not been and directed to settle this settled in time due to poor matter within 3 months time response from the Govt. valuer 7. Directed to submit a report 7. It has been observed a justifying the expenses considerable increase in administrative & establishment expenses from 2006 to 2008 8. Although it had been used for official purposes prior 8. Approved limits for fuel had approval should be taken by exceeded in the year 2008 by the officers, Directed to the Chairman, amounting to obtain covering approval Rs. 102,441/- 9. To fill all the vacancies, once 9. Officers had been appointed the scheme of recruitment is on acting basis without filling approved from the Dept. of the existing vacancies Management Services
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______Date/Name of the Major Issues/Problems Discussed Comments by the Sub Committee Institution and & Decisions Ministry
1. Delay in Presentation of 1. Directed to take action to Annual Report for 2009 present Annual Reports in time 19th August 2010 2. Audit & Management 2. It is essential to hold Audit & Land Survey Committees had not been held Management Committees Council regularly & directed to furnish the management (Ministry of Land report for Audit & Land Development) 3. Financial targets had not been 3. Corporate Plan has to be included in the Corporate plan amended & to be more prepared for the period 2010- realistic 2013
4. Payment of arrears of 4. Explanation given is not allowances for the Chairman accepted by the Committee & the Vice Chairman had made a surplus of Rs. 77,408/- in the year 2008, No proper approval had been obtained
5. Due to the poor salary scales 5. Salaries do not match with of the Council only Actg. the professional Appointments could be made qualifications to the posts of Secretary & the Accountant
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1. Annual reports had not been 1. Directed to take immediate presented to parliament after action to present Annual 2007 Reports in Parliament
2. Debtor balances amounting to 2. Most of the Institutions had Rs.3,171,594/- had not been followed a lethargic way of recovered recovering debtor balances, 20th August,2010 A proper mechanism should be followed National Aquatic Resources 3. Guide lines in the 3. Directed to get further advice Research & establishment code had not from the Treasury Development been followed when Agency promotions & appointments were given (Ministry of Fisheries & Aquatic 4. Corporate plan had not been 4. Directed to submit the Resources updated for the year 2010 updated Corporate Plan Development) within 3 months
5. Nine Officers attached to 5. To submit a report to the NARA had been released to Committee in this regard other entities
1. Delay in submitting Budget 1. Budget should be submitted prior to the commencement of the particular year 23rd 2. Audit & Management September,2010 Committees are not held 2. Directed to meet at least properly once in every 3 months
3. Chief Internal Auditor post 3. Directed to appoint a State Printing had been vacant since 2007 permanent Chief Internal Corporation Auditor immediately
4. Corporate plan prepared 4. To update the Corporate plan For the period 2009-2013 had on yearly basis (Ministry of Mass not been updated Media & 5. Committee was of the view Information) that the Administration of the Corporation is in better position when compared with the other Institutions.
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______Date/Name of the Major Issues/Problems Discussed Comments by the Sub Committee Institution and & Decisions Ministry
1. The Company had not been 1. Immediate action should be registered under Companies taken to register the Act since it operates under a Company before the 2012 competent authority budget 23rd September 2010 2. Debtor balance of Rs. 60 2. The Committee seriously million had been written off considered the illegal writing without Treasury approval off of the debtor balances, Colombo since no way to correct it Commercial advised to get the covering Fertilizer Co. Ltd. approval & submit a detail report to the Committee
3. An association in 3. Directed to submit a report to (Ministry of Anuradhapura district had the Committee before the Agriculture) distributed 41,571.45 M.T. of commencement of the 2012 fertilizer in contrary to the Budget recommendations of the committee
4. Audit & Management 4. The Committee emphasized Committees had not been held the requirement of holding for the year 2010 the Audit & Management Committee meetings regularly
5. Internal Auditor had been 5. Internal Auditor’s work functioning also in the post of should be independent as to Sales Manager, due to the maintain the transparency permanent post holder was sent on compulsory leave
6. No approved cadre in the 6. Agreed to submit the scheme Company, Scheme of of recruitment for Treasury recruitment is under approval within 6 months preparation
7. Unrealistic budgeting in the 7. Directed to prepare the Company Budget for the year 2011
Contd...
129 REPORT FROM THE COMMITTEE ON PUBLIC ENTERPRISES OF THE PARLIAMENT OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA ______Date/Name of the Major Issues/Problems Discussed Comments by the Sub Committee Institution and & Decisions Ministry
Colombo Commercial 8. Audit & Management 8. To hold the Committee Fertilizer Co. Ltd Committees had not been held meetings without further for the year 2010 delay
9. Internal applications were 9. Directed to call fresh called for the post of A.O. and applications for the post later cancelled the interview due to the malpractices of the applicants, appointed someone else considering performance & experience
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______Date/Name of the Major Issues/Problems Discussed Comments by the Sub Committee Institution and & Decisions Ministry
1. Performance indicators had 1. To update the Corporate plan not been included in the in a way of a rolling plan and Corporate plan for the period submit the new Corporate 2008 – 2012 plan within one month
2. 2007 – 2009 Annual Reports 2. To present the annual reports had not been tabled in in Parliament before 2012 O6th October, Parliament Budget and 2010 annual 2010 accounts should be tabled prior to the due date Sugarcane Research Institute 3. Without the legal ownership 3. Secretary to the Ministry of the land, Institute had spent should intervene to find a (Ministry of Rs. 8.61 million to develop it solution since Mahaweli Plantation Authority, the landowner is Industries) reluctant to transfer the ownership
4. Revaluation of assets is in the 4. To finalize the valuation process process before 2010 and include those figures in accounts 5. Discussed about the Meerut 5. To submit the report to the Oven system Committee in this regard 1. Annual report for the year 1. Directed to take early action 06th October, 2010 2009 had not been tabled in to table the annual report & Parliament the accounts for the year Tertiary & 2010 Vocational Education 2. Vocational Education & 2. Vocational Education & Commission Training Plan had been only Training Plans(VET) should completed for the be completed for other (Ministry of Youth Sabaragamuwa Province provinces soon Affairs) 3. Out of 7 Advisory 3. Action should be taken to Committees established for convene all 7 Advisory various industrial fields only 5 Committees after appointing Committees had met the Board of Directors 4. Action should be taken to get 4. After spending Rs. 1.19 the balance research reports, million for 14 research Government funds should be programmes only 10 reports invested for the betterment of had been submitted with the the Country by implementing recommendations the recommendations where possible
131 REPORT FROM THE COMMITTEE ON PUBLIC ENTERPRISES OF THE PARLIAMENT OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA ______Date/Name of the Major Issues/Problems Discussed Comments by the Sub Committee Institution and & Decisions Ministry
1. Some objectives had not been 1. Action Plan should be included in the Corporate Plan prepared annually based on the Corporate Plan 13th October, 2010 2. Two projects worth Rs. 2. Since the money is deposited National 1,429,698/- had not been in the Ministry Account & Engineering implemented due to technical the Central Bank account, Research & problems & lack of specific action should be taken to Development instructions from the donor implement those projects Centre – (NERD) agency very soon
(Ministry of Technology & 3. NERD had spent only a little Research) money for research & 3. This situation had occurred development work due to lack due to the Poor salary scales of engineering staff to the Engineers
4. Annual reports from 2003 to 2005 & from 2008 to 2009 4. Directed to table all had not been tabled in outstanding annual reports Parliament early
1. Corporate Plan & Action Plan 1. Directed to prepare the had not been prepared corporate plan in accordance with the PED circular
14th October, 2010 2. Most of the stadiums had 2. A new methodology should been running at a loss be adopted when stadiums Sugathadasa are given on rent National Sports Complex 3. Out of Rs. 38,145,344/- of 3. To recover debtor balances Authority debtor balance, Rs. 25 million before the end of year 2010 was due from the SL Cricket (Ministry of Sports) Association, and discussions held were not fruitful.
4. Without staff being absorbed, 4. To discuss with the Cricket R. Premadasa Stadium had Association and get it solved been given on 30 years lease to SL Cricket Association and the Salaries to the Staff had to Contd... be paid by the Sports Complex
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______Date/Name of the Major Issues/Problems Discussed Comments by the Sub Committee Institution and & Decisions Ministry
Sugathadasa 5. Ownership should get National Sports 5. Without obtaining the transferred immediately Complex ownership, Sports Complex is Authority using several vehicles belonging to the other Institutions 6. Early action is needed to 6. Annual Reports for the years present the Annual Reports 2008 & 2009 had not been in Parliament presented to Parliament 7. Directed to meet once in 7. Audit & Management every 3 months Committee had met once for the year 2010 1. Annual Report for the period 1. Directed to table the Reports 2007 – 2009 had not been within 2 weeks tabled in Parliament
3rd November, 2010 2. 28 employees had been 2. Directed to see the deployed on contract basis at possibilities to make them sales outlets in Peradeniya, in permanent with the approval National addition to the approved of the Dept. of Management Agricultural cadre, and they are paid out of services Diversification & the daily income of the sales Settlement outlets 3. Wrong procedure had been Authority adopted, and the Corporate 3. Corporate Plan had been plan should be prepared for (Hadabima prepared on yearly basis, the longer period of the Authority) instead of preparing it on long Institution term basis. (Ministry of 4. Authority must be vigilant Agriculture) 4. Two buildings had been before the construction had constructed by the Authority taken place without the legal ownership of the lands and later action had been taken to acquire those 5. Legal action recommended lands by the Committee against the Youth Services Officer at 5. Serious fraudulent act had Ududumbara, Divisional taken place while distributing Secretariat & any other of 14 Persian cattle, neither it officer involved in this had been given as per the regard approved distribution list nor transferred to Ududumbara Directed to submit a report divisional secretariat as per to the Committee within the requirement one month
133 REPORT FROM THE COMMITTEE ON PUBLIC ENTERPRISES OF THE PARLIAMENT OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA ______Date/Name of the Major Issues/Problems Discussed Comments by the Sub Committee Institution and & Decisions Ministry
1. Institute of Textile Apparel 1. Directed to submit the has been established as a winding up accounts early result of the amalgamation of 03rd November, Textile Training & Service 2010 Center and the Clothing Industry Training Institute SL Institute of Textile Apparel 2. Separate Annual reports had 2. To Table all outstanding been presented to Parliament annual reports (Ministry of before amalgamation Industry & Commerce) 3. New Director General will be 3. Action to be taken to expand appointed by January, 2011 the consultancy services & after obtaining approval for research facilities of the new scheme of recruitment Apparel Industry In Sri Lanka
1. Corporate Plan had not been 1. A new Corporate Plan is prepared as per the circular needed to be prepared and 03rd guidelines & some activities submit to the Committee November,2010 had not been implemented within 2 months and not updated annually SL Council for Agriculture 2. Identified shortcomings in the 2. Amendment to the Act is Research Policy present National Agriculture necessary to meet the present Research Policy requirement and (Ministry of improvement of Agriculture) infrastructure and communication facilities are emphasized in the new policy to be adopted
3. No Audit & Management 3. Directed to hold the meetings Committees were held for the without further delay year 2010
4. Legal action to be taken 4. Considerable number of against those who had project reports had not been breached the agreements and furnished as per the Project pointed out those agreements agreement should be only with the Research Officers Contd…
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______Date/Name of the Major Issues/Problems Discussed Comments by the Sub Committee Institution and & Decisions Ministry
SL Council for Agriculture 5. In contrary to the Act, 5. Directed to submit a report Research Policy Research Officers had been in respect of all irregular conducted their own projects and to take action to researches with foreign stop projects in such nature donors directly
6. Internal Audit Plan & Audit 6. Directed to furnish all such reports had not been furnished reports to AG in future to Auditor General
7. Annual reports for the year 7. To table all outstanding 2009 had not been tabled in reports in Parliament Parliament
8. To obtain the foreign funds, the executive director of the 8. Take action to stop such mal- council had signed practices immediately agreements with donor agencies without treasury approval
1. .Main objectives had not been 1. To reformulate a new included in the Corporate plan Corporate plan incorporating for the years 2010-2012 the main objectives of the 08th November, Commission 2010 2. Annual reports for 2004-2008 2. Early action is needed to Official Languages had not been presented to present the Annual report Commission Parliament 3. All funds from the foreign (Ministry of 3. Fund received from the donors should come through Official Languages foreign donors had not been the External Resources & Social included in the Financial Department and should be Integration) statement included in the financial statement
4. Normal practice of the 4. Accounting policy of the Commission is to remit the Commission should be income from the Government revised, present practice & non Governmental indicates a serious lapse of Organizations in a deposit the accounting system, Contd.. account which had not been directed to submit a report reflected in the Commission’s regarding all the income accounts received from the year 2005
135 REPORT FROM THE COMMITTEE ON PUBLIC ENTERPRISES OF THE PARLIAMENT OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA ______Date/Name of the Major Issues/Problems Discussed Comments by the Sub Committee Institution and & Decisions Ministry 5. A special allowance of Rs. 5. An illegal payment had been Official Languages 624,390/- had been paid for done by the Commission, Commission the years 2006, 2007 & 2009 Either to obtain the covering on pending approval approval or to recover from the officers concern 6. Allocation of Rs. 2.3 million had not been utilized for some 6. Programmes were not held programmes as planned by the due to the non functioning of Commission the Board of Governors
1. The researches had been 1. Obstacle to recruit staff was delayed due to existence of the low remuneration paid to 08th November, 46 vacancies in the Institute. them. Self generated funds 2010 The salaries & cadre had been paid as allowances Committee had turned down to the staff to overcome this the request of increasing the situation which was Arther C. Clarke salaries appreciated by the Institute for Committee Modern Technologies 2. Audit & Management 2. Directed to hold the meetings Committee had not been as soon as possible (Ministry of appointed for the current year Technology & due to the unawareness of the Research) composition
3. Observed the delays in the 3. pointed out the importance of incubator project having collaboration with the health sector
4. Annual reports had not been 4. To table the Annual Reports tabled for the years immediately 2004,2005,2008 & 2009
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______Date/Name of the Major Issues/Problems Discussed Comments by the Sub Committee Institution and & Decisions Ministry
08th November, 1. Corporate plan for the year 1. Directed to get the approval 2010 2010-2014 had not been when the council meets in approved by the Council December 2010 Disaster Management 2. Annual reports from 2007- 2. Directed to take action to Centre 2009 had not been tabled table those Annual Reports including the 2010 Report (Ministry of 3. Audit & Management Disaster Committees had not been held 3. To appoint Audit & Management) due to non functioning of the Management Committees Director Board, participated after amending the ACT in the Ministerial Committees
4. Advance of Rs. 4 million had 4. Directed to maintain separate been erroneously accounted accounts for separate as for the National Safety Day projects otherwise it expenses out of which a misleads the situation portion had been spent for another project
5. National Disaster 5. Directed to submit copies of Management Plan & the all these reports to the AG National Emergency Operating Plan had been prepared and waiting for the concurrence of the Council
1. Contradiction between the 1. Directed to discuses with the Council & the Management higher officials and get the 10th Services Department in scheme of recruitment November,2010 respect of the name of the finalized. council, which made delays National Council in promotions and the for Elders recruitments for 5 years
2. long delay in presenting 2005- 2. Annual reports should be 2009 Annual reports in tabled in Parliament at the (Ministry of Social Parliament prescribed period of time Services) 3. No Internal Audit unit is 3. To get the assistance of the functioning in the Council Ministry Internal Audit
4. Audit & Management 4. Audit & Management Contd... Committee had not been Committee should be
137 REPORT FROM THE COMMITTEE ON PUBLIC ENTERPRISES OF THE PARLIAMENT OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA ______Date/Name of the Major Issues/Problems Discussed Comments by the Sub Committee Institution and & Decisions Ministry appointed appointed after appointments to the Director Board
5. Corporate plan had not been 5. A New Corporate Plan updated for the period 2004- including all activities should 2008 be prepared for the period National Council 2011 – 2016 for Elders 6. A Fixed Assets Register had 6. Fixed Assets register should not been maintained be audited & submit to the Committee within 3 months
7. Around 8 lakhs of elders 7. Methodology should be Identity cards had been issued adopted to revalidate the by the Council identify cards annually
1. Annual Report for 2009 & 1. Annual reports should be 2010 had not been tabled in submitted to Parliament Parliament within the stipulated time 10th November, frame 2010 2. No Internal Audit unit in the 2. Ministry Internal Audit Sri Lanka Press council oversees the functions Council
(Ministry of Mass 3. Audit & Management 3. Be ensure to meet once in Media & Committee had met only once every three months information) for the year 2009
4. Even though the Council had 4. Directed to take action sent reminders to some News against those Institutions & papers to get registered or revise the registration fee renewed license, and poor response received from them
5. Complaints had been received 5. Action should be taken to by the general public which investigate & settle those are under review complaints within three months time
6. Observed that the Director, 6. Directed to participate in the Information had not Board meetings in future Contd... participated in the Board meetings
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Sri Lanka Press 7. Rs. 1.6 million had been in 7. Directed to obtain the Council fixed deposit accounts Treasury approval without the Treasury approval
8. Committee emphasized that 8. To enhance the standard & some news items written by the quality of the journalism, journalists would harm the necessity of setting up a general public & the country government institute to train journalists is identified
1. Audit & Management 1. To meet at least once in Committees had met only every three months time once in the year 2010
03rd December, 2. Form 2005 Annual reports 2. Before 10th December, 2010 2010 had not presented to directed to present all Parliament outstanding annual reports in Parliament Human Resource Development 3. Action had been taken to 3. Make aware of the general Council change the titles of some public regarding the changes skilled job categories of the job titles (Ministry of Youth Affairs) 4. Receipts & payments 4. Shortcomings occurred due amounting to Rs. 6,758,149/- to absence of professional spent for conducting capacity Accountant in the Council Development programmes had not been disclosed in the accounts
5. A consultant serving on 5. To submit a report to the contract basis in the Council Committee had obtained Rs. 264,475/- as salaries & allowances while working in another company
Contd…
139 REPORT FROM THE COMMITTEE ON PUBLIC ENTERPRISES OF THE PARLIAMENT OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA ______Date/Name of the Major Issues/Problems Discussed Comments by the Sub Committee Institution and & Decisions Ministry Human Resource 6. Rs. 15,051,075/- had been 6. Since no progress report Development given to another Govt. submitted by that Institution Council Institution to train 3780 directed to submit a report to persons with the consent of the COPE the Chairman violating the tender procedure
7. Ministry of Vocational & 7. Objective had not been Technical Training had achieved by the council provided Rs. 1.5 million to directed to submit a report to improve the awareness the COPE regarding that creation of the school leavers out of which Rs. 1,487,032/- had been spent for stage decorations, lightening & publicity 8. Directed to submit a report to 8. Rs. 1,545,765/- had been COPE spent on the preparation of the hand book on construction industries, only the draft English version submitted to Audit
1. Present position of the Board 1. As per the Gazette is enquired. notification of April 2010 May 23 rd 2011 Government had decided to wind up the Textile Quota Textile Quota Board. Board 2. Annual reports since 2006 2. The Committee directed to ( Ministry of had not been presented in prepare all the outstanding Industry & Parliament reports and to present in Commerce) Parliament without It was observed that out of further delay the total contractual amount of Rs.921,265/- a sum of The Committee was Rs.552,709 had been paid to a informed that it had been private audit firm to introduce decided to convert the an electronic monitoring system in order to facilitate system where the contractor the activities of the has failed to supply the institution. service
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1. No annual reports had been 1. Directed the CAO/AO to presented in Parliament after table completed reports in May 23 rd 2011 1999 Parliament within a period of one month. Sri Lanka National Freedom 2. Corporate Plan for the period 2. Directed to submit the from Hunger 2011-2013 had not been corrected one for approval Campaign approved by the Board of Directors due to short ( Ministry of comings Agriculture)
1. The Committee observed the 1. Action should be taken to May 23 rd 2011 following shortcomings. present all the outstanding Annual Reports in Manthai Salt Ltd. • Audited accounts for the Parliament early. period 2009/2010 had not ( Ministry of been presented to the Auditor Industry & General Commerce • Financial Accounts for the period 2010/2011 had not been prepared. • Annual Reports from the year 2008 had not been presented in Parliament.
2. A cash cheque worth Rs. 2 2. Directed to submit a report to million issued by the the Committee in this regard Company as a donation in and hand over the matter to favour of the Ministry of the fraud Bureau for further Industry & Commerce had not investigation been received by the Ministry.
The Committee was made aware that this has been done on the instructions given by the former Chairman of the Company.
141 REPORT FROM THE COMMITTEE ON PUBLIC ENTERPRISES OF THE PARLIAMENT OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA ______Date/Name of the Major Issues/Problems Discussed Comments by the Sub Committee Institution and & Decisions Ministry
1. There had been a debtor 1. To write off the amounts due balance of Rs.3.9 million and from the 2 tsunami victims May 24 th 2011 a credit balance of Rs.2.8 after obtaining necessary & million and as a result of approval. September 13th setting off of debtor balance 2011 against the credit balance only Rs. 01 million debtor balance Lanka Fabrics was remaining Limited 2. The Committee enquired 2. No action had been taken ( Ministry of State action taken regarding the regarding these issues. Resources & following matters. Directed to hand over these Enterprise allegations to the Fraud Development) • Purchase of Handlooms Bureau and submit a report valued at Rs.6.5 millions from within 2 weeks. the private sector violating Government procurement Lanka Fabrics would be re- procedure on the Chairman’s summoned within 3 months to influence review the progress. • Cash collection of show rooms being taken away by the chairman for private purposes • Improper use of petty cash imprest by the chairman for private purposes • The loan amounting to Rs.8 million obtained from the SME Bank not being properly utilized.
3. Amalgamation of Lanka 3. As It is not viable to maintain Fabrics Ltd. with Lak Sala as per Lanka Fabrics with its objectives & the Cabinet decision. available resources, the Cabinet had approved a VRS in respect of the 5 officers and with the willingness of the other 3 officers, directed the Treasury to submit a Cabinet paper seeking approval to absorb those 3 officers to the Ministry of Industries for which Lanka Fabrics was earlier attached to.
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th May 24 2011 1. Following shortcomings 1. To take immediate action in were observed by the order to overcome these National Committee. shortcomings. Secretariat of Persons with • Disabilities Corporate Plan, had not been prepared • No internal audit division had been functioning. • Audit & Management ( Ministry of Social Committee meetings had not Services) been held regularly. • Certain appointments which had been made without the approval of the Dept. of Management Services.
As per the Cabinet decision ,8% of the income of Supiri Wasana Sampatha had to be given to the institution for the benefit of persons with disabilities.
2. The Committee brought to 2. The CAO/AO was directed the notice of the CAO/AO to look into this matter and that the supporting documents do the needful. on the following expenses had not been furnished to the audit.
• Donation of Rs.8,851,994/- sent to the District Secretariat- Jaffna • Rs.9,800,408/- given away for the repairs of the houses of the disabled persons. Rs.21,998,424/-given away for construction of houses
143 REPORT FROM THE COMMITTEE ON PUBLIC ENTERPRISES OF THE PARLIAMENT OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA ______Date/Name of the Major Issues/Problems Discussed Comments by the Sub Committee Institution and & Decisions Ministry
1. Annual reports for the year 1. To take early action to table May 24th 2011 2008 and 2009 had not been those reports together with
tabled in Parliament. that for 2010, in Parliament. National Institute
of Social 2. No Internal Audit division in 2. Carry out the Internal Audit Development the Institute functions by the Ministry
( Ministry of Social
Services)
1. It was observed that the 1. To expedite the tabling of institute had tabled Annual Annual Reports for the years Reports only up to the year 2009 and 2010 in Parliament. 2008.
2. Following shortcomings had 2. To prepare a fresh Corporate been observed in the Plan for the period 2011- Corporate Plan for the Period 2015 taking the new projects 2009-2013 and researches into consideration. • Not updated considering the May 30th 2011 current trends
• Organizational Chart with all Industrial the posts not included. Technology • Institute Operating results of three preceding years not analyzed.
( Ministry of 3. The committee noted that 04 3. As per the CAO/ AO’s Technology & explanation, these Research) officers employed in a project had been paid special allowances had been paid in allowances amounting to Rs. accordance with the Public 478,214/- without obtaining Finance Circular No.380 the treasury approval.
4. It was observed that an 4. The Committee stressed the amount of Rs.723, 257 had importance of obtaining the been incurred as welfare approval for the purposes as expenditure of the officers such. without the approval of the Dept. of the Public Enterprises.
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May 31st 2011 1. Delay in the presentation of 1. The CAO/ AO was directed Annual Reports in Parliament to present all the outstanding Sri Lanka annual reports in Parliament Institute of Tourism and Hotel 2. Corporate Plan had not been 2. Directed to submit the Management prepared. Corporate Plan for the period 2011-2016 to the Committee.
( Ministry of Economic Development)
1. Annual reports for the year 1. The CAO / AO was directed 2008 and 2009 had not been to expedite the process tabled in Parliament. without delay.
2. The Committee stressed the 2. To submit the revised fact that as the performance Corporate Plan without indicators were not available further delay in the Corporate Plan for the period 2009-2011, it had been unable to evaluate the activities. May 31st 2011
3. Internal Adit Programme had 3. Agreed to submit the Audit Sri Lanka net been submitted to the Programme to the Auditor Tourism Auditor- General. The post of General, once the vacant post Development Internal Auditor was vacant. of Internal Auditor is filled. Authority
( Ministry of 4. Audit & Management 4. Directed to hold the meetings Economic Committee had not been held as prescribed in the PED Development) regularly. Circular.
5. Enquired whether any action 5. The Committee directed to had been taken to recover submit a full report miscellaneous debtors of indicating the age analysis on Rs.11 million and Rs.12 this. million for the years 2008 and 2009 respectively. As the CAO/AO explained, that by April 2011 there was only Rs.18 million to be recovered.
145 REPORT FROM THE COMMITTEE ON PUBLIC ENTERPRISES OF THE PARLIAMENT OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA ______Date/Name of the Major Issues/Problems Discussed Comments by the Sub Committee Institution and & Decisions Ministry
1. Corporate Plan had not been 1. As the AO stated that the prepared by the Institute. Corporate Plan for the period 2012 – 2014 had been prepared and submitted to the line Ministry, the Committee directed the CAO/AO to submit same to the Committee and the Auditor-General
2. Approval of the Dept. of 2. The CAO/AO agreed to Management Services had not submit the revised cadre with been obtained for the staff the approval of the Board of cadre. Directors, to the Dept. of Management Services for
September 13th approval. 2011 3. As per the Management that Paranthan 3. The profits of the Company there had been certain Chemicals had been on the gradual difficulties in the past and Company Ltd. decline. although their income had gone down as a result, up to (Ministry of State June 2011, the Company had Resources & been able to obtain a profit of Enterprise Rs. 8 million Development)
4. Production process of the 4. Production activities of the Company was stopped due to company are queried. terrorist activities, and at present company is in progress.
5. The Committee observed that 5. Directed the CAO to look the lorry bearing No. WP- LH into this matter and to submit 7916 had been obtained on a report indicating whether the basis of monthly rental of proper tender procedure had Rs. 173,000 on a 3 year lease been adopted and the agreement, and this vehicle chairman had been instructed had been registered under the to rectify this matter since he name of the present Chairman had violated the Company of the Company. Act.
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September 16th 1. To hold at least one meeting 1. The Committee queried about 2011 in every three months time the not holding the Audit &
Management Committee Sri Lanka meetings. Accreditation 2. Delay in submitting audit Board for 2. No permanent staff in the reports, and agreed to submit Conformity Internal Audit, and also half them early. Assessment yearly audit reports had not been furnished to the Audit as per the Finance Act 38 of 1971. ( Ministry of 3. Directed the CAO/AO to Technology & 3. Corporate Plan for the period take action to update it Research) 2011 – 2015 had not been verifying the shortcomings prepared in terms of the PED pointed out by the Circular No. 12 of 2nd June, Committee. 2003. 4. As per the CAO/AO there
4. Asia pacific Accreditation had been only 03 major Corporation had pointed out issues, and those had been 33 shortcomings of the Board. corrected. Board had obtained the Membership of the Asia Pacific Accreditation Corporation & International Accreditation Corporation.
5. Training programmes had 5. It has been revealed that, due not been conducted as to the shortage of staff, the targeted in the Action Plan. Board could not conduct the training programmes.
6. Audit opinion had not been 6. This situation should be included in the Annual corrected in future. Reports.
147 REPORT FROM THE COMMITTEE ON PUBLIC ENTERPRISES OF THE PARLIAMENT OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA ______Date/Name of the Major Issues/Problems Discussed Comments by the Sub Committee Institution and & Decisions Ministry
1. 2008 & 2009 Annual Reports 1. Directed to take early action had not been tabled in to present them in Parliament Parliament.
2. Corporate Plan for the period 2. The CAO/AO was directed 2009 – 2013 had not been to revise the Corporate Plan prepared according to the as explained by the Auditor- PED/12 Circular. General and to submit to the Committee and the Auditor
General
3. Internal audit reports had not 3. Directed to submit the report been furnished to the audit very early and also to and the Internal Audit unit is streamline the functioning of not functioning properly. the Internal Audit
September 16th
2011 4. The Committee observed that 4. As per the explanation, due
a loss of Rs. 5,621,590 had to wind fire such a loss must Sri Lanka Cashew been incurred due to fire have occurred and further Corporation broke out in the Haggala & stated that over the past
Mahaoya seed gardens and in period, 100 acres of land in ( Ministry of Minor the Moneragala Estate, and Batticaloa was also Export Crop also serious damages had destroyed by wind fire. Promotion) been caused to the seed nursery and the cultivated land.
5. Cashew yield had been 5. Taken various steps in this dropped when compared with regard. that of private sector.
6. Considered on possible by- 6. Preparation of cashew wine products allied with the had been already started. It cashew fruit. was said more funds need to focus on other products.
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1. No permanent Chairman in 1. Earlier Chairman had retired the Company. and a new Chairman is yet to th be appointed. September 16
2011 2. All members of the Director 2. If the majority of shares are Board had not been present owned by the Government, West Coast Pvt for the COPE meeting. such institutions could be Ltd. summoned before COPE.
Secretary to the Ministry of (Ministry of Power & Energy) Power & Energy explained that, Attorney General had given a ruling that no provision in the Standing Orders to summon them. October 14th 2011 1. Annual Reports for the years 1. Directed to take early action 2005, 2007, 2008 & 2009 had to table all the Annual National Housing not been tabled in Parliament. reports gone in to arrears and Development the Annual Report for 2010 Authority before the end of 2011.
& 2. Procurement Plan had not National 2. To take action to submit been prepared. Equipment and early Machinery 3. Following shortcomings were 3. Directed to develop the Organization observed in the corporate plan Corporate Plan as explained (NEMO) by the Committee and to • Objectives as per the Act prepare the Action Plan Ministry of had not been included based on the Corporate Plan. Construction, • How the targets could be Engineering achieved was not made Services, Housing clear & Common Amenities
149 REPORT FROM THE COMMITTEE ON PUBLIC ENTERPRISES OF THE PARLIAMENT OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA ______Date/Name of the Major Issues/Problems Discussed Comments by the Sub Committee Institution and & Decisions Ministry 4. Sale of property at Liberty 4. Matter had been referred to Plaza to OVDC Institution the CID as per the previous COPE directive; however CID has informed no National Housing criminal offence had taken
Development place, therefore the Ministry Authority had referred this to the & Attorney General. It has been National revealed that, the former Equipment and Chairman & the Director Machinery Board had decided the value Organization without consulting the Chief (NEMO) Valuer.
5. As per the COPE directive 5. Land at Kirimandala Authority had not submitted Mawatha, Narahenpita had the required information, been sold to an Eco Housing directed to submit ; valuation Project for Rs. 75 million in obtained earlier on this land, 2004 on Govt. valuation & the directive given to obtain due to some problems another new valuation and the report valuation was taken in 2007 so received, and the cabinet i.e of Rs. 121.5 million, in approval to sell the land which Director Board & the with all other necessary Cabinet approval had been documents. obtained 6. Authority had faced a risky 6. Authority had incurred losses situation due to incurring continuously during the past 5 losses, directed the years. Management to pay more attention on this.
7. Large number of 7. To use those lands in a underutilized lands owned by manner to obtain revenue to Contd... the Authority. the Authority and submit a detailed report regarding the lands belonging to the Authority island wide.
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8. NEMO also had incurred 8. Decision had been taken to losses during the past 5 years. amalgamate NEMO with the State Engineering
National Housing Corporation as a separate Development division. Authority
& 9. An estimated loss of Rs. 9. Directed to send a report on National 1,000 million had incurred as this. Equipment and a result of not following good Machinery management practices, with Organization regard to the housing project (NEMO) at Darley Road
October 14th ,2011 1. Corporation had submitted a 1. After going through the State Development new Corporate Plan very document Auditor General & Construction recently to the Auditor would give the comments. Corporation General. 2. Auditor General was not
2. Construction revenue had not satisfied with the prepared (Ministry of been prepared in accordance Accounts, directed to discuss Construction, with the SL Accounting with the AG for further Engineering standards. clarification. Services, Housing
& Common Amenities) 3. Annual reports from the year 3. Directed to table all 2007 had not been tabled in outstanding reports before Parliament. the end of the year.
Contd…
151 REPORT FROM THE COMMITTEE ON PUBLIC ENTERPRISES OF THE PARLIAMENT OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA ______Date/Name of the Major Issues/Problems Discussed Comments by the Sub Committee Institution and & Decisions Ministry
4. Due to non availability of 4. A team of officials had been original receipts of the appointed to investigate the deposits made by the receipts & to rectify the State Development Corporation in external matter. & Construction Institutions, amounting to Rs. Corporation 2,755,878 in 2009 & Rs. 4,204,247 in 2010, it had been doubtful to trace them.
5. Rent of Rs. 9.2 million and 5. Out of Rs. 9.2 million, Rs. Rs. 27 million in Devcoshowa 7.2 million had been Company . received as dividends. Management has agreed to obtain Rs. 27 million, once the Liquidation had taken place
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______Date/Name of the Major Issues/Problems Discussed Comments by the Sub Committee Institution and & Decisions Ministry
1. Annual Reports had not been 1. To expedite the presentation tabled for the year 2008. of reports
2. Due to non availability of an 2. Internal Audit unit had not Internal Auditor, this unit been established. Post of had not been established and Internal Auditor had fallen agreed to hold the meetings vacant. after recruitment had done.
3. 04 vacancies had been filled 3. Commission should be without the approval of the abide-by the Management Salaries & Cadre Commission Services Circulars even and 18 officers had been paid though there is a provision. 17th October,2011 on the same grounds. The CAO/AO stated that they had Public Utilities done so, as per the provisions Commission laid down in the Act.
(Ministry of 4. Legal position of the Finance & Commission as a regulator of 4. At present the Commission Planning) water, electricity & petroleum has the Authority over the industries was enquired by the Electricity Industry and Committee. amendment to the Acts should be carried out to have
the regulatory powers of
water & petroleum industries
153 REPORT FROM THE COMMITTEE ON PUBLIC ENTERPRISES OF THE PARLIAMENT OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA ______Date/Name of the Major Issues/Problems Discussed Comments by the Sub Committee Institution and & Decisions Ministry
1. Annual Reports for the years 1. To take action to table all 2008 & 2009 had not been outstanding Annual Reports tabled. in Parliament
2. Out of the 32 farms, 15 farms 2. Most of the farms incurred had incurred a loss of losses are in the dry zone Rs.80,861,214/-. areas. Directed to take action to make them profitable.
3. Trade debtor balance up to 3. It has been revealed that Rs. 2010 had been Rs. 15 million 9 million debtor balances have to be recovered including the bad debts. Directed to write off the balances which could not be traced after taking necessary approval. October 17th 2011
4. Enquired the position on the 4. This fraud had taken place National Livestock shortage of food & cash over a period of time & Development amounting to Rs.900,000/- NLDB had handed over this Board matter to the Legal
Authorities. (Ministry of
Livestock & Rural 5. Dishonored cheques 5. Matter has been handed over Community amounted to Rs. 02 million to the CID. Development)
6. The Committee appreciated the high standards maintained by the new Management, although there had been lapses in the past.
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1. Annual reports for the years 1. To take early action to table 2009 & 2010 had not been both reports tabled in Parliament.
2. Audit & Management 2. Directed to hold meetings Committees had not been held quarterly for the year 2011
3. A Number of shortcomings 3. Directed to prepare the were observed in the Corporate Plan in a way of a corporate plan for the period rolling Plan and to revise it 2011-2015 and it had not been annually approved by the Board of
Directors.
4. Differences had been 4. Directed to reconcile the differences in the 2011 October 17th 2011 observed in the General accounts Reserve Account, Capital
Institute of grant Account, and the Fund
Technology Account
5. Students intake had been 5. As per the AO, with the Ministry of Higher increased only from 350 to present facilities available Education 360 in the year 2010 Institute could not increase
the student intake
6. A large amount of Capital 6. Directed to make use of grant had been underutilized. grants in full.
155 REPORT FROM THE COMMITTEE ON PUBLIC ENTERPRISES OF THE PARLIAMENT OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA ______
Appendix E
PARLIAMENTARY SERIES NO. 119
______
Appendix E
Issues discussed at the meetings of the Sub Committee III (Education & Health) of the Committee on Public Enterprises
Date/ Name of Major Issues and Problems Comments by the Sub Committee and Institution and Discussed Decisions Ministry July 22nd 2010 1) Student drop out rate being increased. 1) Directed the Institute to discuss with the Ministry of Higher Education, University Grants Institute of Indigenous Commission and University of Colombo to find Medicine a solution and advised them to revise the curriculum in accordance with the global (Ministry of Higher market. Education) 2) A sum of Rs. 712,812 obtained from the WHO, 2) The Committee was dissatisfied over the had been retained in a current account from 2006 situation and directed to submit a report. to 2009.
3) UGC granted Rs. 2 million and Rs. 500,000 in 3) The Committee directed the institute to two instances for development of IT unit and correct the situation and to report back to the construct counters respectively but the institution Committee. had not fulfilled the objectives.
4) Rs. 496,250 being incurred as lawyers fee paid 4) Full report was called from the CAO on this to private lawyers without getting the services of matter. the Attorney General’s Department, on certain court cases. 1) The Committee observed that the net profit of 1) The Committee suggested adopting a new the Corporation had been decreasing gradually. methodology to increase the income of the regional sales outlets. 2) Recovery of debts was unsatisfactory. Some 2) The Committee was not satisfied about the July 22nd 2010 debts had been existing since 1999. situation and directed to certain corrective
measures to be taken to streamline the position. Sri Lanka Ayurvedic Drugs Corporation 3) The Committee considered the present position 3) The Committee was of the view that the of the accounting package which is being used by situation should be corrected and directed them ( Ministry of the Corporation prepared by a private company on to report back to the Committee with the Indigenous Medicine ) a payment of a large some of money. agreement between the Corporation and Software company to see whether the company had acted accordingly.
August 10th 2010 1) Institution had taken the value of a land and 1) The Committee directed the CAO/AO to buildings thereon of which the legal ownership regularize this matter. Sri Lanka Institute of had not been vested to them, into their accounts Advanced Technological 2) The Committee noted that the institution had 2) The Committee stressed that the verbal Education recruited 3 Accountants, on an adhoc way, without approval can’t be treated as valid, advised the getting the required written approval from the CAO to look into this matter and obtain the ( Ministry of Higher Treasury. written approval. Education )
156 REPORT FROM THE COMMITTEE ON PUBLIC ENTERPRISES OF THE PARLIAMENT OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA ______
Date/ Name of Major Issues and Problems Comments by the Sub Committee and Institution and Discussed Decisions Ministry 1) The Committee noted that financial authority 1) Directed CAO/AO to act in accordance with had not been delegated to the Officials from the the financial regulations. year 2007.
August 11th 2010 2) Organizational chart had not been registered 2) The Committee directed the CAO/AO to with the approval for the scheme of recruitment regularize this and to get the approval from the National Transport not obtained. Treasury. Medical Institute
( Ministry of 3) Recovery of Rs. 415,000 and Rs. 3,847,091 3) No action has been taken to recover the Transport) from Metropolitan Bus company and the Kalutara money. Driving School, not being done.
4) Asset Register had not been updated. 4) Directed to update the register.
5) The board of survey reports and the reports 5) Attention of the CAO/AO was drawn in this. pertaining to the value of stocks of the head office and branches, not being submitted to the Audit. 1) The Committee observed that there had been 1) The Committee stated that the Institute could variances between the budgeted figures and the have made this in order, by a supplementary actual figures. estimate or having a separate vote for this kind August 11th 2010 of unexpected expenses.
Postgraduate Institute 2) The Committee noted that the shortages of 2) The Committee enquires what action had of Archeology books were occurred in the library. been taken by the Institute. The CAO/ AO stated that they had planned to computerize. ( Ministry of Higher Education ) 3) There had been a delay in releasing examination 3) The Committee was not satisfied about the results. situation and directed the CAO/AO to adopt a new methodology.
1) The Committee had observed the following . major short comings of the Council. 1) The Committee directed to discuss all the matters with the Hon. Minister concern and • Audit & Management Committee had not advised to rectify the shortcomings. been appointed. September 15th 2010 • Annual reports had not been tabled in
Parliament from the inception Homeopathic Medical
Council • Corporate Plan, Annual Action Plan & ( Ministry of budget had not been prepared Indigenous Medicine )
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Date/ Name of Major Issues and Problems Comments by the Sub Committee and Institution and Discussed Decisions Ministry 1) The Committee noted that the Fixed Assets 1) The Committee directed to update the Fixed Register was not properly updated. Assets Register in accordance with the Sri Lanka Accounting Standards.
September 21st 2010
Postgraduate Institute 2) The Committee noted that the Inventory items 2) The Committee observed that the physical of Medicine valued at Rs. 8.7 million purchased by the institute verification was not done so far.
had been issued to external parties. ( Ministry of Higher
Education )
3) Without obtaining the approval from the 3) The Committee stressed their dissatisfaction Treasury the Institute had invested money in fixed over it and advised to take requisite approval deposits. before deposit money.
1) The Institute had not taken action to fill the 59 1) The Committee was of the view that this was vacancies owing to the lack of knowledge on a clear negligence of the Treasury representative circular instructions. on the Board of directors and stressed that he/she should have enlightened the institution properly.
2) A contract worth Rs. 1.6 million for the 2) The Committee was dissatisfied over the renovation of the sewerage system had been situation and CAO/AO agreed that such granted without signing an agreement. shortcomings would not occur in the future.
3) Without following proper procurement 3) Satisfactory explanation was not given. procedures, the institution had hired two motor September 21st 2010 vehicles.
National Science 4) Rs. 24.8 million which had been spent for 186 4) The Committee observed that the follow up Foundation projects. action on research grants had not been adequate
and the respective ledger had not been updated ( Ministry of and computerized. Technology & Research ) 5) After obtaining research grants of Rs. 586,160 5) According to the signed agreement, they are two lecturers had vacated posts and gone abroad permitted to hand over the research to other without refunding the money. person in the team, but in this case, even that was not happened. The CAO/AO agreed to introduce new clauses into the agreements to overcome such situations.
6) Two projects involving US $ 78,000 for the 6) The Committee noted and advised the improvement of the management of the coastal CAO/AO that the officials had to be more system. The CAO/AO informed due to the responsible and should take actions to minimize problem of co-ordination these projects were these types of shortcomings. halfway suspended and funds had to be returned to the donor countries.
158 REPORT FROM THE COMMITTEE ON PUBLIC ENTERPRISES OF THE PARLIAMENT OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA ______
Date/ Name of Major Issues and Problems Comments by the Sub Committee and Institution and Discussed Decisions Ministry September 21st 2010 1) EPF benefits had not been paid within three 1) The Committee directed the CAO/AO to Provident Fund for months to some of the employees, and noted that submit a report to the Committee within two Buddhist & Pali they had been invested EPF money in the fixed weeks time regarding this matter. University deposits and interest had been remitted after deducting the withholding tax. Whereas the ( Ministry of Higher interest should be deducted subject to providing Education ) tax report.
1) Only one student had been able to complete MA 1) The Committee directed the UGC Chairman September 28th 2010 degree course. to discuss with the Vice Chancellor, Secretary to the Ministry and other relevant officials and Postgraduate Institute ensure to adopt a new model, and also several of English information were called for.
( Ministry of Higher Education) 2) Contrary to the Establishment code a senior 2) The Committee was of the view that the PGIE Asst. Registrar had been paid Rs. 150,000 for should have taken approval from the UGC for covering the duties of an Asst. Registrar. such payments.
September 28th 2010 1) Annual report for 2008 and 2009 had not been 1) Directed to expedite. University of Colombo presented in Parliament. School of Computing
( Ministry of Higher 2) Underutilization of funds received under SIDA, 2) Only Rs. 26,019,570 had been spent Education) Ph.D programme Rs. 51,999,948. subsequently this moneys had been spent on the relevant objectives. 1) 83% of work of the proposed building for 1) The Dean of the Medical Faculty showed his clinical medicine of the faculty of Medicine had dissatisfaction regarding the construction. The been completed. Committee directed the CAO/AO to submit a report regarding this matter. 2) The Committee noted that the Rs.677, 575,541 2) The Committee wanted UGC Chairman to
had been invested in state banks without obtaining have a discussion with the Treasury officials and September 28th 2010 the Treasury approval. the Secretary to the Ministry regarding this University of Colombo matter. ( Ministry of Higher
Education ) 3) Annual Report for 2005 to 2008 not presented. 3) Directed to expedite.
4) Moneys not paid back by the officers went 4) Directed to report with more information abroad on educational purposes, breaching the agreements entered into.
1) Universities Provident Fund had incurred a loss 1) The CAO/AO explained that they had a net September 28th 2010 of Rs. 332,789 due to investing of money in a profit of Rs. 1 million. But the Committee was
private bank. of the view that, had they deposited money in Universities Provident the fixed deposits in the state banks they would Fund/ Universities have had more profit than this. Pension Fund 2) The Committee observed that the Provident 2) The CAO/AO stated that already they had
Fund had erroneously considered the other presented a Cabinet Memorandum to rectify the ( Ministry of Higher allowances for as computation of contributions. error. Education )
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______
Date/ Name of Major Issues and Problems Comments by the Sub Committee and Institution and Discussed Decisions Ministry 1) Difference of Rs. 14,670,645 between the fixed 1) The Committee directed to submit a report asset register and the subsidiary books and the not regarding this matter with copy to the Auditor submission of detailed schedules in respect of General. fixed assets valued at Rs. 124,217,913 made to October 1st 2010 the audit.
2) Outstanding balances of Rs. 2,508,406 2) The Committee directed to take action to National Youth remaining for a long period. recover as much as possible and to get the Services Council Attorney General’s opinion in this regard.
3) The Committee noted that the Buildings valued 3) The Committee directed to take steps to get ( Ministry of Youth at Rs. 88.2 million had been constructed on lands the ownership of the lands immediately. Affairs) not belonging to the council. 4) Investment of Rs. 4,032,360 had been made in 4) The Committee noted that they had not got the Youth Services Company Ltd. any benefit out of this investment.
October 1st 2010 1) The Committee noted that the outstanding 1) The CAO/AO brought to the notice to the & debtor balance is Rs. 156,082,438 and out of that Committee that the Ministry of Health had September Rs. 2,421,582 remained outstanding for 3 to 5 agreed to settle Rs.2.3 million within two 14 th 2011 years. months.
State Pharmaceuticals 2). Data Base system installed for stock control of 2). The CAO/AO stated that the supplier had Manufacturing the Corporation spending Rs. 13,744,174 had not agreed to install a new version free of charge Corporation been properly functioning.
( Ministry of Health )
1) The Committee discussed about the Corporate 1) The Committee directed to submit a Plan , objectives, and functions of the Center. Corporate Plan, even though its objectives are very limited.
2) The Committee observed that the Center had 2) The CAO agreed to look into this matter. not complied with the accepted Tender Procedures. th 3) Rs. 9.7 million had been invested in Pramuka 3) The Committee considered this as a loss to October 12 2010 Bank in 2002, but neither the interest nor the the Center.
principal amount had been able to be received by J.R.Jayawardana Center the Center. The CAO stated that it had been loss to for Historical Research, the Center. Archives and Library
The Committee observed that Rs. 57.8 million had Directed the CAO to invest these moneys in a ( Presidential been invested in non-governmental financial State Bank. Secretariat) institutions in the year 2008 in contrary to the circular No. PED/33. The CAO/AO stated that due to high interest rates, center had invested money.
160 REPORT FROM THE COMMITTEE ON PUBLIC ENTERPRISES OF THE PARLIAMENT OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA ______
Date/ Name of Major Issues and Problems Comments by the Sub Committee and Institution and Discussed Decisions Ministry 1) The Committee questioned about the investment 1) The Committee wanted a report with regard October 12th 2010 of Rs. 4 billion in National Wealth Corporation to the establishment of the National Wealth Company. Out of which no dividend received. But Corporation and their transactions. Mahapola Higher the CAO stated that they had received nearly a Education Scholarship bonus of Rs.300 million. Trust Fund 2) Find a methodology to recover the moneys 2) Directed the CAO to look into this. ( Presidential given to the students by way of grant when they Secretariat) are employed.
1) The Committee observed that out of 1) The Tenders had been called for and contracts Rs.205 M and Rs.193 M provided for the would be awarded end of this year. Committee October 12th 2010 construction of the hostel only Rs. 5.9 M had been considered this as a serious delay. spent for pre-preparation. The construction work University of Visual & had not yet been started. Performing Arts 2) The Committee observed that settlement of 2) The CAO/AO brought to the notice of the advance amounting to Rs. 648,144 had been Committee that they had recovered majority and ( Ministry of Higher delayed. there had been a balance of Rs. 59,000 / - to be Education ) settled and this could be settled at the end of this year. 3) 391 students qualified for the entrance not being 3) Due to closure of University for various enrolled up to 30th September. reasons this has happened. Theses students will also be enrolled in 2010. April 8 th 2011 1) The Committee observed that the construction 1) Directed to submit a full report to the of the Auditorium initiated in 2001, paying Rs.2.2 Committee very early, including also as to why National Institute of million to a consultant, had not been completed legal action had not been taken against the Co-operative yet. Consultant. Development
( Ministry of Co- operative & Internal Trade)
April 8 th 2011 1) Questioned as to whether any action had been 1) Directed to take action based on the National Institute of taken against the former chairman who had investigation report. Language Education & violated rules and regulations. Training 2) The Committee wanted the CAO/AO to send 2) Enquired about the present position of the the updated Corporate plan to the Committee. ( Ministry of National Corporate Plan Languages & Social 3) The Committee questioned the presentation of 3) The Committee directed the CAO/AO to Integration) Annual Reports for the period 2008-2010 in streamline the presentation of the annual reports. Parliament.
4) Auditor General pointed out that the Co- 4) Disciplinary action should be taken against operation rendered by the Institution towards the the officers responsible for this matter. officers of the Auditor General’s Department is very unsatisfactory. The Committee was very serious on this.
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Date/ Name of Major Issues and Problems Comments by the Sub Committee and Institution and Discussed Decisions Ministry April 8 th 2011 1) The Committee enquired as to what actions had 1) It has been revealed that the responsible been taken with regard to the act of fraud officer had been interdicted and actions had Gem & Jewellery committed by a Senior Manager. been already taken to file a case against him. Research & Training Institute 1) The Committee raised the following matters. 1) The Institute has ignored and disregarded the Government Circulars and directed to adhere to ( Ministry of • Out of Rs.36 million of treasury grants the Government Circulars instructions. Environment) only a very low percentage had been
utilized. . • Additional fuel claimed by the Chairman of the Institution contrary to the Para 02 of the Public Enterprises Circular No.50 of 28 July, 2008. • The salaries of the Staff being increased by the Chairman without the approval of the Department of Management Services. • The director General of the Institute had taken a number of duty leave, without forwarding the programme. April 8 th 2011 1) Observed that the Annual Reports for the years 1) Directed to present all the outstanding reports 2005, 2008,2009 and 2010 had not been presented and to present in Parliament without further in Parliament delay. Central Cultural Fund 2) Enquired as to why 1330 cheques for the value 2) The Committee seriously considered this as a ( Ministry of Culture & of Rs.72,851,419 had been written when the bank clear violation of financial regulations. the Arts ) had no sufficient money and as to why action had not been taken on cheques issued that had not been presented for payment for over 06 months.. April 8 th 2011 1) Annual Reports since 2007, had not been 1) Directed to present all the outstanding reports presented in Parliament . in Parliament without further delay.
Institute of 2) Actions had not been taken to recover 2) Directed to submit a full report in this regard. Construction Training outstanding balances from NEMO, CHPB and However the CAO stated that recovery of debt & Development other institutions amounting to Rs.114.5 million, from NEMO is doubtful. Rs.4.1 million and Rs.2.5 million respectively. ( Ministry of 3) Actions had not been taken to recover VAT 3) Responsibility of recovering dues should be Construction receivables amounting to Rs.1,128,270 from the assigned to the treasury representative on the Engineering Services, Dept. of Inland Revenue. Explanation is that even board. Housing and Common though it was reminded, the Dept. of Inland Amenities) Revenue evades, the payment.
4) Due to unavailability of the original receipts 4) Directed to discuss with the Treasury and get with the Institute, it was doubtful, to recover Rs. cleared. 1,722,563 of deposits made with external Institutions. April 8 th 2011 1) Even though the Corporate plan for the period 1) The Committee pointed out that as the 2011-2015 had been submitted, it had not been institute was continuously running at a loss. compatible with the budget and also the Action Existence of a proper Corporate Plan is very Thurusaviya Fund Plan is not in line with the Corporate Plan. vital.
( Ministry of Plantation No Corporate Plan for the previous year had been Industries) prepared. 162 REPORT FROM THE COMMITTEE ON PUBLIC ENTERPRISES OF THE PARLIAMENT OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA ______
Date/ Name of Major Issues and Problems Comments by the Sub Committee and Institution and Discussed Decisions Ministry April 8 th 2011 1) Action plan for 2010 was not compatible with 1) A proper Corporate Plan should be prepared. either the Corporate plan or the budget and moreover, the institute had been unable to achieve National Institute of some of the targets in the previous Corporate Plan. Plantation Management 2) Non existence of internal audit division in the 2) Audit is done by the internal audit of the institute and the non-receipt of internal audit report ministry and CAO/AO was directed to send the ( Ministry of Plantation by the Auditor General. reports to the Auditor General in time. Industries) 3) New strategies of Tea plucking introduced to 3) Tea pluckers need to be trained ensuring the the workers in the field, is questioned. durability of tea bushes. 4) Reduction in number of courses and the number of students participated in 2009.
Reason for reduction of courses was due to shortage of staff. As the industry was in a problem due to world economic crisis, the industrialists did not want to enroll these employees in training programme. April 8 th 2011 1) Corporate Plan had not been reviewed since 1) The CAO/AO agreed to take necessary steps 2008 in terms of the section 5:1:3 of the Circular to revise the Corporate Plan and the annual No.PED 12 of 02 nd June 2003 and the Action budget. Tea Research Institute Plan had not been prepared in order to meet the of Sri Lanka targets in the Corporate Plan and Annual budget also had not been prepared in line with the Action ( Ministry of Plantation Plan. Industries) 2). A sum of Rs.23,121,329 outstanding , caused 2).The Committee directed the CAO/AO to by breach of agreements by the officers who went write off the amounts from the books after abroad. obtaining the approval from the treasury.
3) Legal action had not been taken against the 3) Since these lands were being cultivated by external parties encroached an extent of 17.675 these people over generations, the Committee hectares of land belonging to the Tea Research directed to submit a detailed report within a Institute. period of one month. April 29 th 2011 1) The Committee observed the following 1) To set up an Advisory Board to prepare a shortcomings. comprehensive report indicating future programmes, and submit to COPE within one Skills Development • Expenditure incurred on skills month. Fund Limited development had been at a very low level. • Number of Board Meeting held had been ( Ministry of Youth decreased. Affairs & Skills • No difference in the training programmes/ Development work shops held by the fund. • The Audit & Management Committee had not been conducted properly.
April 29 th 2011 1) Following shortcomings were observed in the 1) Corrective measures to be taken. fund Lady Lochore Loan • Corporate Plans, Action Plans had not Fund been submitted to the audit for 2009 and 2010 ( Ministry of Finance • Delay in submitting financial statements & Planning) to the Audit. Contd… • Non performing loan balances for over Lady Lochore Loan 10 years 163 PARLIAMENTARY SERIES NO. 119
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Date/ Name of Major Issues and Problems Comments by the Sub Committee and Institution and Discussed Decisions Ministry Fund • Number of vacancies not filled
2) Main objective of the Fund is to provide short 2) Priority should be given to the employees term loans to relieve indebtedness of the who draw lower salaries and to extend this loan Government officers scheme to other districts too.
April 29 th 2011 1) Enquired about the presentation of annual 1) All the Institutions funded by the Treasury, Information & reports to Parliament. As a practice, ICTA submits should present their Annual Reports in Communication Annual Reports to Registrar of companies and Parliament. The Committee directed to prepare a Technology Agency of General Treasury. comprehensive report obtaining advice from the Sri Lanka Ministry of Finance regarding the presentation of annual reports in Parliament. ( Ministry of Tele 2) Corporate plans had not been submitted. 2) The Committee wanted the CAO/AO to Communication & prepare Corporate plans for the period 2010- Information 2015 indicating the programme of work to be Technology) implemented in the next couple of years.
April 29 th 2011 1)The Committee observed that the Bambalapitiya 1)The Committee directed the CAO/AO to Show Room had been closed and sold to a private prepare a comprehensive report with regard to party without obtaining the approval and the this transaction, to the Committee within two Sri Lanka Handicrafts buyer had been carrying out his business in the weeks time. Board premises without settling the balance payment of Rs.2.1 million. ( Ministry of State Resources & Enterprise 2) Required number of the Audit & Management 3) Directed to hold required number of Development) Committee meetings had not been held in the year Committee meetings as per PED Circular No.12 2010.
4) No Annual Reports after 2005 had been 4) The CAO/AO stated that the reports upto year presented in Parliament. 2009 had already been prepared and would be presented in Parliament as early as possible.
5) Number of unanswered audit queries. 5) Internal Auditor and the Accountant are responsible for answering audit queries in time.
6) Out of the total carder, 52% had been in the 6) Emphasize the requirement of preparing a management level and 17% engage in sales duties, new organization chart and carder to overcome affecting the work. the situation, VRS should be introduced to the rest.
April 29 th 2011 1) The Committee enquired the current position of 1) It had been decided by the Government to the institution lease out all the factories of the Corporation and Ceylon Ceramics that the institution would be abolished at the end Corporation of the restructuring process and compensation also would be paid, to the existing staff. ( Ministry of State 2) Questioned about the total debtor balance of the 2) Rs.26 millions had to be recovered and all the Resources & Enterprise Corporation. dues for creditors had been settled. Development)
164 REPORT FROM THE COMMITTEE ON PUBLIC ENTERPRISES OF THE PARLIAMENT OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA ______
Date/ Name of Major Issues and Problems Comments by the Sub Committee and Institution and Discussed Decisions Ministry April 29 th 2011 1) Several shortcomings were observed in the 1) Corporate Plan should be reviewed and Corporate Plan prepared for the period 2010 – amended to give realistic picture. National Insurance 2014. Trust Fund 2) A loan of Rs. 537 million granted by the strike, 2) It has been revealed that this loan had been ( Ministry of Finance riot & civil commotion & terrorism fund under provided with by the National Insurance & Planning) concessionary terms to the Galadari Hotel Ltd., Corporation at that time, and the Bank of and the interest thereon remained without being Ceylon had issued parata execution to the recovered over a long period of time. Galadari Hotel Ltd., since the Bank of Ceylon had been failed to recover this loan from the Galadari Hotel.
June 17 th 2011 1) Out of the total amount of financial provisions 1) Over the past years the Council had spent a received from the Treasury only a small amount bigger part of the money allocated to it, for the National Crafts Council had been utilized for the Craft Development, payment of salaries. But from 2011 an additional which is one of the objectives of the Council. amount of Rs.10 million had been allocated for ( Ministry of craft development. Traditional Industries & 2) It was observed that the training division had 3) Now they have built, their own building Small Enterprise been operated in a building rented out for a Development) monthly rental of Rs.24,000/- contrary to the Cabinet decision of 23.12.2008.
3) Council is continuously running at a loss. 3) Mainly depend on the Treasury allocation while making a small income by selling their products and rendering service.
4) No Internal Audit unit is functioning and the 4) Directed to recruit and Internal Auditor, early. post of the Internal Auditor has fallen vacant. The Committee expressed its dissatisfaction over the way of answering audit queries both in verbally and in writing by the Council. June 17 th 2011 1) Legal framework of the Institution was 1) Cabinet of Ministers has decided to transform questioned by the Committee. the Institution to a limited liability Company, Selacine Television but no action had been taken by the Institution Institute after submitting Articles of Association to Attorney General’s Department in 2009. A ( Ministry of Mass report has to be submitted within a month Media & Information) indicating the future plans.
2) Annual Reports had not been tabled in 2) Although the Annual Reports prior to the year Parliament since 2006. 2009 had not been prepared, the Annual Report for 2009 was under preparation for presentation in Parliament.
3) The Committee observed the following 3) Directed to take action to correct them. shortcomings. • Delay in submitting financial statements • A register of fixed assets not being Contd… maintained.
• Transactions valued at Rs.22,814,944 , Rs.26,187,747 & Rs.36,688,374 in the years 2005,2006 and 2007 respectively
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Date/ Name of Major Issues and Problems Comments by the Sub Committee and Institution and Discussed Decisions Ministry could not be vouched due to lack of evidence. • The approval not obtained from the Dept. Selacine Television of Management Services for the Staff Institute Cadre.
June 17 th 2011 1) The Committee queried about the expansion of 1) Cabinet had approved an amount of Rs. 152 the company’s activities. million for the Development and Expansion of Northsea Limited Northsea Ltd., by which they could increase the production by 300 M.tons of fishing nets per ( Ministry of annum, and also make 32,000 Nos. of people Traditional Industries & from fishing community benefited. Small Enterprise Development) 2) An amount of Rs.5.5 million had been borrowed 2) Directed to obtain the Treasury approval from the Paranthan Chemicals, Paddy Marketing before writing off. Board, GA etc. and enquired the reason. Explained that during the period 2001-2009 , as Northsea was running at a loss, this amount had been borrowed for a Tsunami Development Programme and all the details had been furnished to the Ministry for writing off this amount.
June 17 th 2011 1) The following shortcomings were noted in the 1) Directed to revise the Corporate Plan. Corporate Plan and the Action Plan Rakna Arakshana • Corporate Plan prepared for the period Lanka Limited 2007-2012 had not been in accordance with the PED Circular No.12 ( Ministry of Defence) • The organizational chart had not been included in the Corporate Plan
2) Although the Government has granted Rs.05 3) Directed to do the needful. The Committee million to the Company neither shares nor commended the good performance of the dividends had been declared to date on this grant. Company. June 17 th 2011 1) Certain short comings had been observed in the 1) Directed to submit revised copies of the Corporate Plan and the Action Plan. Corporate Plan and the Action Plan as pointed National Design Centre out by the Auditor General within two weeks.
( Ministry of 2) It was observed that a loss of Rs.335,000/- had 2) As the CAO/ AO stated that the technical Traditional Industries & been incurred on purchase of a Diesel Cab as the committee had rejected the lowest tender as the Small Enterprise lowest tender had not been accepted. tenderer had failed to provide the required Development) specifications. 3) Rs.4,018,738 and Rs.4,527,967 being receivable 3) The committee directed to see the possibility and payable had been disclosing in accounts to recover dues as much as possible before without being settled for last 5 years and enquired writing off and to submit report to the committee the reason for that. within 03 weeks time.
4) Laboratory in the Nattarampotha Project had 4) Directed to take appropriate action to recruit been idling due to lack of staff. required staff to overcome such difficulties.
166 REPORT FROM THE COMMITTEE ON PUBLIC ENTERPRISES OF THE PARLIAMENT OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA ______
Date/ Name of Major Issues and Problems Comments by the Sub Committee and Institution and Discussed Decisions Ministry 1) Following shortcomings were observed in the 1) Take action to prepare a fresh Corporate Plan, August 26 th 2011 Corporate Plan prepared for the period 2010 – taking the future targets into consideration. 2014. Tea Small Holdings Development Authority (i) Some of the objectives of the Authority had not been included in the Corporate Plan ( Ministry of Plantation Industries) (ii) Objectives indicated in the Corporate Plan had not been included in the Action Plan.
2) The Committee noted that out of the 2) With the approval of the Board of Directors, miscellaneous debtor balance of Rs. 108,825,873 the Authority had written to the Treasury for as at 31.12.2010 an amount of Rs.88,212,038 had their approval to write off only a part of that still been outstanding. and Rs. 74,001,948 out of amount, and that advice of the Attorney General that outstanding amount had been due from the had also been sought to take legal action to Tea Shakthi Fund. recover the rest of the amount.
3) Mobilization advances to be recovered as at 3) The Committee directed the CAO/AO to take 31.12.2010 had been Rs. 12,968,728. action to report with regard to these two contractors to the ICTAD of the Ministry of Construction, Engineering Services, Housing and Common Amenities, explaining the matter, and to report to the Committee on the action taken by the ICTAD about these two contractors 4)The Committee noted that out of Rs. 25 million 4) Directed to take legal action against these granted as loans to buy colour separation machines factories. to 5 factories in the private sector and 3 factories of the Tea Shakthi Fund in 1998, Rs. 21,640,455 remained unsettled as at 31.12.2010.
5) Action had not been taken to recover Rs. 5) Negotiations are going on. 9,873,192 from the Tea Small Holdings Development societies granted to purchase vehicles on hire purchase basis.
August 26 th 2011 1) Cabinet has decided to amalgamate National 1) To explore the necessity of the existence of Book Development Board with the National the Board, the Secretary of Ministry of National Book Library & Documentation Services Board Education had been directed by the Cabinet to Development Board of submit a detail report of action of the Board Sri Lanka
2) The Committee also noted the following 2) Directed to streamline the above ( Ministry of shortcomings of the National Book Development discrepancies. Education) Board.
(a) The Board of Directors had not met for a long time,
(b) The Corporate Plan had not been prepared,
(c) The building in which the books had been Contd… stored, had not been properly maintained causing serious damages to the books due to natural causes.
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Date/ Name of Major Issues and Problems Comments by the Sub Committee and Institution and Discussed Decisions Ministry (d) Action had not been taken to distribute the books among the schools. National Book Development Board of (e) National Book Policy had not been formulated, Sri Lanka (f) Clear answers to the audit queries had not been submitted.
August 26 th 2011 1) Since the Authority is governed by 2 Acts, 1) Act No. 34 of 2002 and the Act No. 14 of enquired the reason for that. 2010 are interconnected; Authority had to Civil Aviation function in accordance with the provisions laid Authority down in both. 2) Why Sri Lanka should not have a separate 2) Since Sri Lanka is too small to have a ( Ministry of Civil entity to conduct aircraft accidents Investigations. separate entity directed to find the ways and Aviation) means to implement such an entity.
3). A sum of Rs. 321,194,081 had been invested in 3). As per the CAO/AO the Authority receive Treasury bills and term deposits in 39 instances income from 03 main sources; without obtaining the requisite approval and enquired the source of Income. (a) Overseas Sales Surcharge, i.e. the amount of US $ 60 received for each ticket sold outside Sri Lanka.
(b) 2.5% being retained by the Authority from the Embarkation levy.
(c) The interest received on investing cash received from the above two instances 4). The Committee observed that as per the 4). The Committee directed the CAO/AO to Finance Act of 1971, the net surplus of the obtain maximum use of the money when Authority had to be credited to the Consolidated construction is in progress and also to do a cost Fund whereas the Authority had never done that analysis before purchasing the air craft and to from the inception, and the surplus as at obtain approval from the Treasury explaining all 31.12.2010 had been Rs. 609,650,657 their future plans.
August 26 th 2011 1) The Corporate Plan for the period of 2008-2012 1) Report to be sent regarding the procedure, had not been compatible with the objectives and followed when preparing the new Corporate Tea Shakthi Fund the Action Plan was not in accordance with the Plan. Corporate Plan. A new Corporate Plan for the ( Ministry of Plantation period of 2010 -2014, is now underway. The Industries) Committee was dissatisfied with the procedure adopted by the Fund when preparing the Corporate Plan.
2) The Committee observed that Annual reports 2) Report on the preparation and presentation of from Year 2005 to 2009 had not been tabled in the Annual Reports from year 2005 -2009. Parliament. 3) According to the Auditor General, the 3)Directed the CAO/AO to take action to rectify Committee observed that there was a large amount all these deficiencies, with the assistance of the of accounting irregularities that had been taken officials of the Auditor General’s Department. Contd… place in the Fund. 168 REPORT FROM THE COMMITTEE ON PUBLIC ENTERPRISES OF THE PARLIAMENT OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA ______
Date/ Name of Major Issues and Problems Comments by the Sub Committee and Institution and Discussed Decisions Ministry
The Committee also wanted the CAO to discuss Tea Shakthi Fund with the Hon. Minister about the functions and the Shortcomings of the Fund and have a policy decision whether to continue this Fund as a separate entity or to amalgamate with the Tea Small Holdings Development Authority and report to the Committee.
September 09 th 2011 1) The Committee observed that two vehicles had 1) Directed to submit a detailed report and if Sri Lanka been reported lost. The AO stated that theses theses vehicles are not found in the Ministry Sustainable Energy vehicles had handed over to the line Ministry with premises to make a complaint to the police. Authority the written evidence. Ministry informed that these two vehicles are not found in the Ministry. ( Ministry of Power & Energy ) 2) The Committee noted that Rs. 94,251,955 to be 1) Even though it is a separate entity, if this is a paid to the CEB had not been shown in the liability of the Authority this amount should be Accounts. The CAO/AO stated that these reflected in the balance sheet. The CAO/AO transactions not reflect in the Accounts, as the agreed to correct it. Directed the CAO/AO to Sustainable Energy Fund considered as a separate submit detailed report with regard to the financial body. Sustainable Energy Fund and Sustainable Energy Guarantee Fund.
3) Capital Grant adjustments amounting to Rs. 3) Directed to submit all relevant information 15,000,000 and project expenditure amounting to pertaining to this transaction to the Audit. Rs. 167.77 Mn shown in financial statement could Progress of this matter to be reported to the not be vouched due to the non-availability of Committee. proper documentation. September 09 th 2011 1) The Committee observed that a sum of Rs. 1) The Committee directed the CAO/AO to 15,391,201 had been spent during the period 1997 discuss this matter with the Treasury, the Ceylon Fertilizer – 2001 for construction of Bio Diversification Ministry of Agriculture and the Ministry of Co.Ltd. Centre at Ambuluwawa, where the Board of Cultural Affairs and take action to sort out this Directors had decided to write off this amount in 6 matter. years, as this land does not belong to the company, ( Ministry of Agrarian and also the Treasury approval had not been Services and Wild Life) obtained in this regard.
2) The Committee observed that a debtor balance 2)The approval of the Treasury had not been of Rs. 8,807,311 had been written off by the received even though a request made to that Company without obtaining the Treasury approval. effect. 3) The Committee noted that the amount 3) Had been referred to the Attorney General. receivable from the authorized dealers as at 31.3.2011 had been Rs. 23,217,583 out of which Rs. 9,002,484 had remained for more than 9 years.
4) The Committee noted that the amounts to be 4) The Committee directed the CAO/AO to recovered from the Govt. Institutions as at submit a report to the Committee indicating the 31.3.2011 had been Rs. 145,398,893 out of which amount to be written off from the Govt. Rs. 49,727,858 had remained for more than 9 Institutions, and the steps taken by the Company years. to recover these outstanding balances.
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Date/ Name of Major Issues and Problems Comments by the Sub Committee and Institution and Discussed Decisions Ministry September 1) Enquired about the action that had been taken 1) The Committee directed the CAO/AO to 14 th 2011 against the officers who committed the fraudulent report on the findings of the investigation. action on professional fees amounting to Rs. Sri Jayawardenapura 1,661,950. The CAO/AO stated that hospital General Hospital carried out a preliminary inquiry and handed over the case to the CID for further action. ( Ministry of Health)
2) No representation from the Auditor General’s 2) Directed to have a representation from the Department in the Audit & Management Audit. Committee.
3) The Committee noted that there had been non 3) The Committee directed the CAO/AO to moving stocks value of Rs. 16,700,623.The appoint a committee to look into this and arrive CAO/AO stated that these equipment had been at a proper decision. received from the inception and now not in usable condition.
4)Recovery of professional fee from the 4) Directed to introduce a mechanism having consultants. Proposals have been made to this consulted the respective parties. effect and the consultants have not agreed and two of them have resigned from the Board on this issue.
Fraud committed by an officer. Now the case has Directed to report on the findings been handed over to the CID
September 15 th 2011 1).The Committee queried about Annual Report 1) Annual Report for 2009 had been submitted for the past years. to the Cabinet for approval, and agreed to National Film complete the 2010. Corporation 2) Although actions had been taken to submit the 2) Directed to correct it. ( Ministry of Mass Corporate Plans for 2012 -2015 a number of Media & Information) shortcoming were pointed out. 3) The Committee observed the following 3) The CAO was directed to take early action to shortcomings/weaknesses in the National Film rectify these shortcomings except the recovery Corporation. of loans. (a) Delays in presentation of Annual Financial Statements
(b) Delays in replying to the audit queries,
(c) Responsibilities not being assigned to the officials to carry out the duties,
(d) Collection of debts being in a very unsatisfactory situation.
4). Loan amounting to Rs.500,000 had been 4). Directed to take legal action against the granted by the Corporation in the year 2009 to a Cinema hall. cinema hall when there had been a sum of Rs. Contd… 404,719 due from them since the year 2002.
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Date/ Name of Major Issues and Problems Comments by the Sub Committee and Institution and Discussed Decisions Ministry 5).The Treasury Representative informed the 5).The CAO/AO was directed to take early steps National Film Committee that Rs. 50 million had been approved, to submit the plan. Corporation but the Corporation had not submitted their Investment Plan to the Treasury to release these funds.
September 15 th 2011 1). Objectives indicated in the Act of in 1). Directed to submit the Corporate Plan and Corporation had not been included in the Action Plan to the Committee as well as to the Ceylon Fishery Corporate Plan prepared for the period 2011 – Auditor General after obtaining the approval of Harbours Corporation 2015, and also Action Plan had not been prepared the Board based on the Corporate Plan. ( Ministry of Fisheries & Aquatic Resources 2). Corporation had paid Rs. 2,791,215 as a 60% 2) This matter had been already referred to the Development) advance to a private company in July 2007, to CID and the Attorney General. The Committee supply 8 tanks valued each at Rs. 5,095,075, to the directed the CAO to hold an impartial inquiry Corporation. The tanks had not been supplied yet, and to take disciplinary action against the and also the files relating to the transaction had officers involved, and also to submit a detailed not been furnished to audit. report to the Committee.
3). Action had not been taken to recover the 3) The Committee directed the CAO/AO to amount of Rs. 2,209,251 given on credit basis for furnish a summary of the 44 court cases and the fuel. Corporation had filed 44 court cases, out of action to be taken in this regard to the which 34 had been with regard to recovery of Committee within 3 weeks time. payments. Directed to take corrective action very early. The shortcomings pointed out by the Committee at the previous COPE meeting had not been corrected. Opinion of the Auditor General had been a disclaimer. Accounting statements to be withdrawn due to shortcomings.
4) Hire charges had not been levied for loading 4) Action had been to recover that amount and sand to the lorries, thus the Corporation had the Corporation had already started levying the incurred loss around Rs. 21,000,000. hiring charges from the lorries
5) No effective duties had been carried out, even 5). To submit a comprehensive report on this after spending Rs. 224 million for the construction harbour to the Committee. at the Chillaw fishery Harbour.
September 15 th 2011 1). Corporate Plan prepared for the period 2010 – 2) Directed the CAO/AO to prepare the Action 2013 had not been approved by the Board of Plan in line with the Corporate Plan, and after National Institute of Directors. obtaining the approval of the council, to submit Fisheries & Nautical both documents to the Committee as well as the Engineering Auditor General. ( Ministry of Youth Affairs & Skills 2)Audit & Management Committee had met only 2) Directed the CAO/AO to see that it is met at Development) once in the year 2011. least quarterly, and to discuss all audit queries at the meeting, before submitting the replies to the Contd… audit.
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Date/ Name of Major Issues and Problems Comments by the Sub Committee and Institution and Discussed Decisions Ministry 3) Audit opinion was a disclaimer for period 2006- 3) Directed to consult the Auditor General. 2010 National Institute of Fisheries & Nautical Engineering 4) Enquired the current position with regard to Rs. 4) Action had been taken to obtain the approval 6,712,171 to be recovered from the student as to write off Rs.5.8 million out of the total course fee and hostel charges. amount. Directed the CAO/AO to obtain approval from the Treasury too.
5) Rs. 80,000/- had been paid to a Fisheries 5) To take action to recover this amount from Training Asst. to follow a Postgraduate course, the guarantors, and report back to the Committee where he had vacated the post, after following the course.
September 15 th 2011 1). The Committee observed that the 2008 & 2009 1). Directed to take action to table 2010 Annual Annual Reports had not been tabled in Parliament. Reports in Parliament, along with the backlog. Sri Lanka Standards Institute 2). The Committee enquired as to why the Audit & 2). The Committee directed the CAO/AO to ( Ministry of Management Committee had not been appointed hold the Audit & Management Committee Technology & for the year 2010. meetings at least once in every three months Research) time.
3). The cement imported by the Lucky Company 3). The CAO/AO stated that the SLSI issued the during the period 31st July, 2007 to 1st July 2011, SLS certificate to this Company only in the year were not in compliance with the SLS 2008, and that they had taken action to suspend specifications but had been released to the market their SLS certificate in the year 2010. on 47 occasions.
September 1). Observed that the Corporate Plan prepared for 1). Directed to submit all the information with 15th 2011 the period 2009 – 2013 had not been approved by regard to the above Corporate Plan to the the Board of Directors. Committee within two weeks. Marine Environment Protection Authority 2). Out of the approved cadre of 141, the actual 2) Directed to fill the vacancies. cadre had been only 87, and enquired the reasons ( Ministry of for not filling the vacancies. Environment)
3) Out of Rs. 15.6 million received as fines by the 3). With the approval of the Director Board, the Authority, a sum of Rs. 11.6 million had been Authority had used this money for an essential transferred to the non-current liabilities while Rs. 4 purpose, and wanted the CAO to obtain treasury million had been utilized for staff loan fund, approval. contrary to the Marine Pollution Prevention Act.
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Date/ Name of Major Issues and Problems Comments by the Sub Committee and Institution and Discussed Decisions Ministry September 1) Construction of a Resource Center in 1) The Committee directed to submit a detailed 15 th 2011 Kurunegala had been awarded to a contractor report on the above construction work and also without obtaining the TEC report and entering into to obtain a report from the Divisional Engineer National Child an agreement; the contractor had stopped the on this construction. Protection Authority contract half way. The AO stated that this had been awarded by an error and work to the value of only Rs. 82,880/- had to be completed. ( Ministry of Child Development & 2) The Committee discussed about the Children 2) Committee directed to submit a report Women’s Affairs) who affected from the Tsunami. Out of total No. including relevant information of the 264 of 2661 Children in 10 districts only 264 had been Children, action taken and the present position provided the Foster Parent facility, in terms of the of them. Names and the addresses of the balance Tsunami( Special Provision) Act No. 16 of 2005 2397 Children on the basis of the Divisional Secretariat and the present position of these children.
3) Of funds received for various projects Rs. 3) The Committee directed to submit a report 4,189,374 had been remained unutilized at regarding projects - Dialogue Housing Project, 31.12.2008. Tsunami Scholarship Assistance, Office of the High Commissioner for Australia, UNICEF Child & Youth Centre, ISPCAN Project, Office of the British High Commission and the USA University of Kelaniya. 4) National Policy on prevention of Child Abuse. 4) Its being prepared and the Child protection act is also being amended.
5) Assets amounting to Rs. 19,471,699 which were 5) Committee had been appointed to revaluate, fully depreciated as at 01.01.2011, being used and such valuation would be taken to accounts. without doing a revaluation.
September 1) Assets amounting to Rs. 641,175 had not been 1) The Committee directed to submit a detailed 15 th 2011 brought to the Head Office when the Authority report with regard to this matter. National Aquaculture was shifted to Pelawatta. Development Authority 2) Balances of assets and liabilities amounting to 2) The Committee directed the CAO /AO to ( Ministry of Fisheries Rs. 672,700,188 could not be satisfactorily follow these instructions properly. & Aquatic Resources vouched / verified or accepted in audit due to non Development) availability of necessary documents
Auditor General stated that it should be recorded in the inventory register, when the Authority brings an asset.
3) There had been an outstanding loan balance of 3) Directed the CAO/AO to do an age analysis Rs.17,245 ,513 and Rs. 2,017, 679 for more than 2 and take necessary steps to recover. and 5 years respectively.
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Date/ Name of Major Issues and Problems Comments by the Sub Committee and Institution and Discussed Decisions Ministry October 13th 2011 1) Only one Audit & Management Committee 1) Directed the CAO/AO to see that the meeting held in the year 2011. Committee meets at least once in every months’ Cooperative Wholesale time. Establishment
( Ministry of Co- 2) The Committee directed the CAO/AO to operatives & Internal 2) Auditor General had disclaimed the accounts summon the Board and review all these queries Trade) for last 5 to 6 years, even in 2010 accounts they and to submit clear answers to the audit. had not taken any action to rectify this situation.
The Auditor General added that 10 audit queries had been issued in the year 2010, but none of the queries had been replied by the CWE. Assistance given to the Audit officers by the CWE is very low.
3) The Committee observed 3) Directed to rectify all these matters and to make aware the Hon. Minister. i. a large number of properties not economically utilized
ii. Rs. 4397 million of bonds to be matured in 2016 in addition Rs. 4,063 million liabilities reflecting in the financial statements but these bonds not reflected in the accounts too.
iii. 88 employees not properly deployed.
October 13th 2011 1) Committee enquired the debtor balance and the 1) Directed to take every possible steps to CAO stated that as at today balance is Rs. 209 recover the debtors. STC General Trading million. Company Ltd. 2) Observed that the accounts for the years 2) Directed to submit the accounts to the audit ( Ministry of 2009/2010, 2010/2011 had not been rendered to before 30th April 2012. Co-operatives & the audit. Internal Trade ) 3) The Committee questioned about the revenue. 3) The Committee was of the view that the The CAO stated that revenue had gone up to Rs. progress of the STC had been satisfactory. 150 million per month.
October 18th 2011 1) Considering the performances, of the institute 1) The Committee suggested considering all the Committee observed that the institute had an these facts, that this company may be State Trading ( Co- operational loss of Rs. 3.2 million and Rs. 3.1 amalgamated with the Co-operative Wholesale operative Wholesale) million in 2010 and 2011 respectively. Establishment. Establishment Company Ltd. Auditor General also pointed out that the going concern of the Company is at a risk level. ( Ministry of Co-operatives & Internal Trade )
174 REPORT FROM THE COMMITTEE ON PUBLIC ENTERPRISES OF THE PARLIAMENT OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA ______
Date/ Name of Major Issues and Problems Comments by the Sub Committee and Institution and Discussed Decisions Ministry October 18th 2011 1) Registration of self employed personnel in the 1) The Committee directed the CAO/AO to see ETF was discussed under section 18 of the Act. whether they could expand this scheme, and to Employees Trust Fund The AO stated that they had entered into an submit a report to the Committee. Board agreement with the Samurdhi Authority in this regard. ( Ministry of Finance & Planning) 2)Contrary to the Treasury Circulars the ETF 2) Directed the CAO/AO to rectify this issue. Board had paid to the staff Rs. 69.5 million and Rs. 39.9 million as incentive allowance and holiday pay respectively.
3) A sum of Rs. 29,293,850 invested in Korea – 3) These investment had been a loss to the Ceylon footwear Company, Magpak and the institution. Veyangoda Textiles Company had been lost due to the liquidation of those company.
October 18th 2011 1) Discussed the pricing formula of drugs, the 1) Directed the CAO/AO to submit a report CAO /AO stated that up to 2001 ,the Consumer including the information what measures State Pharmaceuticals Affairs Authority had been regulating fixing adopted by the SPC to introduce the price Corporation prices, but the practice had come to an end since control and the rules and regulations adopted by ( Ministry of Health) 2001. the Consumer Affairs Authority and as to how this practice had ended.
2) Observed that out of stock of 135 million tablets 2) Directed to discuss this issue with Hon. of Ferrous Sulpahte, 74 million tablets had been Minister and other relevant authorities. issued to the patients through Medical Supplies Dept. at a time, National Drugs Assurance Laboratory had confirmed that the drug was substandard.
The CAO/AO stated that in certain instances the MSD had completed issuing of the drugs to the hospitals before reaching the quality assurance report and also the SPC doesn’t have enough laboratory facility to check each and every consignment.
3) Corporation paid Rs. 5.4 million and Rs. 4.1 3) To Correct the situation after discussing with million respectively for the years 2008 and 2009 the Treasury officials. PAYE tax of the employees.
4) Out dated and substandard drugs worth 4) Suppliers who supply low quality drugs be Rs.43,743,265 and Rs. 22,907,940 being written black listed. off.
October 20th 2011 1) Discussed about the Corporate Plan, Action 1) Directed the CAO/AO to rectify all these Plan, Procurement Plan and the Budget too. shortcomings pointed out. Palmyra Development Board ( Ministry of 2) Observed that Rs. 16.9 million had been 2) Directed to submit the necessary information Traditional Industries & incurred on plantation of seed, but progress had to the Committee and Audit too. Small Enterprise
Development ) not been made available.
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Date/ Name of Major Issues and Problems Comments by the Sub Committee and Institution and Discussed Decisions Ministry Palmyra Development 3) Capital grant has been spent in recurrent 3) Directed to have separate allocation for this Board projects for Palmyra handicraft training. projects
Contd. 4) Due to non availability of records, 29 items in the accounts amounting to Rs. 98,855,051 could not be satisfactorily vouched.
October 20th 2011 1) Observed, that due to accounting deficiencies, 1) The Committee showed their dissatisfaction Auditor General is unable to express an opinion. on the performance and the status of the National Library & institution and directed the CAO to regularize all Documentation i. 77 posts including the Accountant post had been theses matters. Services Board vacant.
( Ministry of ii. 2009 accounts had been in a weak position and Education ) 2010 accounts had not been submitted to the audit ii. Director General had been acting for over a period of one year.
iii. Corporate Plan, Action Plan and the Budget had not been prepared in accordance with the Treasury circulars.
The CAO admitted the lapses and agreed to take early action to rectify those matters.
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