Position Paper PROCESS OF COPE - FINDING THE GAPS AND IMPLEMENTATION OF RECOMMENDATION INTRODUCTION “I venture to say that every man who is not presumably incapacitated by some consideration of personal unfitness or of political danger is morally entitled to come within the pale of the Constitution” - William Ewart Gladstone (1864) Public accountability of 1public finance, is one of the cardinal principles of a participatory In Sri Lanka, there is no permanent functioning parliamentary democracy , which historically, in Finance Committee or Budget Committee in constitutional traditions are closely connected2 Parliament, but during the period resulting in the to civil liberties. As such, full control over public finalisation of the Budget, the entire Parliament, finance is constitutionally vested in Parliament. in essence becomes a Budget Committee, thus Financial oversight of the public purse is facilitated exercising financial oversight, prior to the approval by the Committee on Public Enterprise (COPE), of the budget. and the Committee on Public Accounts (PAC). This 3 position paper examines the workings of COPE. COPE, is a Parliamentary committee, which was established in 1979 to ensure that public funds 1. In Re the Thirteenth Amendment (1987) 2 SLR 312 2. Article 148 of the Constitution 3. http://www.parliament.lk [accessed on 17th November 2013] | 1 13 handled by public corporations and any other in COPE, carrying out legislative oversight of their vested undertakings were under the scrutiny of the own corporations . This raises further broad based public. To that end, COPE examines ‘the accounts of issues on principles such as bias/conflict of interest, public corporations and of any business or other and lack of separation of functions of the State. undertaking vested under any written4 law in the SCOPE, POWERS, & RESPONSIBILITIES OF COPE Government laid before Parliament’ and reports its observations and recommendations to Parliament. Since its inception, several COPE Reports have been 5 COPE is duty bound to examine accounts of public published by Parliament, the last of which examined corporations and of any business undertaking the financial accounts of 244 state institutions . 14 vested in the government , and in the15 course of its investigations, is empowered to summon any person The various public enterprises which COPE reports or record, and have access to property . Parliament on, draw their funds from the public purse. Thus, requires COPE to report to it from time to time on any mismanagement or corruption could have far the accounts examined, and the performance of the reaching effects, directly affecting the public. Due 16 public enterprises , thus exercising overall control to the nature and importance of the work done by over public funds. COPE, Transparency International Sri Lanka (TISL) presents this position paper. Though there are However COPE effectively limited its inquiries to many aspects of COPE, this paper limits itself to the an investigation of the institution’s accounts. This examination of the procedures followed by COPE, its relegated COPE to the position of reviewing past independence and transperancy. COMPOSITION OF COPE performance, without adequately engaging such institutions on an ongoing basis, to facilitate more satisfactory performance of such institutions. 6 There are certain exceptions to this, where COPE The Standing Orders of Parliament7 provide has initiated on sight investigations notably of for a committee of 12 members nominated by the Ceylon Petroleum Corporation pertaining to the Committee8 of Selection, with a quorum of 4 issues of contaminated fuel. This is indicative of an members . Subsequently this number has increased emerging practice to examine not only accounts, but to 31 with the9 quorum remaining at 4. The latest also the accountability of17 such institutions, in line COPE Reports , reflect 31 members10 comprising with the Standing Orders . There is thus a pressing COPE, several of whom are MinistersCommittee. This on position Public need, as borne out by the several COPE reports to Undertakingsis in stark contrast11 with similar mechanisms in date, that COPE be involved in risk management place in the region such as the 12 and mitigation of the institutions that come under in India, which excludes Ministers its purview,18 which is in fact within the scope of its from being a part of the committee . powers which will assist in ameliorating the losses that are being suffered by various public enterprises. In Sri Lanka, there is no provision excluding Such risk management will be assisted, by the Government Ministers from inquiring into the public insistence by COPE, of adherence to internationally corporations or business undertakings vested in accepted Accounting and Auditing Standards by the the Government. Thus is practice, in Sri Lanka, public enterprises. Ministers who supervise public corporations, sit 4. Standing Order 126 of Parliament 12. ibid proviso to Rule 312B 5. Second Report from the Committee on Public Enterprises 23rd July 2013 13. For example, the Ceylon Electricity Board, was one of the institutions noted 6. As amended up to February 26, 1993 available online http://www. in the latest COPE report, to be suffering “severe losses” and being “on the parliament.lk/files/pdf/standing_orders_english.pdf [accessed on 17th verge of a collapse” (vide page 4 of the COPE Report). The CEB comes under November 2013] the supervision of Pavithra Devi Wanniarachchi, the Hon. Minister for Power & 7. Standing Order 126(1) Energy, who is a member of COPE. Similarly, the Ceylon Fisheries Corporation, 8. Standing Order 126(6) which too was a loss making corporation, comes under the purview of 9. First & Second Reports from the Committee on Public Enterprises Presented Dr. Rajitha Senaratne, the Hon. Minister of Fisheries & Aquatic Resources by Hon.DEW. Gunasekara Chairman of the Committee On 1st of December, Development, who is also a member of COPE. 2011 & 23rd July 2013 14. Standing Order 126(2) 10. Example, Pavithra Devi Wanniarachchi, Hon. Minister of Power & 15. Standing Order 126(5) Energy, Susil Premajayantha, Hon. Minister of Environment and Renewable 16. Standing Order 126(3) reads; The Committee shall, from time to time, Energy, Rajitha Senaratne, Hon. Minister of Fisheries and Aquatic Resource report to Parliament on the accounts examined, the budgets and annual Development, Chandrasiri Gajadeera, Hon. Minister of Rehabilitation and estimates, the finances, financial procedures, performance and management Prison Reforms, Jagath Pushpakumara, Hon. Minister of Coconut Development generally of any public corporation or of any business or other undertaking and Janatha State Development, T.B. Ekanayake, Hon. Minister of Culture and vested under written law in the Government and on any matter arising there the Arts etc, information available online at http://www.priu.gov.lk/Govt_ from. Ministers/Indexministers.html [accessed on 17th November 2013] 17. ibid; which specifically refers to financial procedures, performance and 11. Established under Rule 312A of the Rules of Procedure & Conduct of management etc., 2 | TransparencyBusiness Internationalin Lok Sabha Sri (2010) Lanka 18. ibid However, as set out at the start of this section, COPE’s TISL notes that if there is an introduction of authority is limited to public corporations and mechanisms in which a continuous review process business undertakings vested in the government. of the public enterprises takes places, this would Under the Constitution, the Auditor General is assist in the better running of such institutions, and required to audit the accounts of all 19Government thus increase their financial viability. For instance departments and public corporations (including Annual Insolvency Certifications of such institutions various other bodies), and further, such corporations would not only assist COPE in its oversight, but also are required to annually table audited 20accounts in enhance accountability of the Directors and higher Parliament, in terms of the Finance Act . However, management of such public enterprises. Similarly, the Constitution permits the Minister in charge of Value for Money Audits, if conducted at regular any public corporation, with the concurrence of intervals, will ascertain whether there has been the Minister of Finance, and in consultation with an optimal utilization of available resources, to the Auditor General, to appoint qualified auditors21 achieve the intended aims of the public enterprise to audit accounts of public corporations, under the in question. Any lack of efficiency or effectiveness of directions and control of the Auditor General . such utilization of funds will be brought to light at regular recurrent intervals, thus assisting both COPE The Finance Ministry, which provides Parliament and the enterprise in question to mitigate losses in with a list of public enterprises, has on occasion the future. Such continuous review process would added government owned limited liability also assist in compiling a database of preventing companies, such as Mihin Lanka, and Lanka Logistics waste, corruption, etc., and such lessons learnt would & Technologies Ltd., to this list, thus bringing them assist the management of not only the enterprise within the purview of COPE. TISL notes that, in the in question, but other such enterprises across the overall framework of the Constitution, COPE should board. Such would assist in enhancing accountability so be permitted