Report from the Committee on Public Enterprises of the
Parliament of the Democratic Socialist Republic of Sri Lanka
Parliamentary Series
No….
of
The Seventh Parliament of
The Democratic Socialist Republic of Sri Lanka
(First Session)
THIRD REPORT
(for the period from 09thof October 2014 to 06thof March 2015)
From
The Committee on Public Enterprises
Presented by
Hon. DEW.Gunasekara
Chairman of the Committee
on 09th April 2015
Ordered by Parliament of Sri Lanka to be printed on
………………………
i
Parliamentary Series No…..
ii
Report from the Committee on Public Enterprises of the
Parliament of the Democratic Socialist Republic of Sri Lanka
Contents

Chairman’s Note………………………………………...

Preface……………………………………………………

Introduction……………………………………………...

Special Observations…………………………………….


General Observations…………………………………...

Status of Presenting Annual Reports to Parliament…..

Auditor General’s Opinion on Financial Statements…


Recommendations……………………………………….

Institutions Examined by the Main Committee

Financial Results of the Examined Institutions………..
Review on the Implementation of Recommendations...

Bank of Ceylon…………………………....................

Open University of Sri Lanka…………………….....

Housing Development & Finance Corporation Bank

Paddy Marketing Board……………………………...

Atomic Energy Authority……………........................

Airport & Aviation Services Ltd.……………………

Central Cultural Fund ……………………………….

State Timber Corporation………………………........

National Gem &Jewellery Authority……………….

Sri Lanka Institute of Development Administration....

University of Moratuwa…...........................................

Development Lotteries Board………………………..
Institutions Examined by the Sub Committee - I
…………………. iii
…………………. v
…………………. 01
…………………. 03
…………………. 07
…………………. 09
…………………. 11
…………………. 13
…………………. 17
…………………. 19
…………………. 23
…………………. 25
…………………. 27
………….............
29
…………………. 31
…………………. 32
…………………. 36
…………………. 38
…………………. 40
…………………. 42
…………………. 46
…………………. 48
…………………. 50
…………………. 51
…………………. 53
…………………. 54

Post Graduate Institute of Agriculture…………….....

Post Graduate Institute of English…………………...

Post Graduate Institute of Science…………………...

National Institute of Business Management…………

National Institute of Language Education & Training

Official Languages Commission.................................
…………………. 57
…………………. 59

Ayurvedic Medical Council………………………….
…………………. 59
…………………. 55
…………………. 56
i
Parliamentary Series No…..


*
ii
Institutions Examined by the Sub Committee – II
…………………. 61
…………………. 63

Sri Lanka Council for Agricultural Research Policy...

Hector Kobbekaduwa Agrarian Research & Training
Institute
…………………. 64

National
Aquatic
Development Agency
&
…………………. 66

Sri Lanka Land Reclamation & Development
Corporation
…………………. 68

National Aquaculture Development Authority............

Tea Small Holdings Development Authority..............

Tea Research Institute ….....................…...................
Resources
Research
…………………. 71
…………………. 72
Institutions Examined by the Sub Committee - III
…………………. 73
…………………. 77

Rehabilitation of Persons, Properties & Industries
Authority
…………………. 79

Ranaviru Seva Authority …........................................

Botanical Garden Trust Fund.….................................
…………………. 82
…………………. 84
Index………………………………………………...........
…………………. 85
Report from the Committee on Public Enterprises of the
Parliament of the Democratic Socialist Republic of Sri Lanka
Chairman’s Note
It is with immense satisfaction that I present to the House, the Third Report of the
Committee on Public Enterprises (COPE) which covers its oversight activities
from October 2014 to 31st March 2015.
Hitherto, I have tabled six reports (3 Final Reports and 3 Interim Reports) covering
a period from June 2010 to March 2015, during the First Session of the Seventh
Parliament.
The Committee has been able to complete 627 examinations during the said
period (2010 – 2015). It is an unprecedented record in the history of our
Legislature, as compared with the total of 670 examinations over the entire period (
1979 – 2010 ) of 31 years since the inception of the Committee on Public
Enterprises in 1979.
The COPE came into operation in 1979, when the need arose for a separate
Oversight Committee in respect of Public Enterprises, with the expansion of the
State sector of the Sri Lankan economy. Thus, all institutions other than the
Ministries and Government Departments come under the purview of the COPE.
When the present Committee on Public Enterprises took over in June 2010, there
were over 200 State Institutions assigned to the COPE. Since it was practically
impossible to deal with all these institutions, within one single calendar year, it
was considered desirable to set up three Sub-Committees under three Chairmen, in
order to complete examinations, expeditiously. This exercise enabled the
Committee to clear the backlog of arrears and also to update and streamline the
process of oversight work.
On a directive by the Committee, the State-owned companies registered under the
Company Law were also brought under the purview of the COPE. The subsidiary
companies attached to various State Corporations but remotely controlled by them
have now been made answerable to the COPE. Even those companies which have
a fair share of State capital have now come under the purview of the Committee.
I believe that the COPE has been able to accomplish its constitutional task more
effectively during the session under review. As a result the prestige of the COPE
and the dignity of the Parliament have been appreciably enhanced.
I take this opportunity to re-iterate with emphasis, the Committee’s demand for
amendments to the Standing Orders in order to strengthen the COPE’s authority
and capacity.
At a time when peoples’ demand for good governance is gaining momentum the
COPE can modestly claim its’ share of contribution towards that goal through our
performance during the current Parliamentary Session.
iii
Parliamentary Series No…..
In this exercise, the Committee acknowledges, with deep appreciation, the role
played by the staff of the Committee headed by the Secretary, through their high
quality performance.
The co-operation extended by the Auditor-General and his staff, the Director
General of Public Enterprises and his staff, and the Director General of National
Budget and his staff is deeply appreciated.
Peoples’ response and media’s critical support for the COPE performance is a
source of strength and inspiration to the Committee.
DEW Gunasekera (M.P)
Chairman
Committee on Public Enterprises
iv
Report from the Committee on Public Enterprises of the
Parliament of the Democratic Socialist Republic of Sri Lanka
Preface
Financial accountability is an integral part of the Public Finance Management. As
per the Article 148 of the Constitution of Sri Lanka, the Parliament is vested with
full control over Public Finance. Therefore, the executive is accountable to the
Parliament regarding the public funds and resources used for the execution of
public policies.
The Parliamentary Committee system makes an extraordinary contribution in
holding the executive to account on good governance and the role played by the
Committee on Public Enterprises in this context is phenomenal.
Formed in 1979 in terms of Standing Order No.126, the Committee on Public
Enterprises, usually known as the COPE, is one of the two financial oversight
Committees of the Sri Lankan Parliament which examine the accounts of 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. In addition, the Committee currently examines the performance
and current affairs of the Institutions also.
As at today, over 250 Public Enterprises come under the purview of the Committee
and examining all these Institutions within a year has become a challenging task in
consequent to the limitations on time and other required resources.
However, your Committee appointed for the First Session of the Seventh
Parliament has so far presented 06 reports (including this report) after conducting
624 examinations within a period of nearly 05 years. The coverage and the
frequency of tabling reports will evidence that the Committee has accomplished
the entrusted duty successfully.
The lack of powers to enforce the directives and recommendations is one of the
major practical issues encountered by the Committee at present and accordingly,
the implementation of them largely depends on the concern of the executive.
Therefore, strengthening the Committee by providing with necessary powers and
resources is essential in order to usher economy, efficiency and effectiveness of the
public finance.
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Parliamentary Series No…..
vi
Report from the Committee on Public Enterprises of the
Parliament of the Democratic Socialist Republic of Sri Lanka
The Committee on Public Enterprises for the First Session of
the Seventh Parliament
The Committee on Public Enterprises for the First Session of the Seventh
Parliament was appointed on 08th of June, 2010 with 31 Members of Parliament
and its current membership is as follows.
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
21.
22.
23.
24.
25.
26.
27.
28.
29.
30.
Hon.DEW Gunasekara (Chairman)
Hon.(Mrs.) Pavithra Devi Wanniarachchi
Hon.A.D.SusilPremajayantha
Hon.(Dr.) RajithaSenaratne
Hon. ChandrasiriGajadeera
Hon. A.P.Jagath Pushpakumara
Hon. T.B.Ekanayake
Hon.Mahinda Amaraweera
Hon.S.M.Chandrasena
Hon. (Dr.) Mervyn Silva
Hon. LasanthaAlagiyawanna
Hon. Weerakumara Dissanayake
Hon. Sarana Gunawardena
Hon. LakshmanKiriella
Hon. KaruJayasuriya
Hon. Ravi Karunanayake
Hon. P.Harrison (from 24.09.2014)
Hon. SajithPremadasa
Hon. Sunil Handunnetti
Hon. ArjunaRanatunga
Hon. M.T.Hasen Ali
Hon. A.Vinayagamoorthy
Hon. (Ven.) AthuraliyeRathanaThero
Hon. SeeniththambyYoheswaran
Hon. NamalRajapaksa
Hon. Eran Wickramaratne
Hon. (Prof.) RajivaWijesinha
Hon. E.Saravanapavan
Hon. SujeewaSenasinghe
Hon. (Mrs.) Rosy Senanayake
vii
Parliamentary Series No…..
In this Session, the following Members of Parliament had also served in the
Committee during the stated period.
01.
02.
03.
Hon.(Al Haj) A.H.M.Azwer(from 08.06.2010 up to 28.11.2014)
Hon. DayasiriJayasekara(from 08.06.2010 up to 29.07.2013)
Hon. Harin Fernando
(from 05.11.2013 up to 05.08.2014)
Soon after the formation of the Committee, three Sub Committees were appointed
to expedite the oversight process and the current membership of each of the Sub
Committees is as follows.
Composition of the Sub Committee I
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
Hon. A.D.SusilPremajayantha (Chairman)
Hon. (Mrs) Pavithra Devi Wanniarachchi
Hon. (Dr.) RajithaSenarathna
Hon. ChandrasiriGajadeera
Hon. T.B.Ekanayake
Hon. MahindaAmaraweera
Hon. LakshmanKiriella
Hon. Ravi Karunanayake
Hon. P.Harrison (from 24.09.2014)
Hon. SujeewaSenasinghe
Composition of the Sub Committee II
1.
2.
3.
4.
5.
6.
7.
8.
9.
viii
Hon. KaruJayasuriya (Chairman)
Hon. A.P.Jagath Pushpakumara
Hon. S.M.Chandrasena
Hon. (Dr.) Mervyn Silva
Hon. SaranaGunawardene
Hon. WeerakumaraDissanayake
Hon. SajithPremadasa
Hon. Sunil Handunnetti
Hon. NamalRajapaksa
Report from the Committee on Public Enterprises of the
Parliament of the Democratic Socialist Republic of Sri Lanka
Composition of the Sub Committee III
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
Hon. LasanthaAlagiyawanna (Chairman)
Hon. ArjunaRanatunga
Hon. M.T. Hasen Ali
Hon. A. Vinayagamoorthy
Hon. (Ven.) AthuraliyeRathanaThero
Hon. SeeniththambyYoheswaran
Hon. Eran Wickramaratne
Hon. (Prof.) RajivaWijesinha
Hon. E. Saravanapavan
Hon. (Mrs.) Rosy Senanayake
A new Committee for taking Follow Up action was set up on 22nd of July, 2014 to
ensure the effective and efficient implementation of the directives and
recommendations of the Committee. Its membership is consisted of the following
Members of Parliament.
Composition of the Follow-Up Committee
1. Hon. MahindaAmaraweera (Chairman)
2. Hon. Eran Wickramaratne
3. Hon. (Prof.) RajivaWijesinha
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Parliamentary Series No…..
2
Report from the Committee on Public Enterprises of the
Parliament of the Democratic Socialist Republic of Sri Lanka
Introduction
The Committee on Public Enterprises for the First Session of the Seventh
Parliament is pleased to present herewith its Sixth Report tabled during this session
and it will also be the third and the final Report for 2014. The observations and the
recommendations related to 29 Institutions examined by the Committee during the
period from 09.10.2014 to 06.03.2015 have been included in the report.
The report has been prepared based on the matters referred to in the Auditor
General’s reports for 2010 & 2011, written & oral explanations given thereon by
the officials of each Institution and the relevant line Ministry and the performance
& current affairs of the Institutions as at the date of the examination.
While paying the due priority for financial accountability, the performance of the
Institutions was also reviewed during the examinations giving special
consideration. Accordingly, findings related to two performance audits made on
the State Timber Corporation and the National Gem & Jewellery Authority have
also been included in the Report.
Out of the 29 Institutions, 12 institutions were examined by the Main Committee
chaired by the Hon. DEW Gunasekara, M.P., and the Sub Committee I &II,
chaired by the Hon. A.D. Susil Premajayantha, M.P. and the Hon. Karu Jayasuriya,
M.P. examined 07 Institutions each. The Sub Committee III chaired by the Hon.
Lasantha Alagiyawanne conducted 03 examinations.
In addition to the general observations and recommendations, the report also
contains information related to the financial situation of the 29 Institutions as at the
end of 06th March, 2015, the status of presenting Annual Reports to Parliament and
the Audit opinion given on the 2012 and 2013 financial statements.
The Follow-up Committee which was recently set up to ensure the effective and
efficient implementation of the directives and recommendations of the Committee
met separately and reviewed the action taken by the Institutions on the COPE
directives. In order to develop an effective follow up mechanism, the Committee,
at the very beginning of its activities, prioritized and selected 58 Institutions which
should be given more concern by the Committee.
Accordingly, the Auditor General was directed to report to the Committee on the
present status of implementing the directives and recommendations by those
Institutions. The Committee Secretariat, upon the direction of the Committee,
informed in writing to each Institution which had not taken action as per the
directives of the COPE, to take immediate action to implement them and report
back to the Committee.
Further, the officials of a few Institutions were summoned by the Follow-Up
Committee as the implementation of the COPE directives by those Institutions was
1
Parliamentary Series No…..
found to be unsatisfactory. Therefore, the valuable contribution made by this
Committee chaired by the Hon. Mahinda Amaraweera, M.P., to improve the
effectiveness of the Committee is noteworthy.
The Committee on Public Enterprises has so far presented 32 reports to the
Parliament from its appointment in 1979 and the table below provides a brief
review on its contribution made since then under the Chairmanship of the
following distinguished Members of Parliament.
Parliament
Chairman
Period Served
No of
Reports
Total No. of
Examinations
First
Parliament
Hon.GeorgeAbeygoonase
kara(passed away on
04.01.1981)
21.06.1979-04.01.1981
21.01.1981-27.03.1984
04
109
09.04.1984-22.01.1988
06
124
25.02.1988-20.12.1988
01
16
Hon.J.A.E.Amaratunga
20.03.1989-25.10.1993
03
106
Hon.RohanAbeygoonasek
ara
25.10.1993-24.06.1994
02
21
Hon.D.P.Wickremasinghe
25.08.1994-01.07.1997
Hon.ReggieRanatunga
03.07.1997-18.08.2000
01
23
Fourth
Parliament
Fifth
Parliament
Hon.J.A.E.Amaratunga
09.11.2000-10.07.2001
01
07
07.03.2002-07.02.2004
02
84
Sixth
Parliament
Hon.RohithaBogollagama
07.10.2004-21.11.2005
03
64
Hon.(Dr.)
WijeyadasaRajapakshe
04.07.2006- 23.07.2008
02
96
Hon. W.D.J.Seneviratne
23.07.2008-09.02.2010
01
20
Hon. DEW Gunasekara
22.04.2010- to date
06
627
Hon. M.S.Amarasiri
Hon.J.A.E.Amaratunga
Hon.(Dr.)WimalWickram
asinghe
Second
Parliament
Third
Parliament
Seventh
Parliament
2
Hon.JeyarajFernandopulle
Report from the Committee on Public Enterprises of the
Parliament of the Democratic Socialist Republic of Sri Lanka
Special Observations
The following observations made with regard to certain key Institutions have been
mentioned below separately considering their impact on the national economy.
Paddy Marketing Board
Background
In 2006, the functions of the Institution had been suspended and transferred to Sri
Lanka Agricultural Products Marketing Authority. However, it had been reactivated in 2007 and a number of unidentified account balances related to the
period before 2008 had been brought forward without a proper verification.
The following observations were made.
01. Annual reports from 2011 had not yet been tabled due to the inability to
authenticate certain Account balances related to the period before the reestablishment.
02. The Suspense Account balance which had been Rs.2.1 billion in 2010 had
increased up to Rs. 3.1 billion in 2011.
03. In spite of having a total capacity of nearly 236,000 MT in stores, only 4564
MT had been purchased in 2014 due to the inability to compete with the
private sector.
04. A long standing debtor balance of Rs.65 million was observed in connection
with stocks of paddy handed over to various private millers for processing.
They had neither returned the rice stocks nor paid the value of the rice stocks.
05. Action had not been taken to recover Rs.507,596,775/- due from 08
Government institutions.
06. Action had not been taken to recover the advances amounting to
Rs.150,676,283/-.
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Parliamentary Series No…..
07. A sum of Rs.6,535 million is payable to the Bank of Ceylon, People’s Bank,
National Savings Bank and the Regional Savings Bank for the loans taken.
08. A net loss ofRs.711.5 million had been incurred from the export of 22,950 MT
of rice to the United Arab Emirates.
4
Report from the Committee on Public Enterprises of the
Parliament of the Democratic Socialist Republic of Sri Lanka
Bank of Ceylon
01.A significant number of non-performing loans were observed.
Debtor
Date
Granted
Amount
Granted/
Rs.
Amount
Outstanding/R
s.
Present
Status
M/s.
International
Grocers
Alliance
340 million
Referred to
the
Attorney
General
M/s. Mahinda
Offset Printers
125 million
Referred to
the
Attorney
General
Guardian
Agency
03.01.2005
03.01.2006
US$ 4,206,024
US$ 1,657,182
214.6 million
141.3 million
Legal action
initiated
Creations (Pvt) 02.10.2009
Ltd.
02.10.2010
02.10.2011
21.10.2009
US$ 1,106,500
US$ 385,000
US$ 41,347
US$ 103,848
US$ 1,106,500
US$ 385,000
US$ 19,570
US$ 100,057
Legal action
in progress
Tri
Star 07.07.1997
Apparel
07.07.1997
Exports Ltd.
07.07.1997
US$ 1,520,000
US$ 960,000
US$ 3,500,000
US$ 550,858
US$ 393,221
US$ 1,980,482
Negotiation
s
in
progress
Vallible Lanka 19.02.2008
Shipping (Pvt)
Ltd.
Building
17.07.1994
Materials
Corporation
US$ 1,600,000
US$ 1,146,661
Legal action
in progress
26,500,000
6,000,000
27,449,335
4,850,000
Legal action
initiated
02. Due to the negligence of the officers concerned in verifying customer details
properly, several fraudulent fund transfers were observed.
03. Income growth rate which had been 56.3% in 2012 had decreased up to 15.7%
in 2013.
5
Parliamentary Series No…..
6
Report from the Committee on Public Enterprises of the
Parliament of the Democratic Socialist Republic of Sri Lanka
General Observations
The Committee observed the following lapses, irregularities and inefficiencies in
number of examined Institutions and most of the issues had originated due to noncompliance with rules and regulations, managerial inefficiencies and also due to
not taking important policy decisions pointed out by the Committee in its earlier
Reports.
01. Weak internal financial control for not taking adequate action to strengthen
the Internal Audit Division.
02. Delay in presenting Annual Reports to Parliament.
03. Inability to recruit qualified persons for certain posts due to lower salary
scales in the Government sector.
04. Delay in filling staff vacancies.
05. Releasing staff to the line Ministry without a proper approval.
06. Appointment of unqualified persons to higher positions.
07. Re-appointment of persons who had been once convicted for malpractices.
08. Creation of positions not included in the approved carder and making
appointments.
09. Offering contracts to contractors those who had seriously breached
previous agreements.
10. Making final payments in spite of the poor quality of certain construction
work.
11. Making payments for activities which had not been carried out or
completed by the contractors.
12. Not taking action against the contractors those had failed to carry out the
work properly.
13. Breach of agreements in Higher Educational Institutions as certain foreign
scholarship holders do not return to the country after studies.
7
Parliamentary Series No…..
14. Inability to trace the whereabouts or contact most of those officers referred
to in Point 13 above.
15. Longstanding debtor balances recoverable from other institutions.
16. Audit observations which had not received adequate attention.
17. Inadequate pre-preparation of certain officials for Committee meetings of
the COPE.
18. Account balances remaining unreconciled for a significant period of time
due to lack of evidence to prove the balances.
8
Report from the Committee on Public Enterprises of the
Parliament of the Democratic Socialist Republic of Sri Lanka
Financial Results of Examined Institutions
Limited Liability Companies & Strategic Business Enterprises
NO
01
Bank of Ceylon
02
Housing
Development
and
Finance Corporation
Bank (HDFC Bank)
Paddy
Marketing
Board
Airport and Aviation
Services Ltd.
03
04
05
06
2013
Profit/ (loss)
Before Tax (Rs.)
2012
2011
15,708,772,000
19,794,298,000
16,484,715,000
231,374,299
125,852,185
320,655,684
F/S Not
Submitted
F/S Not
Submitted
264,125,792
4,745,670,660
3,858,653,552
2,139,728,601
*382,336,761
*801,681,308
*603,498,864
1,979,330,457
1,757,752,098
1,318,051,695
Institution
State
Timber
Corporation
Development
Lotteries Board
Non Commercial Institutions
NO
Institution
2013
01
02
03
04
05
06
Open University of Sri
Lanka
Atomic
Energy
Authority
Central Cultural Fund
National Gem and
Jewelry Authority
Sri Lanka Institute of
Development
Administration
University of Moratuwa
Surplus/(deficit)
(Rs.)
2012
2011
150,823,116
89,968,693
1,697,196,727
(15,176,943)
(10,150,352)
3,297,783
302,069,092
227,294,733
235,009,985
120,084,001
350,928,300
27,812,402
(32,251,344)
(14,875,471)
640,761
(190,252,999)
(64,407,671)
(32,112,865)
9
Parliamentary Series No…..
07
08
09
10
11
12
13
14
15
16
17
18
19
20
Post Graduate Institute
of Agriculture
Post Graduate Institute
of English
Post Graduate Institute
of Science
National Institute of
Business Management
National Institute of
Language
Education
and Training
Official
language
Commission
Ayurvedic
Medical
Council
Sri Lanka Council for
Agricultural Research
Policy
Hector Kobbekaduwa
Agrarian Research and
Training Institute
National
Aquatic
Resources Research and
Development Agency
Sri
Lanka
Land
Reclamation
and
Development
Corporation
National Aquaculture
Development Authority
(NAQDA)
Tea
Small
HoldingsDevelopment
Authority
Tea Research Institute
34,250,532
21,271,268
17,215,754
3,413,496
2,081,212
1,244,185
25,403,542
29,584,110
67,685,112
284,752,742
245,347,814
294,923,849
(12,370,051)
(19,361,989)
997,495
(3,131,575)
(4,707,830)
1,359,452
1,575,270
(96,820)
(1,354,333)
(3,909,295)
(7,285,498)
(3,809,788)
(14,160,647)
(17,157,210)
(13,009,737)
(120,061,820)
(93,909,306)
(41,313,223)
118,295,000
(42,529,000)
393,243,000
(9,099,309)
(20,364,390)
(25,754,103)
(187,842,000)
(154,165,000)
(12,757,000)
(23,423,000)
(28,682,000)
(26,814,000)
21
RanaviruSeva Authority
(12,301,556)
2,294,685
11,402,525
22
Botanical Garden Trust
Fund
Rehabilitation
of
Persons, Properties &
Industries Authority.
89,368,125
66,186,911
74,466,125
7,418,327
(1,283,016)
4,217,335
23
10
Report from the Committee on Public Enterprises of the
Parliament of the Democratic Socialist Republic of Sri Lanka
Status of Presenting Annual Reports to Parliament
According to the information available as at 10.02.2015, the status of presenting
2011, 2012 & 2013 Annual Reports to Parliament by each of the 26 Institutions
examined is as follows.
Institutions which had not tabled the 2011 Annual Report
1.
2.
3.
4.
5.
Paddy Marketing Board
Official Languages Commission
Rehabilitation of Persons, Properties & Industries Authority
RanaviruSeva Authority
Botanical Garden Trust Fund
Institutions which had not tabled the 2012 Annual Report
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
Paddy Marketing Board
Central Cultural Fund
National Gem &Jewellery Authority
SL Institute of Development Administration (SLIDA)
Post Graduate Institute of Agriculture
Post Graduate Institute of Science
National Institute of Business Management
Official Languages Commission
Tea Small Holdings Development Authority
Rehabilitation of Persons, Properties & Industries Authority
RanaviruSeva Authority
Botanical Garden Trust Fund
Institutions which had not tabled the 2013 Annual Report
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
Open University of Sri Lanka
Paddy Marketing Board
Atomic Energy Authority
Airport & Aviation Services Ltd.
Central Cultural Fund
State Timber Corporation
National Gem &Jewellery Authority
SL Institute of Development Administration (SLIDA)
University of Moratuwa
Development Lotteries Board
11
Parliamentary Series No…..
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
21.
22.
23.
24.
25.
26.
27.
12
Post Graduate Institute of Agriculture
Post Graduate Institute of English
Post Graduate Institute of Science
National Institute of Business Management
National Institute of Language Education & Training
Official Languages Commission
Ayurvedic Medical Council
SL Council for Agricultural Research Policy
Hector Kobbekaduwa Agrarian Research & Training Institute
National Aquatic Resources Research & Development Agency
SL Land Reclamation & Development Corporation
National Aquaculture Development Authority (NAQDA)
Tea Small Holdings Development Authority
Tea Research Institute
Rehabilitation of Persons, Properties & Industries Authority
RanaviruSeva Authority
Botanical Garden Trust Fund
Report from the Committee on Public Enterprises of the
Parliament of the Democratic Socialist Republic of Sri Lanka
Auditor General’s Opinion on Financial Statements
The financial statements submitted by each institution for 2012 and 2013 have
received the following opinion of the Auditor General. The interpretation of each
of the opinion is also given below.
Unqualified Opinion
An unqualified audit opinion indicates that auditor General could find no
significant violations or misstatements in the financial statements of a Public
Enterprise.
Qualified Opinion
A qualified audit opinion indicates that the auditor General found issues in the
financial information of a Public Enterprise due to deviations from Reporting
Accounting Standards or due to limitation of scope for unavailability of
documentary evidences.
Disclaimer of Opinion
A disclaimer of Opinion indicates that an opinion cannot be made due to the
inability to obtain sufficient appropriate audit evidences and the Auditor General
concludes that the possible effects on the financial statements of undetected
misstatements, if any, could be both material and pervasive the uncertainties and
their possible cumulative effect on the financial statements.
Adverse Opinion
An adverse opinion indicates the auditor found significant material misstatements
relating to financial statements due to inaccurate or unreliable information.
13
Parliamentary Series No…..
NO
Financial Year
Institution
01
Bank of Ceylon
02
Open University of Sri Lanka
03
Housing Development and Finance
Corporation Bank (HDFC Bank)
2013
2012
Unqualified
Unqualified
Qualified
Adverse
Unqualified
Unqualified
-
-
Qualified
Qualified
Unqualified
Unqualified
04
Paddy Marketing Board
05
Atomic Energy Authority
06
Airport and Aviation Services Ltd.
07
Central Cultural Fund
Qualified
Qualified
08
State Timber Corporation
Qualified
Qualified
09
National Gem and Jewelry Authority
Qualified
Qualified
10
Sri Lanka Institute of Development
Administration
Qualified
11
University of Moratuwa
Qualified
Qualified
12
Development Lotteries Board
Qualified
Qualified
13
Post
Graduate
Agriculture
Qualified
Disclaimer
Institute
Qualified
of
14
Post Graduate Institute of English
Qualified
Unqualified
15
Post Graduate Institute of Science
Qualified
Qualified
16
National Institute
Management
Qualified
Unqualified
Unqualified
Qualified
17
of
National Institute of
Education and Training
Business
Language
18
Official language Commission
Unqualified
Qualified
19
Ayurvedic Medical Council
Unqualified
Qualified
14
Report from the Committee on Public Enterprises of the
Parliament of the Democratic Socialist Republic of Sri Lanka
20
Sri Lanka Council for Agricultural
Research Policy
Adverse
Qualified
Hector Kobbekaduwa Agrarian
Research and Training Institute
Unqualified
Qualified
National
Aquatic
Resources
Research and Development Agency
Qualified
Qualified
Sri Lanka Land Reclamation and
Development Corporation
Qualified
Qualified
National Aquaculture Development
Authority (NAQDA)
Qualified
Qualified
Tea Small HoldingsDevelopment
Authority
Qualified
Qualified
26
Tea Research Institute
Qualified
Qualified
27
RanaviruSeva Authority
Qualified
Qualified
28
Botanical Garden Trust Fund
Qualified
Qualified
29
Rehabilitation of Persons, Properties
& Industries Authority.
Qualified
Qualified
21
22
23
24
25
It should be noted that the financial statements furnished by the following
institutions have received unfavourable audit opinions consecutively.
NO
01
02
Institution
Open University of
Sri Lanka
Sri Lanka Council
for
Agricultural
Research Policy
2013
2012
2011
2010
Qualified
Adverse
Adverse
disclaimer
Adverse
Qualified
Adverse
-
15
Parliamentary Series No…..
16
Report from the Committee on Public Enterprises of the
Parliament of the Democratic Socialist Republic of Sri Lanka
Recommendations
01. The Standing Order No.126 has to be amended in order to ensure
that the Government should either follow the recommendations of
the Committee or else explain reasons, in writing for inability to
comply with the recommendations within the mandatory period of
one month from the date of presenting the Report to Parliament. A
description of the remedial action to be taken regarding the
recommendations which cannot be implemented should also be
notified.
02. If an adverse audit opinion had been expressed by the Auditor
General on the financial statements of a given Institution, it should
be taken into consideration by the Treasury when releasing funds to
that Institution.
03. Auditing of limited liability companies should be assigned to the
Auditor General’s Department.
04. The minimum qualifications of members of Boards of Directors of
Institutions should be constituted/ declared by the CAO of each line
Ministry with the concurrence of the Treasury to avoid any
unqualified appointments to the Boards of Directors in Institutions.
05. In the instances where new Institutions and Subsidiary companies
are established under a given Ministry, the relevant CAO should
duly inform the Committee and the Auditor General of such
formations of Institutions along with details about the Boards of
Directors, Shareholders etc.
06. A mechanism should be established so that the Audit reports of the
private auditors with regard to subsidiary companies are received by
the Auditor General.
07. The treasury, where applicable, should formulate a mechanism by
which the long standing debtor balances due from one governmental
institution to another is settled as the annual budgetary allocations
are made.
17
Parliamentary Series No…..
08. The Accounting Officer should ensure that audit queries are replied
to within three months of the receipt of the audit queries.
09. The current practice of transferring Institutions from one Ministry to
another has been found to be wasteful and has led to limited
efficiency and effectiveness in Government Institutions. Therefore,
it is recommended to follow a scientific basis in the constitution of
Ministries and the Departments and Institutions belonging to each
Ministry should be allocated on permanent basis.
10. The Institutions should strictly adhere to the mandatory requirement
of conducting Audit & Management Committee meetings and the
relevant minutes of those meetings should be tabled at the meetings
of the Board of Directors along with the progress of replying to all
the pending audit queries.
18
Report from the Committee on Public Enterprises of the
Parliament of the Democratic Socialist Republic of Sri Lanka
Review on the Implementation of Recommendations
Since its inception, the Committee has so far tabled six reports covering more than
600 examinations which stand as the highest number of Institutions examined by
any financial oversight Committee during a single session in the legislative history
of Sri Lanka.
Report
Parliamentary
Series No.
119
Date
Presented
01.12.2011
No. of Institutions
179
25.10.2012
32
236
23.07.2013
244
First Interim Report
for 2014
318
05.08.2014
47
Second Interim Report
for 2014
343
14.11.2014
46
First Report
Interim Report
2012
Second Report
for
Final Report for 2014
229
29
Total
627
Although each Report carries a number of directives and recommendations, the
lack of powers of the Committee to enforce them has diluted the authority of the
legislature over Public Finance.
The Committee, as stated in all of its earlier reports, re-emphasize that the
Secretaries to the Ministries, being the Chief Accounting Officer, carry the
ultimate responsibility with regard to the control of public finance. Therefore, it is
the responsibility of the CAOs to take immediate corrective actions and implement
the recommendations of the Committee.
Therefore, the Committee strongly emphasizes that there should be a specified
course of action which can be adopted by the Committee or any legislative body
when the Chief Accounting Officers and the Accounting Officers fail to adhere to
the directives and recommendations of the Committee.
19
Parliamentary Series No…..
Some key recommendations presented by the Committee in its earlier reports have
been listed below, given the relevancy of most of them in today’s context and also
due to the recurrence of certain irregularities repeatedly.
1. Preparation of the Corporate Plan and the Action Plan in compliance with
Treasury guidelines.
2. Updating the Corporate Plan periodically.
3. Reviewing the Corporate Plan and the Action Plan periodically at the
Ministerial level to monitor the implementation of the targets laid down in the
Corporate Plan.
4. Preparation of the Procurement Plan soon after the budgetary allocations are
made.
5. Convening the Audit & Management Committee meeting at least quarterly and
tabling its report in the Board meeting for the attention of the Chairman and
the Board of Directors.
6. Presenting the Annual Report to Parliament by 31st of May of the following
year.
7. Avoiding the re-appointment of Chairmen those who failed to present Annual
Reports in time.
8. Strengthening the Committee by making required amendments to the Standing
Order 126.
9. Amalgamating the Institutions which are much overlapped with regard to
functions carried out.
10. Revision of Salary scales of professional grades to bring down the dearth of
professionals in the Public Sector.
11. Making required amendments to the outdated Acts.
12. Using a Cost Accounting System.
13. Strengthening the Auditor General’s Department and the COPE Secretariat.
14. Offering local terrestrial television broadcaster rights to the state owned TV
stations in order to improve their financial position.
20
Report from the Committee on Public Enterprises of the
Parliament of the Democratic Socialist Republic of Sri Lanka
Action taken by the Ministry of Finance & Planning for the Implementation
of COPE Directives
The Committee appreciates certain initiatives taken by the Ministry of Finance and
planning, within its purview, with regard to the matters referred to in the earlier
Committee reports and some of the actions thus taken are mentioned below for
your information.
01. The Public Enterprises which had not implemented certain directives given
by the Committee had been issued with Special circulars and specific
reminders.
02. Special discussions had been held with Board of Directors of such Public
Enterprises.
03. A special direction had been issued to all Secretaries to theMinistries and
Chairmen of Public Enterprises on






Noncompliance with statutory obligations.
Non submission of Corporate/ Business Plans/ Annual Budgets
and Procurement Plans.
Non submission of Annual Reports.
Failure to respond to audit queries and COPE recommendations.
Procurement violations.
Financial misappropriation.
04. It has been informed that action would be taken to issue a new circular
emphasizing that the investigative procedures and disciplinary actions
articulated in the Establishment Code are applicable to every Public
Enterprise unless the Public Enterprise has its own Administrative Manual
duly approved by the Treasury.
21
Parliamentary Series No…..
22
Report from the Committee on Public Enterprises of the
Parliament of the Democratic Socialist Republic of Sri Lanka
Institutions Examined by
the Main Committee
23
Parliamentary Series No…..
24
Report from the Committee on Public Enterprises of the
Parliament of the Democratic Socialist Republic of Sri Lanka
Major Issues & Problems Identified
Comments & Directives of the
COPE
Bank of Ceylon
09thOctober 2014
Ministry of Finance & Planning
1.
The current position of the recovery
of loans relevant to below
mentioned
institutions
was
questioned.
The CAO/AO stated that two
court cases had been filed against
them and the decisions had also
been received in favour of the
Bank. But the Committee was
(i) M/S. International Grocers informed that those institutions
Alliance – Rs. 340 million &
had no assets to recover the said
values.
(ii) M/S. Mahinda Offset Printers –
Rs. 125 million
However, actions had been taken
to make a complaint to the CID as
well as to the Commission to
Investigate Allegations of Bribery
or Corruption as per the directive
of the COPE, and matters had
been referred to the Attorney
General for further advice as per
instructed.
The CAO/AO was directed to
send reminders and follow up the
matter until they get a response
from the Attorney General.
2.
The current position of the recovery
of non- performing loan balances of
10 customers amounting to Rs.
2,535,321,038/and
nonperforming overdrafts of 15
customers amounting to Rs.
491,073,707/- was discussed.
The CAO/AO stated that the bank
does not like to loose its
customers when they were faced
difficulties, but to help them to
uplift
their
businesses
by
rescheduling
the
loans
or
providing new loans while taking
action to recover the loans on
regular basis.
3.
The loans granted to the Creations The CAO/AO was directed to
(Pvt.) Ltd. and Sivas (Pvt.) Ltd. had send a detailed report on these two
not yet been settled.
loans and take action to hold an
inquiry of the officers who were
responsible in granting these two
loans. The CAO/AO was also
25
Parliamentary Series No…..
Major Issues & Problems Identified
Comments & Directives of the
COPE
directed to send a list of names of
members of Board of Directors of
all 10 institutions to the
Committee, within a month.
4.
The Committee inquired regarding
the actions taken by the Bank to
recover the outstanding balances of
the TOD facilities provided to 12
customers.
The Committee directed the
CAO/AO to send a report to the
Committee
explaining
the
strategies adopting to overcome
the situation within six months’
time.
5.
The non-performing loan (NPL)
ratio of the bank had been 4.3 % in
2013, and it was in a lowposition
compared to the industry level.
The CAO/AO stated that the NPL
ratio had been increased when
compared to the previous years
due to the drought and the decline
in gold prices.
6.
The Committee queried the actions
taken regarding the frauds that had
been taken place in the bank in
2013.
The CAO/AO stated that they had
taken stern action for around 15 %
of cases of 129 investigations
including 07 major fraud cases.
7.
The Committee enquired the current Following actions had been taken
position with regard to the under regarding the said issues.
mentioned frauds that had occurred
during the year 2013.
(i) Metropolitan
Branch
– (i) The officer who involved in
Fraudulent Fund Transfer of transferring the funds had been
Rs. 5.8 million
interdicted, and also had made a
complaint to the CID.
(ii) Personal Branch – Fraudulent (ii)Half of this amounthad been
Fund Transfer of Rs. 11.1 recovered immediately as this
million
person had transferred the above
amount to his wife’s account in a
Cyprus Bank. The matter had
been referred to the CID for
further
investigations.
The
Committee directed to strengthen
their verification procedures to
overcome similar situations in
(iii) Removal of Gold Articles future.
The pension of the responsible
26
Report from the Committee on Public Enterprises of the
Parliament of the Democratic Socialist Republic of Sri Lanka
Major Issues & Problems Identified
Comments & Directives of the
COPE
worth of Rs. 8 million – manager had been stopped and a
Bogawanthalawa Branch
complaint had been made to the
CID.
(iv) Fraudulent creation of Pawning (iv) The relevant officer had been
Advances in the system for Rs. interdicted and had made a
18 million – Bopitiya Branch
complaint to the CID.
(v) Changing of Gold Articles (v)The relevant officer had been
worth of Rs. 3 million – interdicted and had made a
Makandura Extension Office
complaint to the CID.
8.
A Bank in Iran had been instructed
by the BOC to transfer US $
800,000 & Euro 200,000 from two
accounts through Central Bank of
Sri Lanka to Deutsche Bank,
America and Bank of Ceylon,
London respectively on 26.01.2012.
But according to SWIFT statement
sent by the Iranian Bank, although
the requested funds had been
transferred no funds had been
received to the said Bank Accounts.
The CAO/AO stated that this was
not a fraudulent transaction as the
Iranian Central Bank had already
transferred the funds to the
Central Bank of Sri Lanka. It was
further revealed that the Central
Bank of Sri Lanka had confirmed
the receipt of funds to Central
Bank of Iran and a letter of
certification had been issued by
the Central Bank.
Open University of Sri Lanka
03rd November 2014
Ministry of Higher Education
1.
The Committee enquired whether The CAO/AO stated that after
action had been taken to strengthen recruiting an Assistant Internal
the Internal Audit Section.
Auditor in June 2012, they were
able to carry out the functions of
the
audit
programme.The
CAO/AO stated that applications
had been called for the post of
Audit Assistants and interviews
would be held in November 2014.
2.
Out of a sum of Rs. 94,665,185/recoverable from 38 academic and
non-academic staff, a sum of Rs.
10,673,950 should be recovered
from 13 officers and the action
The CAO/AO stated that out of
the above amount Rs. 35 million
had been recovered by then, and
they were in the process of
recovering the due amounts from
27
Parliamentary Series No…..
Major Issues & Problems Identified
Comments & Directives of the
COPE
taken to recover that money was not 12 officers.He further added that
satisfactory.
since the aforesaid 13 officers had
gone overseas, the University was
not in a position to trace them.
The CAO/AO was directed to take
action to deduct the dues from the
University Provident Fund (UPF)
of the respective officers.
3.
Assets
valued
at
Rs.
2,868,448,027/- accounted in the
2013 financial statement and assets
valued at Rs. 204,167,330/received
from the Distance
Education Modernization Project
(DEMP)had not yet been identified.
It
was
revealed
that
the
management had not given their
assistance to the committee
appointed to rectify the issues
related to assets.
The AO stated that the physical
verification with regard to the
assets valued at Rs. 204 million
was being carried out by the
University and this matter could
be rectified before the end of
2014. He also added that it was an
independent committee appointed
by the Governing Council, and the
management had given all
necessary assistance.
4.
The salaries and allowances paid to
the academic staff amounting to Rs.
376,765,979/- could not
be
satisfactorily vouched by the audit
due to lack of attendance registers,
and also leave records of the
academic staff had not been
maintained by the University.
The Committee did not agree with
the explanation given by the
management and the CAO/AO
was directed to prepare a policy
paper to this effect and discuss
with the parties concerned, and
submit it to the Committee.
The services of the Management
Information System had not been
carried out by the Department of
Information Technology of the
University, and paid Rs. 2.8 million
to a private institution to carry out
the services and functions of the
Accounts Section.
The CAO/AO stated that although
they carry out the system, the
entire source codes of the system
were available with the private
institution,
and
as
such
maintenance had to be done by
them.
5.
The CAO/AO agreed to submit
their proposal.
The Committee wanted the
CAO/AO to go for a long term
28
Report from the Committee on Public Enterprises of the
Parliament of the Democratic Socialist Republic of Sri Lanka
Major Issues & Problems Identified
Comments & Directives of the
COPE
agreement.
6.
It was observed that relevant
amendments to the deeds and
survey plans of theacquired land
had not been made whereas some of
the lands belong to the University
had not been transferred to the
University and some lands had not
been included in the register of
lands.
The CAO/AO stated that some of
the lands had been leased out
under long term basis, and action
had been taken to obtain the
ownership of the lands.
7.
Out of the 03 small bundle packing
machines valued at Rs. 5,308,800/provided to the University by the
DEM Project in 2009, only one
machine was being used, and the
other 02 machines were idled.
The CAO/AO stated that those
machines had been supplied to the
University without an essential
part (module) that would be
necessary for its operation and
one machine was being used by
the University after purchasing a
module which was very costly.
Since the DEMP office had been
closed down in 2010, they were
unable to obtain any information
in this regard.
8.
The University had not released the
examination results within the
prescribed period of 45 days, as per
the Corporate Plan for 2011-2016,
and there had been instances where
it had been delayed for 6 months,
one year and even more than one
year.
The CAO/AO having accepted the
delay, informed the Committee
that they expect to mark the
answer scripts in conference
marking system, and action would
be taken to release the results
early.
Housing Development Finance 04th November 2014
Corporation (HDFC) Bank
Ministry of Finance & Planning
1.
As a result of the interest payment
at the rate of 22.2% for the Fixed
Deposit worth Rs. 450 million made
by the Employees Provident Fund
of Ceylon Electricity Board
An
Investigation
committee
comprised of officials of the
Department of Public Enterprises
had been appointed as per the
directive of the previous COPE
29
Parliamentary Series No…..
Major Issues & Problems Identified
Comments & Directives of the
COPE
deviating from the normal interest meetingand according to their
rate of 18%, the bank incurred a report following shortcomings had
loss of Rs. 69 million.
been
observed
from
the
documentary evidence.
(i) The Assistant General Manager
(Project Finance & Treasury
Management) had signed the
quotation at the interest rate of
22.2 % on AER (Annual Effective
Rate) basis, when the Board of
Directors had approved the rate at
18 % on AER basis. Therefore the
loss incurred to the HDFC bank
was 69 million.
(ii)The Bank had been responsible
for non-refunding the deposit
using alternate cheaper financing
sources after discovering the
error, and not introducing
effective
internal
control
mechanism related to the deposit
transactions.
The Committee directed the
CAO/AO to take a decision on the
carelessness of the officers
concerned. It was stated that they
had already held discussions with
the Board of Directors, and a
warning letter had been issued to
the Assistant Manager (PF &TM).
2.
30
The Committee enquired as to why The CAO/AO stated that as the
the bank had obtained the service of HDFC had to face problems due
a broker company.
to short of fundsthe service of
Broker companies certified by the
Central Bank had been obtained
and as a result the deposits had
increased up to Rs. 23 billion
reaching a stable financial
position.
Report from the Committee on Public Enterprises of the
Parliament of the Democratic Socialist Republic of Sri Lanka
Major Issues & Problems Identified
3.
Comments & Directives of the
COPE
The Committee enquired regarding The Chairman informed that
the NPL ratio of the Bank.
current status of the bank was at a
satisfactory level compared to the
previous years, but the NPL ratio
had been at a little higher position.
The CAO/AO agreed to take
necessary steps to decrease the
NPL ratio by the end of the year
2014.
Paddy Marketing Board
05th November 2014
Ministry of Co-operatives & Internal
Trade
1.
Annual reports had not been tabled According to the CAO/AO the
in Parliament for 2011, 2012 and presentation of accounts had been
2013.
delayed as unidentified balances,
related to the period before the reestablishment of the Institution in
2008, had been brought forward to
new accounts without a proper
verification.
The CAO/AO also stated that,
certain balances could not be
authenticated
due
to
the
unavailability
of
source
documents and a committee had
been appointed to work on these
issues.
The CAO/AO was directed to
furnish an Interim Report within
three months, on the progress of
the reconciliation of accounts.
2.
larger
There was a significant Debtor
balance amounting to Rs.91
million, in connection with paddy
stocks handed over to various
private millers who had neither
returned the rice stocks after
processing nor paid the value of the
stocks.
The CAO/AO stated that the
outstanding amount had reduced
to Rs. 65 million as at the date of
the examination and legal action
was being taken to recover the
rest.
The CAO/AO was directed to
submit a list of names of all the
31
Parliamentary Series No…..
Major Issues & Problems Identified
Comments & Directives of the
COPE
millers in relation to the
outstanding amount of Rs.65
million, within three weeks.
3.
A debtor balance of Rs.507 million The CAO/AO stated that it was
was due from 08 Government being recovered as at the date of
Institutions.
the examination and the largest
portion of the above balance was
due from the Co-operative
Wholesale Establishment.
The Committee was of the view
that a proper methodology had not
been followed to recover the said
balance
and
stressed
the
importance of following such a
mechanism.
4.
The Committee enquired about the The Treasury Representative
strategy to set off the loan balance undertook to look into the matter.
of Rs.8,658.6 million out of which
Rs.6,408.6 million was payable to
the Bank of Ceylon, People’s Bank,
National Savings Bank and the
Regional Savings Bank.
5.
Performance of the Institution was The Committee directed the
discussed.
CAO/AO to submit a report
within three months on the
performance of the Institution for
the period from 2010 to 2013.
Atomic Energy Authority
10th November 2014
Ministry of Technology& Research
1.
32
The
Committee
questioned The CAO stated that the Authority
regarding the structure of the handles both the regulatory
Authority as per the new Act.
regime and the promotional work
as per the prevailing Act, but
these two functions had been
separated by the new Act
establishing two entities as a
Board and a Council. He also
added
that
accordingly
Report from the Committee on Public Enterprises of the
Parliament of the Democratic Socialist Republic of Sri Lanka
Major Issues & Problems Identified
Comments & Directives of the
COPE
promotional work would be
handled by the Board and the
entire regulatory regime would be
handled by the Council.
2.
The Committee observed that 146
samples had been tested by the
Authority for radiation during the
years 2012 and 2013, but only 24
certificates had been collected by
the importers as at 27.05.2014 and
also 93 imports had been released
from the port without obtaining the
said certificates as at that date.
The CAO/AO stated that the
Authority carries out radiation
tests & issues certificates for the
food samples supplied by the
Food Authority. But the authority
of issuing those food items to the
market was vested with the Food
Authority which is under the
Ministry of Health and they
produce the certificate to the
Customs to release those food
items.
The CAO was directed to submit a
report within a week regarding the
radiation testing certificates which
had not been collected together
with the following information.
(i) The food item and the name
of the importer/institution.
(ii) The date of the test to be
completed as requested by the
Food Authority.
The Committee also directed the
Secretary to the Committee to
send a letter to the Secretary to the
Ministry of Finance and Planning
and the Secretary to the Ministry
of Health enquiring as to how the
food items had been released to
the market without obtaining the
radiation testing certificates from
the Atomic EnergyAuthority.
3.
The Committee noted that the The CAO/AO stated that actions
service
of
the
commercial would be taken to increase the
operations
of
Multi-purpose capacity and provide service to
33
Parliamentary Series No…..
Major Issues & Problems Identified
Comments & Directives of the
COPE
Gamma Irradiation Facility (MGIF) the other parties.
project was being provided only to
one customer.
4.
The Committee discussed the The CAO/AO also emphasized
progress
of
obtaining
ISO that ISO 9001 had already been
certificates.
obtained by the Authority and
action was being taken to obtain
ISO 13485 standard very early.
The Committee wanted the
CAO/AO to ensure that they
obtain the ISO 13485 standard
prior to the next COPE
examination.
5.
The Committee questioned as to
why the Historical Costs of
property, plant and equipment
which were Rs. 87.82 million and
Rs. 103.44 million as at December
2011 and 2012 respectively had
included in the accounts by the
Authority without revaluation.It
was also questioned whether action
had been taken to divide the assets
among the two entities as per the
new Act.
The CAO/AO stated that a
committee had been appointed to
decide how to divide and revalue
the assets.
6.
Although the Authority had to pay
US$ 7,240.74 to the International
Atomic Energy Authority (IAEA)
as administration cost and program
assistance for the purchase of
scientific equipment, it had not been
reflected as payable to the IAEA in
the financial statements for the
years 2011 - 2013.
The CAO/AO stated that the term
(3%) on the payable amount had
not been implemented although it
had been in the agreement, and as
such the Authority had decided to
write off the above amount from
accounts.
7.
34
The Committee wanted the
CAO/AO to obtain a confirmation
from the IAEA and see whether
the Authority could get this
amount as an income.
The Authority had awarded a The CAO/AO stated that the
contract to the Government Factory Cabinet approval had been
Report from the Committee on Public Enterprises of the
Parliament of the Democratic Socialist Republic of Sri Lanka
Major Issues & Problems Identified
Comments & Directives of the
COPE
at a cost of Rs. 1,154,234/- for the
sealing of windows in 2010, though
the work had not been completed
properly, the Authority had paid Rs.
515,283/- without examining the
quality of the work and the balance
payment had been shown in the
financial statements for the years
2011, 2012 and 2013 as work-inprogress.
received to relocate the building
of the Authority in Malabe, and
the present building would be
demolished by 2016, and repairs
had been stopped, accordingly.
8.
The Committee noted that the
“Applying Molecular Diagnostics
to Zoonotic Diseases” project
should have been completed during
the period from 2009 to 2011 and
only Euro 239,192 had been spent
up to the said period out of the
approved amount of Euro 309,366.
The CAO/AO stated that this was
an ongoing project in the Ragama
Medical Faculty, and the delay in
the project was due to some
problems of the technical officers
attached to this project work. He
confirmed that the balance funds
could be utilized for future
activities.
9.
The Committee enquired as to why
the asset called Fourier Transform
Infrared
Spectrometer
(FTIR)
amounted to Rs. 5,611,171/donated by the IAEA on 31.05.2011
had been remainedidle up to 30th
September 2014.
The CAO/AO stated that this
machine had not been used but
arrangements would be made to
establish it in the new building to
be constructed at Malabe.
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Airport & Aviation Services (Sri 11th November 2014
Lanka) Ltd.
Ministry of Civil Aviation
1.
The performance of the institution The CAO/AO stated that the flight
was discussed.
movements,
passenger
movements and the air cargo
movements had increased by
82.6%, 73.2% and 40.5%
respectively from the year 2009 to
2014. It was further revealed that
the revenue had increased by
114% and a profit of Rs.4.5
billion had been recorded by the
end of 2013.
2.
The Committee enquired about the
figures related to the passenger
movements in the Katunayake and
the Mattala Airports.
It was mentioned that the
Katunayake Airport had handled a
total of 7.3 million passenger
movements in 2013, while 5.8
million passengers had been
handled by September, 2014.
From January to September,2014
there had been 13,371 arrivals and
16,712 departures in the Mattala
International Airport.
The CAO/AO was directed to
submit a detailed breakdown of
the international and domestic
passenger movements taken place
through the Mattala Airport in
2014.
3.
The financial position
Institution was discussed.
4.
It was enquired about the Bank loan The CAO/AO stated that US $
obtained for the construction of the 190 million had been borrowed
Mattala Airport.
from the Exim Bank of China at a
concessionary interest rate of 2%.
36
of
the Rs. 3091 million of profit (before
tax) had been recorded for the first
09 months in 2014.
Report from the Committee on Public Enterprises of the
Parliament of the Democratic Socialist Republic of Sri Lanka
Major Issues & Problems Identified
Comments & Directives of the
COPE
The CAO/AO was directed to
furnish a detailed report to the
Committee in this regard.
5.
It was discussed regarding the According to the CAO/AO, the
benefits of constructing a new number of Aircrafts flying above
Airport in Mattala.
the Island had significantly
improved due to the availability of
a highly standard Airport in
Mattala
which
has
the
accessibility
for
immediate
landing of even A 380 Airplanes
in urgent situations.
The CAO/AO was directedto
submit a certified report to the
Committee to prove the above
fact.
6.
7.
The Committee wanted to know
whether there was a possibility to
develop
the
Katunayake
International Airport as a spacious
Airport which could accommodate
a bigger Airplane such as A 380.
The CAO/AO stated that their
engineers
were
exploring
possibility of widening the
existing track in Katunayakeupto
60 meters.
The Committee was concerned
about the irregularities committed
when granting permission to use the
VIP launch in the Airport and
expressed its dissatisfaction for
offering VIP facilities to those who
were not entitled to receive it.
The CAO/AO stated that the
passengers entitled to use the VIP
launch were determined according
to a circular issued in 1992 by the
Ministry of Foreign Affairs and
the permission to use the VIP
launch was issued by that
Ministry.
The CAO/AO was directedto
submit a report on the possibility
of developing the Katunayake
International
Airport
to
accommodate any bigger Aircraft
in the World.
The CAO/AO was directed to
furnish a copy of the said Circular
to the Committee and wanted him
to discuss the issue with the
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Secretary to the Ministry of
Foreign Affairs.
Central Cultural Fund
12th November 2014
Ministry of Culture & the Art
1.
It was enquired about the current
position of the books misplaced
amounted toRs.125,454/- in the sale
of books, as per the audit reports.
As the CAO/AO stated that
although they had decided to
deduct this amount from the
responsible officers, they had
submitted an appeal stating that
the reason for the misplacement of
the books is the lack of security
arrangements at the book fair.
The Committee was of the view
that if there had been such a
situation, the management could
have submitted a Board Paper to
that effect and obtained the
approval to write-off this amount.
2.
There had been 189 vacancies and The CAO/AO stated that due to
470 excessive staff as at 31st the objection of the staff for the
December, 2013.
previous Scheme of Recruitment,
a committee had been appointed
by the Hon. Minister to prepare a
new SOR. But due to certain
anomalies in the newly prepared
SOR pointed out by the Salaries &
Cadre Commission, there had
been a delay in obtaining the
approval of the Treasury and
therefore filling of vacancies also
had been delayed.
According to the CAO/AO, due to
shortage of fundsduring the period
of
war,
the
management
introduced
a
Voluntary
Retirement Scheme (VRS) and
nearly four hundred members of
staff
applied
for
the
38
Report from the Committee on Public Enterprises of the
Parliament of the Democratic Socialist Republic of Sri Lanka
Major Issues & Problems Identified
Comments & Directives of the
COPE
scheme.However, when preparing
the previous SOR those officers
had not been included to thecadre,
and after the war ceased, the staff
applied for VRS did not retireas
the revenue of the Fund became
stable. Therefore excessive staff
had been shown in the figures.
The CAO was directed to revise
the SOR and to obtain the
approval from the Treasury early.
3.
4.
The
Cultural
Conservation
Construction
Company
Ltd.
affiliated to the Ministry had
provided services to The Central
Cultural Fund contrary to its
objectives, and the Fund had paid
Rs. 1,200/- per head, when the rate
paid by the Company had only Rs.
700/- per day to an employee. The
Company was able to earn the profit
of Rs. 22,314,593/- and Rs.
47,866,000/- respectively in the
year 2012 and 2013 by this.
The CAO/AO stated that the man
power for their construction work
is obtained from this company and
the amount disbursed by the
company to an employee would
be around Rs. 900/- including the
EPF, ETF and the insurance.
The Fund had paid an advance
amounting to Rs. 1,382,055/- to a
private company for conservation of
gravel roads in Polonnaruwa
Archeological area in 2001. But the
company had failed to carry out the
contract and the Fund had filed a
court case to recover the advance.
Although the Court had ordered the
relevant Company in June 2011 to
pay a sum of Rs. 4,472,151/- to the
Fund, no action had been taken by
the Fund to recover the said amount
to date.
The CAO/AO stated that since the
relevant company had paid the
due amount even after the court
order had been given, the Fund
had again filed a case in the
Supreme Court and the decision
was pending.
TheCAO/AO was directed to
submit all financial statements of
the
Cultural
Conservation
Construction Company to the
Auditor General for scrutinizing
the accounts and to submit a
report to the Committee.
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A sum of Rs. 22,099,917/- had been
paid for the concrete blocks utilized
for the construction work which had
not been upto the required standard
and Rs. 4,660,998/- had been paid
in respect of another task which
had not been carried out.
The CAO/AO stated that after the
audit query, the payments had
been stopped, but there was a
delay
in
inspecting
the
construction site as it took a long
time to appoint a Research
Officer.
The Committee directed the
CAO/AO to expedite the matter.
6.
An officer holding a permanent The CAO/AO was directedto
position in the Sri Lanka Vocational regularize the matter by obtaining
Training Authority had been the Treasury approval.
appointed to the post of Working
Director of the Fund, which had not
been included in the approved cadre
of the Fundin 2006.He had also
obtained salaries and allowances
from the Authority amounting to
Rs. 5,076,836/- and allowances
amounting to Rs. 4,494,105/- from
the Fund on a decision made by the
Board of Directors of the Fund,
contrary to the Central Cultural
Fund Act.
State Timber Corporation – 14th November 2014
Performance audit of the furniture
manufacturing
plant
at
Kaldemulla
State
Timber
Corporation
Sri Lanka
Bureau of Foreign Employment
Ministry
of
Environment
Renewable Energy
1.
40
&
The Auditor General informed the
Committee
that
audit
on
performance of the institution had
been commenced from the year
2010 to ascertain the efficiency,
effectiveness,
and
the
environmental aspects of the
Report from the Committee on Public Enterprises of the
Parliament of the Democratic Socialist Republic of Sri Lanka
Major Issues & Problems Identified
Comments & Directives of the
COPE
operations of institutions. He also
stated that the audit on performance
carried out with regard to the
Kaldemulla
Furniture
Manufacturing Plant and some of
the Audit observations pointed out
by
them
had
been
fully
implemented, some were partly
implemented
and
some
observations have not been
implemented yet.
2.
It was revealed by the Committee The CAO/AO stated that the
that the Corporation had developed system has been functioning
a new Enterprise Resource Planning successfully.
(ERP) system, when pointed out the
shortcomings of the earlier costing
system used for standard costing of
furniture in the Kaldemulla Factory.
3.
It was questioned on obtaining
sawn timber and logs from the
outstation
depots
without
identifying the requirements of the
factory and keeping them without
utilizing.
The CAO/AO stated that the
factory had to have a buffer stock
of sawn timber in order to
supply/deliver the bulky orders
within a short period of time.
4.
Although there had been an
improvement in the factory after the
performance audit report, a loss of
Rs. 13.4 million had been incurred
by the furniture factory in 2014.
The CAO/AO explained that due
to overhead expenditure it is
difficult to make a profit, but there
had been instances where they had
been able to come up to the breakeven level.
The Committee was of the
opinion that they should go for all
island programmes by introducing
promotional
schemes.
The
Committee also wanted the
CAO/AO to check whether the
production of the furniture meets
the market demand.
41
Parliamentary Series No…..
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Major Issues & Problems Identified
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A query raised by the Committee
with regard to the supplying of
furniture and fittings to the
Government institutions.
The CAO/AO stated that they had
already submitted a Cabinet Paper
to that effect; the Cabinet had
given instructions stating that the
corporation had to go for
competitive bidding.
The Committee wanted the
CAO/AO to re-submit the Cabinet
Paper and directed the Treasury
representative to re-consider it and
explore
the
possibility
of
requesting from other institutions
to give priority when buying
furniture from the STC.
National
Gem
&Jewellery 18th November 2014
Authority – Efficiency of the
procedure for issue of licences for
Gem Industry and the effect of
Gem Industry including the
abandoned
mines
on
the
community and environment
Ministry of Environment
Renewable Energy
and
1.
The Auditor General explained the
performance audit carried out with
regard to the granting of licenses for
the gem industry and the adverse
environmental
effects
caused
through the abandoned gem mines
relevant to the National Gem
&Jewellery Authority. It was
further revealed that the special
report with the audit observations
was submitted to the Authority
andaction had not yet been taken
regarding some observations.
2.
The different layers of soil had not The CAO/AO stated that in the
been kept in order and haphazardly process of mechanized mining,
stacked around the mines at the the soil layers must be deposited
42
Report from the Committee on Public Enterprises of the
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Major Issues & Problems Identified
Comments & Directives of the
COPE
excavating of mines. Therefore the within the land in order to fill pits
mines could not be closed as same in a way that one layer is above
as the layers of soil had been.
the other layer. Finally the surface
soil would be laid on the top of
the mine. The CAO/AO further
said that the security retained by
the Authority would be released
only
after
confirming
the
completion of the refilling had
been come to its’ original
position.
3.
CCTV cameras had not been
installed in the mine premises and
full time Mine Supervisors had not
been deployed for the supervision
of mines as per the Circular issued
in March 2012.
The CAO/AO explained that the
CCTV cameras had not been
implemented due to practical
difficulties, but action had been
taken to provide digital cameras to
field officers, supervisors and
mine engineers to obtain the
necessary photographs and videos.
It was also stated that the mining
supervisors had been recruited on
the basis that one supervisor
required to carry out supervisory
work in several mines located in
the particular area.
4.
The Committee discussed regarding
the illegal and abandoned mines
and the breeding of mosquitoes due
to the failure of closing excavated
gem mines properly.
It was informed that most of the
abandoned mines had been
identified as illegal mines and
action had been taken to close
these mines and rehabilitate the
lands by using the security
deposits. However there had been
some illegal mines which cannot
be closed due to various issues.
Rehabilitation of Hunuwalawatta
mine owned to the Kahawatte
Plantation had not been carried
out as entering to the land had
been prohibited by a court order.
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Major Issues & Problems Identified
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The Committee observed that many
mines had not been closed down or
rehabilitated as explained when
compared
with the Auditor
General’s
report
and
the
photographs included therein and
the report submitted by the
Authority had been contradictory.
The CAO/AO informed that those
photographs had been taken
recently by Divisional Offices and
agreed to look into the matter
further.
The reserved areas had been
destroyed
by
illegal
mine
excavators in the reserved area for
rivers, canals and other water
sources.
It was mentioned that a special
team had been established to carry
out raiding activities and action
had been taken to implement
some projects, auctions etc. to
reduce the damage through illegal
mine excavations.
Auditor General also informed the
Committee that he would also
send officials to get the present
situation of these mines.
The Committee was of the view
that the Director Board should
look into these matters.
7.
44
The current status of the following The CAO/AO gave the following
mines was enquired.
information.
(i)
Hunuwalawatte
(i)
Rehabilitation work could
not be carried out as
entering to the land had been
prohibited by a Court order
due to a dispute between the
Kahawatte Plantations and
the
SabaragamuwaSamanDevala
ya for the ownership of the
land.
(ii)
HunuwalaManchadigahawatt
e
(ii) The security placed by them
had been confiscated as the
license had been expired in
February 2014 and action
would be taken to close the
mine within two months.
Report from the Committee on Public Enterprises of the
Parliament of the Democratic Socialist Republic of Sri Lanka
8.
Major Issues & Problems Identified
Comments & Directives of the
COPE
(iii) PathagamaPolgahawela
(iii) The Gem pit had been closed
and rehabilitated. A new
license had been obtained for
a gem mine.
(iv)
Kirielawatte.
(v)
TheppanawaPahalageAluthw
atte
(vi)
UduwatteDambuluwana
(iv) The mine had been closed and
rehabilitated.
(v) It had been identified as an
illegal excavation. The mine
had been closed and
charged for the offence. A
new license had been
obtained for a gem mine.
(vi)
A license had been obtained
for a gem mine it had been
under implementation.
(vii) TheppanawaOvitigama
(vii) The mine had been under
implementation.
(viii) UdawattaSambuluwana
(viii) The mine had been under
implementation.
The shortcomings of the work of The CAO/AO was directed to
the Authority were discussed.
adopt new methodologies to
overcome them and to consider
the following points when
preparing them.
(i)
A job description including
all necessary duties needs to
be given to the mine
supervisors attached to the
Divisional Offices.
(ii)
Weekly/monthly
reports
from the mining supervisors
need to be obtained and an
Officer from the Ministry
need to be appointed to
monitor the work of the
officers attached to the
Divisional Offices.
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(iii) Officials of the Divisional
Offices should co-ordinate
with the
Development
Officers of the line Ministry
attached to the Divisional
Secretariats.
The Committee wanted the
CAO/AO to submit a detailed
report explaining the progress of
these recommendations after
having discussed with the Board
of Directors of the Authority.
9.
The Committee questioned about a
Deputy Director General who does
not
possess
the
required
qualifications.
The Committee directed to the
CAO/AO to look into this matter
and submit a report to the
Committee.
SL Institute of Development 19th November 2014
Administration (SLIDA)
Ministry of Public Administration &
Home Affairs
1.
There had been 43 vacancies and 06 Some of the vacancies had already
excessin the cadre as at 31st been filled and a new Scheme of
October, 2014.
Recruitment had been submitted
to the Department of Management
Services for approval. The CAO
informed the Committee that once
the approval was granted, action
would be taken to fill the
vacancies accordingly.
2.
The Committee revealed that as per The CAO/AO stated that the
the Cabinet decision, formulation of Financial and Administrative
Financial
and
Administrative Regulations had already been
Regulations had not been complied prepared and after obtaining the
with and instead, Government approval of the Governing
Financial Regulations and the Council it had been submitted to
Establishment Code had been the Treasury for approval.
followed
by
the
SLIDA.
Meanwhile, the provisions in Shops
46
Report from the Committee on Public Enterprises of the
Parliament of the Democratic Socialist Republic of Sri Lanka
Major Issues & Problems Identified
Comments & Directives of the
COPE
and Office Employees Ordinance
had been followed in respect of
only annual leave and overtime
allowances of officers. But it had
not been applied in respect of duty
hours and office time leading to
deprivation of considerable number
of duty hours.
3.
Although the estimated cost of the
Training of Trainers Course had
been Rs. 9,942,625/-, approval of
the Treasury had been obtained
only for Rs. 3,493,320/-. However,
the course had been conducted
incurring the total estimated cost
while spending a sum of Rs.
6,763,915/- without the Treasury
approval, and that amount had been
shown in the accounts as receivable
from the Treasury.
The CAO/AO stated that an extra
amount of money had to be spent
since they had to provide the said
training for additional number of
trainees.
4.
Rs. 1,094,000/- had been paid to the
contractor who had stopped the
work halfway when only the work
valued at Rs. 350,000/- had been
certified for the total contract of Rs.
2,970,000/- in respect of painting
the walls of the administrative
building and the hostel.
As the CAO/AO stated that the
renovation work had then been
completed, he was directed to
submit the source documents to
certify the work in relation to the
above payments to the Auditor
General.
5.
The Committee pointed out that
some of the objectives of the
Institute such as; to develop a
competent cadre of supervisors and
support staff throughout the public
service, to assist public sector
Institutions in reviewing their
Organizational and Management
System had not been adequately put
into practice by the management.
The CAO/AO stated that;
The Committee was of the
opinion that as the transaction had
been done without prior approval,
it could not be obtained from the
Treasury. The CAO/AO was
directed to write to the Treasury
and regularize the matter.
(i)New approaches to ensure the
training impacts and system to
improve the co-ordination (Public
Sector Linkage Programme) had
been introduced.
(ii)The SLIDA as well as the
Ministry of Public Administration
had recently issued Guide Books
for the Development Officers and
Circulars
for
Divisional
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Secretariats.
6.
The Committee had had a
discussion on the strategies in place
to ensure bilingual skills of
Government Servants.
The CAO/AO was directed to see
whether volunteer classes in
training languages are organized
at Divisional Secretariat level.
University of Moratuwa
20th November 2014
Ministry of Higher Education
1.
A sum of Rs. 4,435,700/- receivable
from the Department of Sports
Development for the construction of
the Indoor Sports Stadium of the
University of Moratuwa had not
been recovered, even though 06
years lapsed.
The CAO/AO stated that although
a letter had initially been received
from the Ministry of Sports
stating that the provisions for the
construction of the above indoor
stadium would be incurred by
them, the final payments had not
been paid by them. So the
University had completed the
constructions by using their own
funds and when the university had
requested the due amount of Rs.
4.4 million in several occasions,
the officials of the Sports Ministry
had informed them that no
provisions had been made by
them in the estimates to pay this
amount and also due to lack of
documents, they were unable to
pay this amount. As sucha request
had been madeto the Treasury
with the approval of the
Governing Council, through the
line Ministry to obtain approval to
write-off this amount.
2.
Allowances amounting to Rs.
7,886,560, Rs. 9,698,927/- and Rs.
9,050,612/- had been paid in the
years 2011, 2012 and 2013
respectivelyto the employees who
were not directly involved in such
The CAO/AO stated that they had
taken action to adopt a
methodology as to how the
allowances be made to the
employees.
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Report from the Committee on Public Enterprises of the
Parliament of the Democratic Socialist Republic of Sri Lanka
Major Issues & Problems Identified
Comments & Directives of the
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courses from the income received
from the postgraduateand short
terms courses in contrary to
theletter issued by the Ministry of
Finance in January 2003 which says
that approval of the Treasury had to
be obtained to pay allowances to the
employees.
The Committee wanted the CAO
to obtain approval from the
Treasury to that effect, and issue a
general circular by the UGC to all
the universities.
Uni - Consultancy Services
Company had been established
within the premises of the
University in contrary to the
University Act No. 16 of 1987, and
even
without
the
Cabinet
approval.The Auditor General
pointed out that since this company
had been carrying out some of the
activities of the University,
consolidated accounts had to be
submitted to the Auditor General,
which had not been done.
The CAO/AO stated that it was an
independent company which was
not profit oriented, set up by the
members of the staff to carry out
the activities of the university in a
speedy manner. The AO further
added that as per the earlier
directive, a proposal had already
been submitted to the UGC to
obtain Cabinet approval.
4.
There was a delay in releasing
results of the examinations held by
the University during the period
2010 to 2013.
The CAO/AO having accepted the
point, stated that at present around
90% of the results are released
within 03 months. Heagreed to
take action to release the results
on time in future.
5.
A lecturer attached to the university
had functioned as a special
consultant in a Govt. institution
from April 2011 to March 2014
without obtaining the due approval
as per the provisions in the UGC
Establishment Code and Higher
Educational Institutions. He had
obtained
Rs.2,770,350/remuneration
while
obtaining
remuneration amounted to Rs.
3,952,323/- for the same period
from the University.
The AO stated that investigation
into this matter was being carried
out by a 03 member committee
appointed by the Governing
Council, and action would be
taken accordingly.
3.
The Committee wanted the
CAO/AO to expedite the matter.
The CAO/AO was directed to
submit a report after the
completion of the investigations to
the Committee.
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Major Issues & Problems Identified
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The arrival and departure had not
been signed by the academic staff
as per the UGC Establishment
Code; as such the salaries and
allowances paid to them during
each year could not be verified in
audit. The Committee also noted
that leave records of the academic
staff were not being maintained by
the University.
The CAO/AO stated that leave
records of every category had
been
maintained
by
the
University.
Development Lotteries Board
21st November 2014
The Committee was of the view
that if the practice of signing the
attendance by the academic staff
was
in
existence,
such
irregularities would have not been
occurred.
Ministry of Finance & Planning
1.
There was an excess
employees in the cadre.
2.
A Marketing Consultant and a
Confidential Secretary had been
appointed when there was no
provision in the cadre for such
appointments.
3.
The Committee enquired whether The CAO/AO stated that the
the studio constructed at a cost of studio was being used for several
Rs. 16 million was used at present.
programmes and there were some
more improvements to be done.
of
45 The CAO/AO stated that there
was no excess staff at present as
the activities of the institution had
expanded. He also stated that the
approval of the treasury had been
sought to increase the cadre.
The CAO/AO stated that those
officials had been appointed on
the approval of the Board of
Directors only for a period of six
months due to the extra workload
required to be handled with the
introduction of new lotteries and
also due to the additional work
involved with online lottery
project.
The Committee decided to resummon the responsible officer
along with those who had been in
the previous management to
further examine about the
construction of the studio.
50
Report from the Committee on Public Enterprises of the
Parliament of the Democratic Socialist Republic of Sri Lanka
Institutions Examined by
the Sub Committee I
51
Parliamentary Series No…..
52
Report from the Committee on Public Enterprises of the
Parliament of the Democratic Socialist Republic of Sri Lanka
Major Issues & Problems Identified
Post
Graduate
Agriculture
Institute
Comments & Directives of the
COPE
of 04th November 2014
Ministry of Higher Education
1.
The Committee enquired
as to
why the audited financial statement
had not been included in the Annual
Report furnished.
The CAO/AO stated that they had
submitted the Annual Reports
according to the new format
obtained from the Ministry of
Higher Education and there was
no room to include the audited
financial statement.
2.
The Internal Audit unit had not
been established to strengthen the
internal control of the financial and
operating activities of the Institute.
The AO agreed to discuss the
matter with the UGC and appoint
an Internal Auditor to the
Institution.
3.
Fixed assets totaling
to Rs.
1,415,374/- related to 04 projects
had not been transferred to the
relevant institute in terms of the SL
Agricultural
Research
Policy
Council Agreement. Out of the
Fixed assets purchased, the assets
which cannot be used for the
general purpose of the institute such
as laboratory equipment have been
transferred
to
the
relevant
departments and others have been
transferred temporarily.
The CAO/AO informed the
Committee that before the end of
this year they would take action to
complete this task.
4.
An amount of Rs. 949,224.89had
been spent for purchasing chemicals
and consumables. Fixed assets
purchased out of the funds of these
grants, the assets which cannot be
used for the general purpose of the
institute
such
as
laboratory
equipment have been transferred to
the relevant departments and others
have been transferred temporarily.
The Committee was of the
opinion that the Institute should
take appropriate action and
directed to ensure that they inform
all the details to the Auditor
General before the next COPE
meeting.
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5.
There were only 21 students who
took part in 07 researches and no
expense had been made for internal
researches over the previous 05
years. Seven external researches
worth of Rs. 15,298,947/- had been
conducted during the year under
review.
The CAO/AO stated that they
have introduced a fund named
“Research Facilitation Fund” by
allocating Rs. 6,000,000/- which
was the 10% of the income of the
PGIAto encourage the students for
researches.
6.
The allowances had been paid for The CAO/AO stated that this
visiting lecturers without obtaining practice would not happen in
the approval to expedite the issuing future.
of results.
The Committee wanted the
CAO/AO to take the approval
from the UGC for the payments
made.
Post Graduate Institute of English
04th November 2014
Ministry of Higher Education
1.
The Committee enquired about non- The CAO/AO stated that the audit
functioning of the internal Audit of the PGIE was done by the
during the year 2013.
Open University of Sri Lanka and
an Internal Auditor was appointed
in April 2012.
2.
The following shortcomings of the The CAO/AO explained the
Institute were observed.
inability to start the programme as
the internal approval from the
(i) The action plan had not been Senate and the Council was not
furnished within the scheduled granted as the Senate meetings
period.
were not held from June to
September 2012dueto the Trade
(ii) Final examinations had not
Union actions of the academic
been commenced on time
staff.The courses would be
(iii) Delay in evaluation and release commenced as soon as the
approval of the UGC and the
of results
Senate was obtained.
(iv) Some Courses had not been
The CAO/AO was directed to take
commenced on time.
action to overcome those issues.
54
Report from the Committee on Public Enterprises of the
Parliament of the Democratic Socialist Republic of Sri Lanka
3.
Major Issues & Problems Identified
Comments & Directives of the
COPE
The Committee considered the
performance of the Institute from
the year 2006 to 2014 and the
number of students completed
postgraduate courses was not in a
satisfactory position.
The CAO/AO stated that before
2011 the PGIE was run by part
time acting staff.
Post Graduate Institute of Science
04th November 2014
Although 100 students had been
registered for the Postgraduate
Certificate Course in English
medium from 2006 to 2010, only
01 student had completed the
course at the end of the year 2010.
In
the
year
2012,
new
programmes had been introduced
and 19 students had completed
the course while 03 students were
completing the course. She further
added that in future they will have
ten programmes catering the
diverse needs of the people of Sri
Lanka.
Ministry of Higher Education
1.
An Internal Audit Unit with a view
to strengthen the Internal control
over the financial and operating
activities of the Institute had not
been established.
The CAO/AO stated that the audit
had been conducted by the
University of Peradeniya and the
Auditor General pointed out that it
would be better to do a mid year
audit annually.
2.
Even though the mileage fees that
can be paid for the use of private
motor vehicles at Rs. 12 per Km for
a petrol vehicle in terms of the
Public Administration Circular No.
9/2010 dated 07.06.2010, payment
had been made to visiting lecturers
at Rs.25 per Km, by the
management decision No.74 and an
overpayment of Rs. 147,318/- had
been made during the year.Further,
transport
allowance
of
Rs.
106,500/- had been overpaid
The CAO/AO stated that it was a
necessity to call over the qualified
lecturers and professionals in
island wide for some subjects and
they had to pay the transport
allowance accordingly.
The Committee directed the
CAO/AO to make every payment
according
to
the
relevant
Circulars.
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COPE
without proper basis in 11 instances
to the lecturers who participated in
the short term courses, contrary to
the above circular.
3.
The allowance of Rs.57, 900/- had The CAO/AO was directed to
been paid to the Librarian of the obtain the necessary approval.
Faculty of Science for working in
the library of the institute, contrary
to the circular No. 422 of the
University Grants Commission.
4.
It was observed a sum of Rs. 1, The CAO/AO was directed to
081,241/- as allowance for carrying obtain
approval
from
the
out coordination work of the Treasury.
institute and Rs. 54,471/- as
honorarium allowance had been
paid without relevant approval.
National Institute of Business 04th November 2014
Management
Ministry ofYouth Affairs & Skills
Developement
1.
There were 18 vacancies in the post
of Academic Consultants and 23
vacancies
in
Non-Academic
Executive grades as at 31st
December 2013. The Committee
enquired whether there had been
any effect for the performances of
the Institute.
The CAO/AO stated that it was
difficult to retain Academic Staff
due to the prevailing low salary
scales and lack of academic
freedom
compared
to
the
University academics. Further the
approval for the Non-Academic
staff had been obtained with the
intention of establishing new
branches.
The CAO/AO was directed to
prepare a proposal for Allowances
Scheme for the academic Staff
and send it to the Treasury.
2.
56
A sum of Rs. 111, 977/- due from a According to the CAO he had
Consultant who had resigned from been appeared in a fictitious name
the service had not been recovered. and had left the office without
Report from the Committee on Public Enterprises of the
Parliament of the Democratic Socialist Republic of Sri Lanka
Major Issues & Problems Identified
Comments & Directives of the
COPE
informing to the Institute in 2006.
It was further revealed that the
said person had been in prison for
06 months after being convicted
for a fraud taken place at the
Central Bank and when on bail he
had been worked as a Registrar at
the
Kotalawela
Defence
Academy. He further added that a
court case had also been filed
against him for the frauds done
when he had been in the NIBM
and they were unable to find
contact information of that person.
The Committee was of the view
that it was important to make the
public aware of that person and
informed the CAO/AO that they
could find the person through the
Commissioner of Elections.
National Institute of Language 07th November 2014
Education & Training
Ministry of National Languages &
Social Integration
1.
A schedule of fixed assets worth The AO stated that it had already
over Rs. 16 million had not been been preparedand agreed to
furnished to the Auditor General.
submit to the Auditor General
within 02 weeks.
2.
The financial position of the
Institute was not satisfactory as the
value of current assets had been
exceeded by the value of current
liabilities which showed a very high
figure of Rs. 36 million in the year
2013.
The AO stated that they had to
settledue payments pertaining to
huge amount of vouchers received
at the end of the year from
various Government Institutions
in the accounts of the next
year.He further added that
although the Treasury funds of Rs.
30 million had been allocated they
had received only Rs. 12 million
for the year 2012 and as such
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COPE
higher figure had been shown as
current liabilities in the accounts.
The matter had then been rectified
as the Treasury had released Rs.
10
million
thereafter
and
favourable figures would be
shown in the accounts of the year
2014.
3.
Action had not been taken to
recover a sum of Rs. 893,858/recoverable
from
a
former
Chairman who had resigned from
the post in the year 2010.
The CAO/AO stated that after
referring the matter to the
Attorney General he had informed
that as the Rs. 6,68,000/- had
already been paid by an Insurance
Company for the repairs of a
vehicle, a court case could only be
filed against him to recover the
balance amount.
TheCAO/AO wasdirectedto adjust
the accounts accordingly and
report back to the Committee
within a weeks’ time.
4.
58
It was emphasized that there was no
proper internal financial control
since only two officers had been
appointed and adequate work
delegation had not been done in the
Accounts Section of the Institute.
The CAO/AO stated that another
officer
had
recently
been
appointed for that section to
rectify the matter.
The Chairman suggested that it
would be better to conduct one
day Work Shop by the Auditor
General’s Department for the
officers in the Accounts Section
of the Institute to overcome the
shortfalls in the accounting
procedures.
Report from the Committee on Public Enterprises of the
Parliament of the Democratic Socialist Republic of Sri Lanka
Major Issues & Problems Identified
Comments & Directives of the
COPE
Official Languages Commission
07th November 2014
Ministry of National Languages &
Social Integration
1.
There had been 16 vacancies in the It was stated that action had
Cadre.
already been taken to fill the
vacancies.
2.
Action had not been taken with
regard to the directive given at the
previous COPE meeting to obtain
the covering approval or to recover
the payment of the illegal travelling
expenses of Rs.624,390/- from the
officers responsible.
3.
Withholding tax had not been The CAO/AO stated that action
charged from the commission had been taken to charge the tax
members.
w.e.f. 2014.
Ayurvedic Medical Council
The CAO/AO stated that they had
had a discussion with the Treasury
in order to obtain the approval, the
Treasury had informed that the
final decision will be intimated to
them in consultation with the
Salaries & Cadre Commission.
07th November 2014
Ministry of Indigenous Medicine
1.
Although a private firm had been
awarded with thecontract of
Rs.480,000/- to print 10,000
medical certificate books, in 2013
only 840 books had been used.
The CAO/AO stated that after the
publication of CODE of Ethics, it
had been made compulsory for the
doctors
to
issue
medical
certificates in the accepted form
and the Committee directed the
CAO/AO to keep the officers/
employees in the public sector
informed about this accepted form
in which medical certificates
should be submitted.
2.
The incentives exceeding Rs.
1800/- had been paid per month
violating the circular issued by the
Department of Public Enterprises to
the effect that the incentives should
not be paid exceeding Rs.1800/per month.
The CAO/AO stated that this had
been corrected in the year 2014
and action would be taken to
recover the amount exceeded.
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Report from the Committee on Public Enterprises of the
Parliament of the Democratic Socialist Republic of Sri Lanka
Institutions Examined by
the Sub Committee II
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Parliamentary Series No…..
62
Report from the Committee on Public Enterprises of the
Parliament of the Democratic Socialist Republic of Sri Lanka
Major Issues & Problems Identified
SL Council for
Research Policy
Comments & Directives of the
COPE
Agricultural 12th November 2014
Ministry of Agriculture
1.
The Act had not been amended The CAO/AO stated that in this
even upto 31st of October, 2014.
regard several meetings had been
held and the Council was of the
view that the particular matter
should be discussed with the
members of the staff and agreed to
finalize the matter within 2
months.
2.
Foreign funds had been collected to
a Bank Account maintained in the
name of CARP-ICRAFProject
without obtaining the Treasury
approval and as the case had been
handed over to the CID, the
Committee questioned the current
position.
3.
Although the Council had planned The CAO/AO stated that the
to award 22 foreign scholarships to situation had now been corrected
the value of Rs.18,722 million in and the scholarships are awarded
The CAO/AO stated that this
incident had happened before the
appointment of the new Board of
Directors in 2010. Though it had
been maintained in the BOC
Torrington Branch, no documents
had been available.Although
about Rs.200 million had come
only Rs.1.5 million had remained
in the Account by the time, the
case was handed over to the CID.
The CAO/AO further added that
the ICRAF situated in Kenya had
been maintaining this account and
they were not ready to open up a
new account. Meanwhile the
Coconut Research Institute had
made a request to transfer the
account to them as they had
entered into an agreement with the
ICRAF and the CAO/AO was
directed to obtain the approval
from the Treasury to do that,
subject to investigations carried
out by the CID.
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COPE
2010,
only
09
scholarships
amounting to Rs.8,746 million had
been awarded. The progress in the
year 2014 was also questioned.
under the agreement signed
between
Indian
Agricultural
Research Council and them. He
further stated that they had
planned
to
award
several
scholarships such as 15 study
visits and 20 short term trainings
to various Research Institutions
and also planned to award 05
scholarships for PhD next year.
Hector Kobbekaduwa Agrarian 12th November 2014
Research & Training Institute
Ministry of Agriculture
1.
The Committee having observed
that there were 77 vacancies
including 40 in the post of
Management Assistantsand 08
excess staff under the “other”
category by the end of the year
2013, enquired the current position.
It was mentioned that interviews
were being held to fill large
number of vacancies andthe
CAO/AO was directed to rectify
the matter early.
2.
The Committee enquired as to why
the Registrar which was a main
executive position in the Institute
had been workingon acting basis
over twoyears.
The CAO/AO stated that although
they had advertised twice, a
qualified person could not be
recruited as the salary was not
attractive, even though higher
qualifications with experience
were sought as per the existing
Scheme of Recruitment (SOR).
3.
Although the CAO/AO agreed to
consider the shortcomings pointed
out by the Internal Audit Unit at the
previous COPE meeting, answers
had not been given to 22 internal
The CAO accepted that there had
been a delayas the Accountant had
resigned from the Institute and
answers had been given to all the
audit queries related to the year
64
As the officials had not given
clear explanation on excess staff,
the Committee directed the
CAO/AO to re-check the details
of cadre position and submit the
correct details to the Auditor
General.
Report from the Committee on Public Enterprises of the
Parliament of the Democratic Socialist Republic of Sri Lanka
Major Issues & Problems Identified
Comments & Directives of the
COPE
audit queries from the year 2011 – 2013, while only 04 queries were
2014.
to be answered in the year 2014.
The CAO/AO was directed to:
(i) send a report to the Committee
after completing the Fixed Assets
Register within a month.
(ii) to answer the rest of the audit
queries by the end of November,
2014 and send the details to the
Auditor General.
The Committee suggested that an
Accounting Package could be
installed
to
overcome
shortcomings in the accounting
procedures.
4.
The amounts to be recovered from
12 officers who had given
scholarships, had been over Rs.20
million as at 31st October 2014 and
property bonds had also not been
signed with some of the officers
even in the year 2014 as agreed at
the previous COPE meeting.
The
Assistant
Registrar
(Programme) explained that the
said amount related to 12
defaulters who had been offered
scholarships during the period of
year 1987 - 2006 and the matter
had been referred to the Attorney
General.
5.
The Board of Survey had not been
conducted for the year 2011
regarding misplaced library books
valued about Rs. 11 million.
The CAO/AO stated that as per
the Board of Survey done in the
year 2010, 350 books had been
misplaced and the Board approval
had been obtained to write-off
part of the amount.
The Committee directed the
CAO/AO to complete the Board
of Survey for the year 2014 by the
end of the year.
6.
The Committee enquired as to why
only one project out of 27 research
projects stipulated in the Action
Plan for the year 2013 had been
completed and published, while
The AO having accepted the
delays stated that 10 research
projects had been published and
another 09 projects were to be
published from the projects
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Parliamentary Series No…..
Major Issues & Problems Identified
Comments & Directives of the
COPE
only 10 out of 38 in the year 2012 implemented in the year 2012. It
had been completed by 30th October was further stated that some
2014.
projects had been implemented on
the requests made by the line
Ministry
and
the
external
Institutions.
The CAO/AO was directed to
furnish the details to the Auditor
General.
National
Aquatic
Resources 12th November 2014
Research & Development Agency
Ministry of Fisheries & Aquatic
Resources Development
1.
Action had not been taken to fill 87 The CAO/AO stated that the
vacancies out of 443 vacancies.
vacancies
had
been
filled
according to the release of funds
by theTreasury.
The CAO/AO was directed to
discuss with the Treasury to
rectify those issues byJanuary
2015.
2.
3.
66
The investigations of the unusable
research vessel constructed at a cost
of Rs. 4,733,693/- and the
employees attached to that vessel
had
been paid
salaries
&
allowances
amounting
to
Rs.4,427,117/- up to 31st December
2013.
It was questioned about the
payment of
an advance of
Rs.3,729,233/- in the year 2011 for
the purchase of two 200 HP4 strobe
engines valued for Rs. 4.49 million
The CAO/AO explained that the
disciplinary inquiry had not been
finalized and the Bribery or
corruption
Commission
had
instructed them not to take any
actionuntil the investigation is
over.He further stated that some
modificationshave to be done to
the vessel worth of Rs.12 million.
The CAO/AO was directed to take
necessary action to sell it out
without spending more on it.
It was stated that the approval had
been taken to rent out those
engines and the documents were
being prepared for the agreement.
As the demand for the engine had
Report from the Committee on Public Enterprises of the
Parliament of the Democratic Socialist Republic of Sri Lanka
Major Issues & Problems Identified
Comments & Directives of the
COPE
without carrying out a feasibility been
low, the received prices
study.
were lower than the actual price.
The CAO/AO was directedto rent
it out as it would be the most
practical way.
4.
The Committee observed that As the CAO/AO stated that it had
aFixed
AssetsRegisterwas already been prepared, hewas
unavailable.
directed to submit the same to the
Auditor General annually.
5.
The Committee questioned about
the purchase of a stock of rails at a
cost of Rs.1,360,800/- for the
construction of a jetty at Kalpitiya
Research Centre.
The CAO/ AO stated that the jetty
had not been constructed and they
had sold the above stock, but a
loss of Rs.386,800/- incurred due
to the price fluctuation of the
scrap iron value at that time.
The CAO/AO was directed to
adjust the value in the accounts
accordingly.
6.
7.
The Committee observed that out of
the financial allocations received
for the capital expenditure, a sum of
Rs. 20,027,819/- had been utilized
for the recurrent expenditure of the
year, instead of being utilized for
the specified activities. Although
the main function of the agency was
to conduct research, they had spent
Rs. 69 million out of Rs.381 million
for this purpose in the year 2013.
The CAO/AO stated that due to
deficiencies of the recurrent
expenditure, the above mentioned
status had been occurred.
Four motor vehicles valued for
Rs.5,750,000/- remained idle in the
premises of the Agency over a
period exceeding one year.
The CAO/AO stated that although
arrangements had been made to
sell them out satisfactory offer
had not been received.
The committee was of the opinion
that the accounts should be
rectifiedaccordingly.
The Committee directed the
CAO/AO to re-value the vehicles
and take action to sell them as
soon as possible.
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8.
Comments & Directives of the
COPE
The Committee had had a The Committee was not satisfied
discussion on accounting system, with the prevailed accounting
shortcomings, etc. of the Agency.
system
and
stressed
the
requirement of a software package
for
updating the
accounts
expeditiously. Further,having paid
its attention to the number of
shortcomings/weaknesses in the
Agency, directed the CAO/AO to
take action to overcome all these
shortcomings before the end of
2014.
Sri Lanka Land Reclamation & 19th November 2014
Development Corporation
Ministry of
Development
1.
2.
3.
68
Defenceand
Urban
The Corporation had not recognized
the activities to be carried out to
achieve the objectives and targets
and the action plan had not been
preparedaccordingly. Further the
annual budget had not been
complied with the Corporate Plan.
The CAO/AO stated thatthey had
to go beyond the Action Plan due
to the special situations of the
country such as flood prevention
and as they had prepared the
Action Plan with the relevant
amendments,it would be sent to
the Auditor General.
The Committee observed that the The CAO/AO was directed to
Procurement plan prepared for the submit a detailed report as soon as
year 2011 was not a complete possible.
report.
The direction had been issued at the
previous COPE meeting to recover
Rs. 52 million from the debtors who
could be identified as recoverable
and to negotiate with the General
Treasury in connection with other
balance of Rs. 44 Million which
identified as unrecoverable; out of
the total debtor balance of Rs. 96
million remained outstanding and a
request had been made from the
Department of Public Enterprises to
The CAO/AO stated that the
balance to be recovered from the
debtors was Rs. 17 million by the
year 2011 which were older than 2
years.
The CAO/AO was directed to
write off the amount that could be
written off and clear the balance
sheet with the guidance of the
Treasury Representative if the
Treasury justifies the matter.
Report from the Committee on Public Enterprises of the
Parliament of the Democratic Socialist Republic of Sri Lanka
Major Issues & Problems Identified
Comments & Directives of the
COPE
write off the debtor balance of Rs.
28 million which remained
outstanding for over 10 years.
4.
Although a sum of Rs.30.9 million
had been recovered from the
Ministry
of
Economic
Development, action had not been
taken to recover the balance of Rs.
3.89 million from the Urban
Settlement Development Authority
and other balance of Rs. 3.17
million from the Department of
National Physical Planning.
The CAO/AO was directed to
inform the Treasury and take
necessary action to write off that
amount.
5.
It was revealed that the work of the
Enderamulla Urban Development
Project commenced at a cost of Rs.
21.14 million had been abandoned,
and although a direction had been
issued at the previous COPE
meeting to recommence the work,
action had not been taken
accordingly.
The CAO/ AO stated that as the
amount spentfor the above project
had not been received from the
relevant Institution, that amount
had already been written off with
the approval of the Director board.
A land with the extent of 3.5 acre
developed by the Corporation under
the
Mudun-Ela
Development
Project, had been encroached by an
outside party and constructed a
Kovil. Although a direction had
been issued to identify the parties
involved with the help of the
Divisional Secretary and acquire the
land or recover the cost of the land,
action had not been taken
accordingly.
The CAO/AO stated that as a care
taker for the Kovil had not been
appointed,
unable
to
act
accordingly.
6.
7.
The CAO/AO was informed to
take the prior approval from the
Treasury to write off such
amounts.
The CAO/AO was directed to
rectify the situation and inform
the progress at the next COPE
Meeting.
The Committee discussed about the The Committee was of the
debtor balances of the Corporation. opinion that the methodology
applied in the Ministries and
Departments to write off debtor
balances could not be applied as it
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COPE
is for the Public Enterprises,
guidelines need to be prepared
regarding the same.
The Auditor General informed
that the action should be taken by
the Treasury.
8.
The Corporation had recruited
employees on contract basis without
a proper approval of the
Department
of
Management
Services.
The CAO/AO stated that as the
Corporation had carried out works
related to the engineering field,
higher salaries had to be paid for
the engineers as the salary scales
in the private sector is higher than
the government sector.
The CAO/AO was directed to take
necessary approvals according to
the circulars.
9.
Construction work had not been
carried out as at 30.10.2014 even
though an advance amounting to
Rs. 489,000,000/- had been
obtained from an investor on an
Agreement
entered
into
on
27.06.2007 for the construction of a
housing scheme in a land owned by
the Corporation.
The CAO/AO stated that they had
had several discussions with the
investor regarding the reasons for
not commencing the works and by
then they were searching for a
new investor.
The CAO/AO was directed to
collaborate all the institutions in
the Ministry when they are going
to commence any project.
10.
The bills of the Beira Lake and The CAO/AO was directed to take
Bandarawela Town Centre Project necessary action to rectify those
had not been settled.
matters with the collaboration of
the Treasury as soon as possible.
11.
The Committee discussed on the The Committee having observed
profit earned by the Corporation.
that the Corporation had earned
Rs. 104 million of Net Profit
without being a burden to the
people and did a great service
with so many obstacles and had
paid its gratitude to the
Corporation for being functioned
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Report from the Committee on Public Enterprises of the
Parliament of the Democratic Socialist Republic of Sri Lanka
Major Issues & Problems Identified
Comments & Directives of the
COPE
without major irregularities.
National
Aquaculture 19th November 2014
Development Authority (NAQDA)
Ministry of Fisheries & Aquatic
Resources Development
1.
The Committee enquired the The CAO/AO explained the
reasons for non-filling of the 63 difficulty in filling of the
vacancies exists in the cadre.
vacancies at theprevailing salary
scales. As a solution to the
problem of resigning or leaving
the posts, they had taken action to
give training to the project
officers who had obtained
Advance Level qualifications.
2.
The current position of the The CAO/AO stated that they
arbitration for a value of Rs. 05 could conclude the matter within
million requested by the private the first part of the year 2015.
institution which occupied the
Aquaculture Center at Polonnaruwa
was questioned.
3.
The progress of the recovering of
the balance amounted to Rs.
4,284,351/- from fish seeds
breeding units out of Rs.
11,094,329/- spent by the NAQDA
for the construction of 25 fish
spawns units in 2006 was enquired.
4.
It was questioned about the The CAO/AO apologized for the
dishonouredcheque valued for Rs. matter and assured that similar
1,932,930/-,
written
without mistakes would not be repeated.
ascertaining the bank account
balance in 2013.
5.
The Committee queried about the
payment of 09 extra salary
increments to the five officers who
were served in 2006, in placing
The CAO/AO stated that the
recoverable amount had been
reduced up to Rs. 3,850,038/- and
action would also be taken further
to minimize the same gradually.
The CAO/AO stated that they had
placed those officers on new
salary steps as the approval had
been given by the Department of
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Comments & Directives of the
COPE
them on new salary steps.
Management Services.
The Committee directed to
forward the relevant documents to
the Auditor General for further
study.
6.
There was a loan balance amounted The CAO/AO stated that they had
to Rs. 6,922,220/- exceeding two taken necessary steps and enabled
years as at 31/12/2013.
to reduce the figure up to Rs. 3.7
million
by
the
time
of
examination.
Tea Small Holdings Development 19th November 2014
Authority
Ministry of Plantation Industries
1.
There were 19 vacancies in Staff
grade and 34 vacancies in NonStaff grade in the cadre of the
Authority.
The CAO/AO explained the
difficulties in filling vacancies
with qualified persons at the
prevailing low salary scales and
promised to fill the vacancies at
earliest possible.
2.
The progress of the recovery of
Rs. 9,873,192/- due from Small
Holding Development Societies
relevant to 102 vehicles supplied to
them on loan basis.
Rs.1.51
million
had
been
recovered up to then and the
CAO/AO agreed to take necessary
steps to recover the balance.
Further, he tabled a letter received
from
the
Attorney-General
informing to negotiate and recover
the dues without taking legal
actionsas those societies coming
under the purview of the
Authority, though the Committee
had directed to do so.
The
Committee
expressedits
dissatisfaction on that advice and
proposed to send a letter to the
Attorney-General informing the
dissatisfaction of the Committee
as it seems inappropriate.
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Report from the Committee on Public Enterprises of the
Parliament of the Democratic Socialist Republic of Sri Lanka
Major Issues & Problems Identified
Comments & Directives of the
COPE
3.
The Committee observed that the The CAO/AO stated that the
Authority had increased the subsidy replanted area will be increased
payment for tea replanting from
by the end of the year 2014.
Rs. 250,000/- per hectare to
Rs. 350,000/- during the period
from 2011- 2014, but the replanted
extent had not been satisfactory.
4.
The current position of the post of
Manager (Human Resources and
Administration) which had been
vacant since 27/04/2010 was
enquired.
The CAO/AO stated that the
vacancy had been filled.
The CAO/ AO was directed to
take necessary action to correct
the process of appointing an
officer on acting basis for the post
of Assistant General Manager
(Human
Resources
and
Administration)
and
paid
remunerations contrary to the
recruitment procedure of the
Authority.
Tea Research Institute of Sri 19th November 2014
Lanka
Ministry of Plantation Industries
1.
It was revealed that the accounts
relevant to the St. Jochim Estate
were doubtful and enquired the
current position.
According to the Accountant,
although some shortcomings had
been occurred when making
entries, no fraud had been taken
place as per the reconciliation
done up to then. He stated that by
then around 90% of the accounts
had been clarified and the
reconciliation would be completed
by the end of the year 2014.
The CAO/AO was directed to
submit the certified accounts with
supporting documents to the
Auditor General.
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2.
Major Issues & Problems Identified
Comments & Directives of the
COPE
The Committee enquired whether
the Institute could be continued
with 189 vacancies including 41 in
the staff grade positions.
The CAO/AO stated that at
present there had been only 180
vacancies of which 38 were in
executive grades. Some of them
were to be filled through internal
promotions and around 21
vacancies could not be filled as
the required qualification had not
yet been obtained by the relevant
staffmembers. He informed the
Committee that they had a
difficulty in retaining the staff due
to prevailing low salary scales and
the remote location of the
Institute. Therefore the existing
SOR was being amended.
The Committee recommended
that the Treasury should reconsider the ways and means to
ensure retaining professionals in
Government Institutions like TRI.
3.
Six machines imported in the year
1982 had been remained idle and
action had not yet been taken to
write off the value from the books.
The CAO/AO stated that those tea
processing machines had initially
been installed in estates to check
the suitability and were not
suitable to Sri Lankan conditions
and therefore could not be
introduced to the field. By then
they had written to the Treasury
through the Ministry for the
approval to write off the amounts.
The Committee directed the
CAO/AO to expedite the process.
4.
74
It was enquired as to why action
had not been taken to recover the
receivable
amount
of
Rs.
22,090,600/- from 10 officers who
had obtained academic leave with
full salary and had not completed
the required period of compulsory
The following information was
given.
(i) Two officers were then being
working
in
Government
Universities and a decision had
been taken to settle the matter
with regard to one officer after
Report from the Committee on Public Enterprises of the
Parliament of the Democratic Socialist Republic of Sri Lanka
Major Issues & Problems Identified
Comments & Directives of the
COPE
service thereafter.
referring the letter sent by the
relevant University to the Board
of Directors and court case was
being pending regarding the other
officer.
(ii) One officer had passed away.
(iii) One officer and the
guarantees of him had gone
abroad and the relevant bond had
not been signed properly. Court
case was still pending.
(iv) Two officers were paying the
amounts in installment basis while
some had agreed to settle the dues
from their provident fund.
Under mentioned directives were
given by the Committee.
(i) to settle the matter through a
Board resolution as they were
serving to the Government if the
said officers had completed the
compulsory service period.
(ii) to write off the due amount
from the officer who had passed
away, with the approval of the
Treasury.
5.
Although labour wages of Rs. 2.7
million had been paid to 14 officers
at higher ranks in the year 2013
based on the Board approval
granted in the year 2007, either
approval of the line Ministry or the
Treasury had not been obtained.
The CAO/AO stated that the said
payment had been initiated in
1960’s for the maintenance of
Bungalows of the officers and by
then payment was being done
only for 13 officers.
The Committee directed the
CAO/AO to get the ratification if
they need to continue the payment
and informed to use another
appropriate name instead of
labour allowance.
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6.
Comments & Directives of the
COPE
Extra leave had been granted to the The CAO/AO revealed that from
staff members of all categories.
the inception extra leave had been
granted due to the remote location
of the Institute.
The Committee having noted that
52 days of leave per year had also
been granted to the minor staff,
directed to see whether on which
rationale it had been done and
could be rectified.
7.
76
A sum of Rs.2.5 million had been
spent for conducting awareness
programmes under the Mechanized
Tea Leaf Plucking Project and
enquired whether there was any
duplication of activities with the
Tea Small Holdings Development
Authority (TSHDA).
The CAO/AO stated that it was a
joint project to popularize
mechanization implemented in
collaboration with other relevant
institutions under the special
budget announcement in 2012 and
about to implement the 2nd phase
of the project. He further
elaborated that the TRI was the
technology generating arm while
transfer of technology was being
done as a joint effort with other
institutions like TSHDA.
Report from the Committee on Public Enterprises of the
Parliament of the Democratic Socialist Republic of Sri Lanka
Institutions Examined by
the Sub Committee III
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Report from the Committee on Public Enterprises of the
Parliament of the Democratic Socialist Republic of Sri Lanka
Major Issues & Problems Identified
Rehabilitation
of
Properties
and
Authority
Comments & Directives of the
COPE
Persons, 04th March 2015
Industries
Ministry
of
Resettlement,
Reconstruction and Hindu Religious
Affairs
1.
Rehabilitation Authority Fund
The Committee observed that as per
the Rehabilitation Authority Act, a
Fund for rehabilitation of affected
persons,
reconstruction
and
rehabilitation of damaged properties
had not been established.
The CAO/AO stated that after
obtaining the consent of the line
Ministry, it would be submitted to
the Treasury for approval.
2.
Un-recovery
of
Interest
amounting to Rs. 30.72 million on
the Investment of Rs. 128 million
in the NHDA (1990 – 1995)
The CAO/AO stated that the
Authority have had many
correspondence with the NHDA
on the recovery of the above
outstanding amounts and also had
written to the Attorney General to
take legal action. He added that
after the formation of the new
government, they had now
decided to discuss the issue at
ministerial level, and to come to a
decision.
The Committee noted that the
investment amounting to Rs. 120.9
million and interest thereon
amounting to Rs. 38.2 million had
not been recovered as at 31st
December 2014.
Since this matter had been
pending for nearly 20 years, the
Committee directed to start early
discussions with the NHDA
officials and resolve the matter
and if not to take action to write
off the outstanding balance with
the necessary approval.
The Committee wanted the
CAO/AO to submit a report on the
progress of the same within a
week’s time.
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3.
4.
Major Issues & Problems Identified
Comments & Directives of the
COPE
Un-recovery of Property Loan
amounting to Rs. 586,907/- from a
Female Officer
It was revealed by the Committee
that the said officer had filed a court
case against the action taken by the
Authority, and since the verdict had
been given in favour of the officer,
the Authority had to deposit a sum
of Rs. 473,880/- as compensation,
and enquired the current position.
The CAO/AO stated that they had
decided to appeal against the
judgment given in favour of this
officer.
It was observed that although the
Cabinet had decided to write off the
loan amount of Rs. 76.6 million
granted to the displaced persons due
to July 1983 violence which had not
been recovered, the Authority had
not taken action as per the Cabinet
decision.
The CAO/AO stated that the
Cabinet had approved to write off
this amount under the Financial
Regulations, as such they had
written to the Dept. of Budget
seeking approval of Secretary to
the Treasury. Since they did not
receive any response even though
they had sent many reminders,
they had spoken to the Director
General of the Public Enterprises
recently.
The Committee was not satisfied
with the explanation given by the
officials of the Authority and
wanted the CAO to go through the
correspondence carefully and
advice
the
legal
officers
accordingly prior to appealing the
judgment, and furnish a report to
the Committee explaining the
current position by next week.
The Committee decided to
summon the then Treasury
Representative of the Director
Board before the Committee.
(The special meeting was held on
06/30/2015 at 11.30 a.m. as
directed by the Committee.
There
the
then
Treasury
representative explained in details
the problem they had faced in
writing off large amounts as there
were no regulations for same. The
Committee directed to the
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Report from the Committee on Public Enterprises of the
Parliament of the Democratic Socialist Republic of Sri Lanka
Major Issues & Problems Identified
Comments & Directives of the
COPE
Secretary of the Committee to
write to the Treasury to solve this
kind of problems.)
5.
Although the Authority had planned
to provide a loan of Rs.
745,000,000/for
5,707
beneficiaries under the Self
Employment Loan Scheme, only
Rs. 167,233,000/- among 1,202
beneficiaries had been granted.
The CAO/AO stated that this loan
scheme had been commenced in
2010 on a Cabinet decision. The
funds for this loan scheme be
provided to the Bank of Ceylon as
and when the earlier investments
are being matured and as such the
total loan amount would not be
received by the Bank at once. He
further added that under this loan
scheme Rs. 570 million had been
provided for 3450 beneficiariesby
now and although they had further
recommended
number
of
beneficiaries to be provided loans
under this new scheme, it takes
around 3 months to complete the
process.
The Committee directed the
CAO/AO to submit a detailed
report on the manner the
Authority had granted loans under
this scheme for the last 05 years
within two weeks to the
Committee
including
the
following;
(i) The percentage of loans
granted, both in terms of
number of beneficiaries, the
amount,
(ii) The percentage of loans given
to males/females/widows and
the performance rate of these
categories.
6.
It was revealed that out of Rs. The CAO/AO stated that since the
200,000,000/- received from the event in granting compensation
General Treasury for the payment was held in the Colombo District,
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Major Issues & Problems Identified
Comments & Directives of the
COPE
of compensation for the year 2014,
only Rs. 188,094,294/- had been
spent for the payment of
compensation on behalf of death,
injured and damaged properties,
where Rs. 1,383,769/- and Rs.
1,698,820/- had been spent for food
and transport which had accounted
under
the
payment
of
compensation.
they had to provide food and
transport
facilities for
the
beneficiaries. On further inquiry
he stated that Rs. 2.9 million had
to be paid as E.P.F. and E.T.F.
arrears.
The CAO/AO was directed to
regularize the matter by obtaining
the Treasury approval as the
money provided for a specific
purpose had been spent for
irregular transactions.
The
Committee
having
a
discussion on the payment of
compensation,
directed
the
CAO/AO to submit a report of all
types of compensations paid by
every district to the Committee
and also wanted the CAO/AO to
discuss with the officials of the
LLRC, and to find out the
recommendations of the ICRC,
with regard to the dead and the
missing persons.
7.
The Committee suggested to see
whether they could expand the role
of the Rehabilitation Authority
where there would be a formal
responsibility for re-integration, and
submit a Cabinet paper to this
effect.
The Committee wanted the
CAO/AO to submit a report on the
action taken with regard to the reintegration to the Committee
within two weeks’ time.
Ranaviru Seva Authority
06th March 2015
Ministry of Defence
1.
82
The Committee enquired whether
action had been taken to fill the
vacancies
of
the
post
of
Administrative Officer, Accountant
and Project Management etc.
The CAO/AO stated that the
interviews and other matters of
recruitment had been finalized and
the vacancies would be filled soon.
Report from the Committee on Public Enterprises of the
Parliament of the Democratic Socialist Republic of Sri Lanka
Major Issues & Problems Identified
Comments & Directives of the
COPE
2.
The Committee noted thatonly The CAO/AO was directed to
03Audit Committee meetings had regularize the system to hold
meetings quarterly.
been held in the year 2014.
3.
The Committee enquired as to why
the Data Base consisting the data of
disabled, killed or missing soldiers
of Three Forces and Police in action
and their dependentshad not been
completed yet.
The CAO/AO explained the
progress of preparing the Data
Base and he was directed to
submit a progress report on same
by 10th June 2015.
4.
The Committee questioned about
the requirement of permanent
houses or suitable lands for
construction of houses for Ranaviru
families who do not have houses.
The CAO/AO stated that action
had been taken to fulfil those
requirements through Ranviru
Sansada Societies which were
situated in every divisional
Secretariat.
The Committee needed the latest
information in a new format and
directed the CAO/AO to expedite
the matter.
5.
The Committee discussed about the
current procedure of school
admissions of children of the
Ranaviru families.
6.
Some shortcomings in granting The CAO/AO was directed to
advance for contractors and calling grant contracts according to the
tender bids were revealed at a guidelines in future.
random check done by the Auditor
General’s Department.
The Committee advised the
CAO/AO to inform the full
requirement of quota of Defence
Ministry to the Education
Ministry as early as possible to
enable them to grant the balance
of same to other students and to
send a report to the Committee
with the developments made for
this direction.
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Botanical Garden Trust Fund
06th March 2015
Ministry of Tourism &Sports
1.
84
The Committee questioned as to
why an electrically operated gate
fixed by National Engineering
Research & Development Centre
spending Rs.1,364,586/- in the year
2002 with the view to issue
entrance tickets for foreign tourists,
had not been in operation.
The CAO/AO stated that it had
been planned to operate that gate
with the assistance of the Mobitel
Company in accordance with the
M-ticketing System.
Report from the Committee on Public Enterprises of the
Parliament of the Democratic Socialist Republic of Sri Lanka
Index
85
Parliamentary Series No…..
86
Report from the Committee on Public Enterprises of the
Parliament of the Democratic Socialist Republic of Sri Lanka
Index
A
Atomic Energy Authority
………………….
32
Airport & Aviation Services (Sri Lanka) Ltd.
………………….
36
Ayurvedic Medical Council
………………….
59
Bank of Ceylon
………………….
25
Botanical Garden Trust Fund
………………….
84
………………….
38
………………….
50
Housing Development Finance Corporation (HDFC)
Bank
………………….
29
Hector Kobbekaduwa Agrarian Research & Training
Institute
………………….
64
National Gem & Jewellery Authority
………………….
42
National Institute of Business Management
………………….
56
National Institute of Language Education & Training
………………….
57
National Aquatic Resources Research & Development
Agency
………………….
66
National Aquaculture
(NAQDA)
………………….
71
Open University of Sri Lanka
………………….
27
Official Languages Commission
………………….
59
B
C
Central Cultural Fund
D
Development Lotteries Board
H
N
Development
Authority
O
87
Parliamentary Series No…..
P
………………….
………………….
31
53
………………….
………………….
54
………………….
and ………………….
82
79
………………….
………………….
40
46
………………….
63
………………….
68
Tea Small Holdings Development Authority
………………….
72
Tea Research Institute of Sri Lanka
………………….
73
………………….
48
Paddy Marketing Board
Post-Graduate Institute of Agriculture
Post-Graduate Institute of English
Post-Graduate Institute of Science
55
R
Ranaviru Seva Authority
Rehabilitation of Persons,
Industries Authority
Properties
S
State Timber Corporation
Sri Lanka Institute of Development Administration
(SLIDA)
Sri Lanka Council for Agricultural Research Policy
Sri Lanka Land Reclamation & Development
Corporation
T
U
University of Moratuwa
88
89