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Sunday, 03 July 2016





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Government Gazette

No intention of politicizing AG's office - Auditor General

The Auditor General Gamini Wijesinghe who has become the cynosure of all eyes after the Committee on Public Enterprises (COPE) sought his opinion over the Central Bank Bond issue, recently stirred up a hornet's nest by saying the Government had exceeded the Parliament-set ceiling on State borrowings. Observers said he seemed to be on the war path with the good governance government.

However, in an interview with the Sunday Observer last week, he refuted this claim saying that he was enjoying the freedom to be vocal and independent under the present government, although there were contentious issues with the Finance Ministry.

"I have no intention of politicizing the office of the Auditor General. Political parties may try to take advantage of the situation but my intention is to do an honest job of work," said.

Excerpts of the interview:

Q: There seems to be a dispute between the Auditor General and the Finance Minister. The Finance Minister had a meeting with you on Friday. Has everything been settled after the meeting?

A: I prepared my 2015 report on 'Financial statements' and submitted it to the Finance Ministry last May. It was going to be one of the annextures in the 2015 Annual Report. On May 30, the Report was published in the ministry website. Later, it was tabled in Parliament and I think it was the JVP who raised the observations made by the Auditor General on state borrowings.

Till then, no one had noticed that there was a controversy on state borrowings. We made an observation that borrowings had exceeded the parliament approved limits by Rs.1.5 trillion in 2015. In fact, in the previous year (2014) too, the limit was exceeded by Rs.1.1 trillion.

The calculations were done according to set guidelines in the 'Appropriation Act' and there is no discrepancy in the methodology used. I stand by the observations made by the Department.

Q: Did you manage to iron out the issues?

A: No. The Finance Ministry argued that loans that were repaid within the same year should not be added to the amount of borrowings. They have borrowed Rs.100 billion in January 2015 and repaid that amount. But the Appropriation Act which authorises the raising of loans inside and outside the country, clearly indicates that calculations should be made considering the 'aggregate' of all 'proceeds' within that year. Repaying a loan will not qualify the amount to be omitted from the Report.

The Ministry must either change the wordings in the Act or raise the ceiling of state loans without contradicting the Auditor Genenral's report. State borrowings are not my concern but putting out an accurate audit report is my concern.

Q: Following the JVP expose, the Auditor General was summoned to the Finance Ministry. There were claims that you were questioned by the Finance Minister?

A: No. That is a complete misinterpretation of what happened. I recently met Prime Minister Ranil Wickremesinghe in Parliament to explain the Report, this particular meeting was attended by Finance Minister Ravi Karunanayake, Secretary to the Prime Minister and the Finance Ministry Secretary.

After my deliberations, the PM understood that something was amiss. He asked whether I could explain my observations to the ministry staff. I accepted that. I was not summoned by the Minister. The meeting could have taken place at the Auditor General's office but we were not worried about protocol.

Q: Did you settle the issue at this meeting at the Finance Ministry?

A: The officials did not accept our position. They wanted us to admit that we had made a mistake. The Ministry has decided to appoint a committee comprising Deputy Treasury Secretaries and officials of the Auditor General's Department to look into this matter. I am waiting for the Terms of Reference to nominate a person.

Some bureaucrats think the Auditor General is under their purview. The Auditor General should be above bureaucracy and not below them.

Q: Were you contemplating resigning at some point?

A: What do you mean ?

Q: Did you make a statement to that effect recently?

A: What I said was if anyone wants to remove me, they are free to do so. I am not going to hang on to this job. I have three more years in this position but I am ready to go home anytime. I have worked with honour. This is my 31st year in the public service. I have sacrificed my retirement to serve the country.

I have no intention of politicizing the office of the Auditor General. Political parties may try to take advantage of the situation but my intention is to do an honest job of work.

Q: The President has taken a decision not to renew the term of Central Bank Governor Arjun Mahendran. In this backdrop, the investigations against him over the Bond issue will cease to continue ?

A: I have prepared a report giving my opinion at the request of COPE. The full report runs into 1,251 pages. COPE was handed over a summarized version. COPE unanimously agreed to accept the Report. We did not call for a financial forensic analysis on my Report. It was not necessary, it was an open case. But if COPE needs to cover that area, they can call for such expertise. On July 5, COPE will re-convene and decide.

Q: Did you get all the documents you required from the Central Bank to prepare the audit on the Bond issue?

A: Not at the initial stages but later on, upon COPE's intervention and insistence the CB released the documents. I appreciate the role played by COPE.

Q: Will you be asked to appear before the Public Accounts Committee as well on the Bond issue?

A: That too will be decided by COPE at the next meeting. I am ready to appear before any committee.

Q: Have you made any recommendations in the Report?

A: Yes there are many, I have to think about the value for state money. The future decisions over fiscal matters may be based on these recommendations in the report. COPE will issue its report based on the Auditor General's opinion and it will be in the public domain after July 5.

The sensitive information from the Central Bank has been omitted from the Report submitted to COPE. But the Report to the Speaker is uncensored. The Finance Ministry may refute the conclusion in my report, in that case COPE will decide a way forward.

Q: In the line of duty have you been under pressure from the government?

A: No I haven't. Even if I face such pressure I don't take it seriously. I feel there is more freedom today. I feel free to express my honest opinion.

Q: The long overdue new Audit draft Bill was to be submitted to Cabinet this week. Did it get the green light ?

A: I don't know. To my knowledge it has not been presented. We were hopeful even last week that the Cabinet will get to see the draft Bill and it will be approved. It is currently lying at the Prime Minister's office and due to some reason it has been going back and forth. The Department is seeking independence from the Finance Ministry over budgetary allocations. We are seeking the Speaker's intervention in this so that our oversight role would be without any strings attached. It is to do with salaries and other incidental expenses. Further, we have asked for a special fund to support incidental expenses when handling major cases such as the Central Bank bond issue.

Then we need not be at the mercy of the Finance Ministry. Whatever left of this fund will be emptied to the Consolidated Fund (Treasury) at the end of each financial year.

This proposal is in keeping with the UN standards to transform the Auditor General's Department into a Supreme Audit Institution.

I think the bureaucracy is standing in the way to block this Bill. They are against some of the powers the Auditor General is going to gain when the new Act is in place, to hold state officials accountable for the decisions and actions that might cause financial loss to the state.

The Auditor General will be empowered to recommend a surcharge to recover the loss, if it is proved that the officer acted arbitrarily.

If this law is in place there will be less room for corruption.

Q: Do you feel that there is resistance within the Government in getting the Act passed in Parliament?

A: I haven't come across any other form of pressure, except for resistance from the Finance Ministry and some ministry secretaries.

If there are concerns these can be raised at the Parliament stage. We put our heart and soul to it but now we are on the verge of giving up.


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