Interview with Auditor General Gamini Wijesinghe: A supreme audit institution is the need

Dictatorial powers to AG is a wrong perception :

By Manjula Fernando

The National Audit Bill, one of the hundred day pledges of the National Unity Government, is still struggling after a year, to overcome the initial Cabinet hurdle before it can march its way to Parliament.

Commending the Government for making his office independent from political interference, Auditor General Gamini Wijesinghe in an interview with the Sunday Observer warned against moves to transfer some of his proposed powers to a special committee.

"It is not a feasible option. The Auditor General's constitutional powers cannot be outsourced," he said.

The Excerpts of the interview:

Q: How long will it take for the National Audit Bill to reach Parliament? Has it been watered down further ?

A: That is one of the unanswerable questions. The trade unions are constantly taking up this issue. Even yesterday (Wednesday) they had a discussion with the Speaker. They are slated to meet the Prime Minister's Secretary as well. The Speaker had promised to ensure that it reaches Parliament without further delay, and assured his fullest support.

Q: Where is the Bill now, is it with the Cabinet or at the Prime Minister's office?

A: I suppose it is in the PM's office. The final draft is yet to reach Cabinet for approval. It has gone back and forth. When it reached Cabinet for the first time, a few months ago, it was referred to the Cabinet subcommittee. They had discussions with the Auditor General, the Attorney General and the Legal Draftsman and prepared the final draft. That draft was approved by the Cabinet subject to certain changes. It has again been referred for further amendments.

From what I gather the clause that empowers the Auditor General to issue a directive of surcharge, to recover losses incurred by bad decisions of public officials, is still being discussed.

The provisions to maintain a special fund for the Auditor General's Department to support special investigations, was withdrawn initially, because the Finance Ministry stood in the way. The current contention is over the proposed surcharge.

This committee is headed by Senior Advisor to PM Charitha Ratwatte. We have not been summoned by the Committee so far. There might be another amendment proposed by the committee. Some claim the provisions in the Bill give dictatorial powers to the Auditor General. But that is a wrong perception.

Q: Do you think someone wants this Bill to suffer a still birth. Who is scared of the 'National Audit Act' which is in the offing?

A: There were initial moves to prepare an Audit Act in 2003. The latest version was prepared in 2013. When this government came to power it was expedited under the 19th Amendment.

It was one of the items in the Unity Government's 100 - day program. This is the first time during the past 200 years, the Auditor General's mandate, 'good governance', came in tune with the sitting Government's political vision. The law provides for oversight powers over the offices headed by the legislators. It has to be approved by the same law makers. It is not easy.

Q: What is the necessity to pass this Bill ?

A: The Bill covers four areas. The Auditor General's office is the sole authority, to maintain accountability in the state sector. Although this office has been in existence for over 200 years, the mandate of the Auditor General and his office is not defined by any written law. The Constitution has no place for the Auditor General's office. Therefore, the main objective of the process is to write the law.

The Bill has defined, who the Auditor General is, what his powers are, how he functions and the objectives of his office.

The AG's Department was only responsible for financial accountability in the past. But, the proposed law provides jurisdiction over their performance as well. There will be checks on security systems.

The UN recognises that every country must have a Supreme Audit institution. We have fulfilled many of the criteria, only a few are missing.

There are provisions to transform the Department into a Supreme Audit Institution. This Act contains relevant clauses, one of which is financial independence from the Finance Ministry, so that the annual estimates will be prepared by the Department and approved by Parliament through the Speaker. It gives us freedom to investigate the Treasury more independently.

There is also administrative independence from the Public Service Commission (PSC). We have proposed to transfer these powers to the Audit Service Commission.

The Bill has also defined the administrative powers of the Audit Service Commission. In addition, it empowers the Auditor General to recommend a surcharge.

These powers are already there, currently vested with the Ministry Secretaries. In terms of a circular issued in 1993 by Finance Ministry Secretary R.Paskaralingam, the Ministry Secretaries who are the Chief Accounting Offices have been empowered to recover losses incurred due to financial mismanagement, from the relevant officers.

This law has never been exercised. There is not a single case filed under these regulations since its inception. Since these regulations are somewhat dormant, it has been decided to transfer these powers to the Auditor General.

The new Act will not withdraw any powers vested with the Secretaries under the financial regulations. But the Auditor General will have powers to see if there has been any loss to the government through any transaction.

The current contentious issue is over these surcharge powers. I don't feel any resistance from politicians but the Chief Accounting officers seem to be alarmed.

The Department is completely paralyzed because the Audit Services Commission has not been formulated yet. Auditor General is the ex-officio Chairman of the Commission and there are four other Commissioners. It is operating but the Commission cannot fully execute its mandate.

Q: Do you think the provisions to surcharge will be withdrawn before the Bill reaches Parliament?

A: I do not know. We are not informed of what is currently taking place. It seems that the Finance Minister and the Justice Minister are planning to set up a separate committee to implement the surcharge powers.

It is not a feasible option. The Auditor General's constitutional powers cannot be outsourced. I feel there should not be any attempt to dilute the powers of the Auditor General - if they do, the ultimate objective of good governance, for which this government has stood for, will be lost.

We have not proposed the powers to recommend a surcharge to the Auditor General's office. That is demanded by the civil society and other pressure groups. We requested only financial and administrative independence. Surcharge powers over the public service will be an additional burden on this Department. Already we have to look after 1,500 files. Nevertheless we are ready to serve the public.

Already the Auditor General has surcharge powers over universities, Pradeshiya Sabhas, etc.

Q: What are the challenges in fulfilling the duties of your office at present ?

A: There are stumbling blocks in achieving good governance. COPE is making a major contribution, which is a positive trend and helps our work.

Q: Do you face any resistance trying to carry out your mandate ?

A: So far we have not faced any political resistance but there is some doubt over this new approach of the Auditor General. The public sector is used to only finance auditing. We are now asking for details of their annual performance. I see that it is somewhat confusing for them.

Q: Good Governance, will it be a reality in the Sri Lankan context ?

A: You will recall, there was a major controversy over the way the former government obtained loans. There were allegations that the Treasury was kept in the dark and details of these transactions were shared among a close circuit of people.

There were no official records of the transactions. It happened due to the mismanagement of the then existing system.

There are strict guidelines and dictates on fiscal policy, no one is allowed to get loans without the approval of the Finance Minister. These regulations were ignored during the last two decades.Various state institutions have been borrowing money from different partners without the knowledge of the Treasury.

At present, we are making an effort to convince the bureaucracy that their performance and all transactions must be in keeping with the existing rules and regulations. If the law is outdated, they must change the law.

It is not proper to try and justify that it had been the norm for many years. If the limit for entertainment allowance is Rs.500, no one can spend more than that without amending the law. In most state institutions the governing law is outdated, which badly reflects on their performance.

Changing the mindset of public servants will be the biggest challenge in achieving good governance. Ninety five percent of the public servants are supportive of these changes that we have proposed, but the 5% of the corrupt are far more powerful.

Q: Are you satisfied with the response by the government for your investigations so far, for instance the Central Bank bond issue ?

A: My concern is to investigate and issue a report, when there is a request. I report to Parliament. Any follow up action is the duty of Parliament. COPE is taking up most of the issues regarding lapses on the part of public officials. They issue directives, to rectify existing flaws, in consultation with the Auditor General. There is a positive development in that sense.

Q: Is it possible for you to call for binding powers to make your role more effective ?

A: We are not proposing powers to take action against wrongdoers.

The Chief Accounting Officer is responsible for recovering even the surcharge. We will only issue a certificate of surcharge. But if the recommendation is not adhered to, we can notify Parliament.

Q: Do you think COPE and PAC are toothless tigers at present?

A: I think you don't have to 'bite' all the time, if 'barking' is sufficiently carrying out the job. They have powers, though there may be room for improvement. COPE is making plans to change Standing Orders to give them more teeth. It will take place shortly. Already they have drafted the amendments.

Q: Has there been a consultation process with the Auditor General, with regard to the restructuring of state enterprises such as SriLankan and Mihin Air?

A: Up to now no. It is a good proposal, since the Department has the expertise to advise as to how these loss making institutions can be revived. I personally believe that institutions such as, the Railways, Sri Lankan Airlines, Ceylon Electricity Board and Petroleum Corporation should be reviewed taking into consideration their public service. It should not be viewed purely on financial aspects.

The service they render should also be given a value. In addition, the taxes they pay the customs Department, the VAT component and employees' salaries must be added. When we consider all that, they cannot be termed loss making enterprises. We have to subsidize and re-structure them.

Q: Do you think a fully armed Auditor General in Sri Lanka is only a dream ?

A: So far we have not faced any political interference. There is a lot of independence. We have had the freedom to do our job satisfactorily. Except for the Audit Bill which has met with some stumbling blocks, we have achieved many things.

If we put the system in order, more than 15% of the Government expenditure can be saved. Hence, the Government must strengthen the Auditor General's office and ensure capacity building so that we can perform our oversight duty even better.