Parliamentary Series No. 119
Of
The Seventh Parliament of
The Democratic Socialist Republic of Sri Lanka
(First Session)
First Report
From
The Committee on Public Enterprises
Presented by
Hon.DEW. Gunasekara
Chairman of the Committee
On 01st of December, 2011
Composition of the Committee on Public Enterprises First Session of the Seventh Parliament
1. Hon. DEW Gunasekara (Chairman)
2. Hon. (Mrs.) Pavithra Devi Wanniarachchi
3. Hon. A.D.Susil Premajayantha
4. Hon. (Dr.) Rajitha Senaratne
5. Hon. Chandrasiri Gajadeera
6. Hon. A.P.Jagath Pushpakumara
7. Hon. T.B.Ekanayake
8. Hon. Mahinda Amaraweera
9. Hon. S.M.Chandrasena
10. Hon. (Dr.) Mervyn Silva
11. Hon. Lasantha Alagiyawanna
12. Hon. Sarana Gunawardena
13. Hon. Weerakumara Dissanayake
14. Hon. Lakshman Kiriella
15. Hon. Karu Jayasuriya
16. Hon. Ravi Karunanayake
17. Hon. (Al Haj) A.H.M.Azwer
18. Hon. Sajith Premadasa
19. Hon. Sunil Handunnetti
20. Hon. Arjuna Ranatunga
21. Hon. M.T.Hasen Ali
22. Hon. A.Vinayagamoorthy
23. Hon. Dayasiri Jayasekara
24. Hon. (Ven.) Athuraliye Rathana Thero
25. Hon. Seeniththamby Yoheswaran
26. Hon. Namal Rajapaksa
27. Hon. Eran Wickramaratne
28. Hon. (Prof.) Rajiva Wijesinha
29. Hon. E.Saravanapavan
30. Hon. Sujeewa Senasinghe
31. Hon. (Mrs.) Rosy Senanayake
REPORT FROM THE COMMITTEE ON PUBLIC ENTERPRISES OF THEPARLIAMENT OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA______________________________________________________________________________
Content
� Preface 1
� General Observations 4
� List of Appendixes 16
∗ Appendix-A : Institutions examined 17
� Main Committee 17
� Sub Committee I 20
� Sub Committee II 21
� Sub Committee III 23
� Major Issues of the institutions
∗ Appendix-B : Issues identified by the Main Committee
� National Gem & Jewellery Authority 25
� State Mortgage & Investment Bank 25
� University Grants Commission 26
� Ceylon Fisheries Corporation 26
� Sri Lanka Rupavahini Corporation 26
� Samurdhi Authority 27
� University of Sri Jayawardenapura 28
� University of Moratuwa 29
� National Institute of Business Management 30
� Coconut Cultivation Board 30
� Agriculture & Agrarian Insurance Board 31
� Open University of Sri Lanka 32
� Buddhist & Pali University of Sri Lanka 32
� Hector Kobbekaduwa Agrarian Research 33
& Training Institute
� Ceylon Shipping Corporation 34
� Cey- Nor Foundation 34
� Lanka Sathosa Ltd. 35
� Sri Lanka Telecom 35
� Sri Lankan Airlines 35
� Sir John Kotalawela Defence University 36
� Sri Lanka Savings Bank 36
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� Mihin Lanka Ltd. 37
� Hingurana Sugar Industries 37
� Sri Lanka Rubber Manufacturing Export Corporation 38
� Rajarata, University of Sri Lanka 38
� Paddy Marketing Board 39
� Independence Television Network & Lakhanda Radio 39
� Janatha Estates Development Board 40
� Kahatagaha Graphite Lanka Ltd. 40
� National Paper Company Ltd. 40
� B.C.C.Lanka Ltd. 41
� Lanka Salu Sala Ltd. 41
� Sri Lanka Broadcasting Corporation 41
� National Science & Technology Commission 42
� Chillaw Plantations Ltd. 42
� Coconut Research Board 43
� Uva Wellassa University 43
� Kalubovitiyana Tea Factory Ltd. 44
� University of Jaffna 45
� National Institute of Library & Information Science 45
� Post Graduate Institute of Agriculture 45
� Kantale Sugar Industries Ltd. 46
� Atomic Energy Authority 46
� South Eastern University of Sri Lanka 47
� Distance Learning Centre Ltd. 48
� Institute of Biochemistry Molecular Biology
& Biotechnology 48
� Eastern University of Sri Lanka 49
� Institute of Human Resource Advancement 50
� National Institute of Technical Education 50
� Post Graduate Institute of Science 51
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� National Centre for Advanced Studies in Humanities
and Social Sciences 52
� Sri Lanka Cricket 52
� Buddhasrawaka Bhikshu University 56
� Sri Lanka Foundation 57
� Institute of Fundamental Studies 58
� Bank of Ceylon 58
� National Institute of Education 60
� People’s Bank 61
� Sri Lanka Bureau of Foreign Employment 62
� Ceylon Petroleum Corporation 64
� State Timber Corporation 65
� National Water Supply & Drainage Board 68
� Ceylon Electricity Board 69
� National Transport Commission 71
� Water Resources Board 72
� University of Peradeniya 73
� SL Transport Board 74
� Geological Survey & Mines Bureau 74
� SL Ports Authority 75
� Development Lotteries Board 77
� Lanka Mineral Sands Ltd 78
� National Building Research Organization 79
� Airport & Aviation Services Ltd. 79
� Mahaweli Authority 79
� SL State Plantations Corporations 81
� National Lotteries Board 81
� University of Ruhuna 82
� University of Kelaniya 83
� Sri Lanka Institute of Development Administration 83
� Land Reform Commission 83
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� SL Land Reclamation Development Corporation 85
� Lanka Logistics Ltd 85
� Urban Development Authority 86
� Southern Development Authority 87
� Samurdhi Authority 88
� Wayamba University 89
� Post Graduate Institute of Pali & Buddhist 89
� National Savings Bank 90
� Lankaputhra Development Bank 91
� University of Sabaragamuwa 92
� RDA & Maganeguma Companies 93
� Telecommunication Regulatory Commission 94
∗ Appendix C: Issues identified by the Sub Committee I
� Institute of Policy Studies 95
� Local Loans & Development Fund 95
� Superior Court Complex Management Board 96
� SL Export Development Board 96
� SL Convention Bureau 97
� Securities & Exchange Commission 97
� Tower Hall Theater Foundation 98
� SL Institute of Local Governance 99
� SL Accounting & Auditing Standards Monitoring Board 100
� Udarata Development Authority 100
� SL Tourism Promotion Bureau 102
� Industrial Development Board 103
� Insurance Board of SL 104
� Rubber Research Board 105
� National Enterprise Development Authority 105
� Resettlement Authority 106
� Rehabilitation of Persons, Properties
& Industries Authority 106
REPORT FROM THE COMMITTEE ON PUBLIC ENTERPRISES OF THEPARLIAMENT OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA______________________________________________________________________________
� Condominium Management Authority 107
� National Dangerous Drugs Control Board 107
� Ranaviru Seva Authority 108
� SL Inventor’s Commission 108
� Janatha fertilizer Enterprise ltd 108
� SL Cement Corporation 109
� Lakdiva Engineering Co. Pvt ltd 110
� Lanka Phosphate ltd 111
� Milk Industries of Lanka Ltd (MILCO) 111
� HDFC Bank 112
� Elkaduwa Plantations Ltd 112
� Central Engineering Consultancy Bureau (CECB) 113
� Kurunegala Plantations Ltd. 113
� SL Export Credit Insurance Corporation 114
� SL Social Security Board 114
� Swami Vipulananda Inst. of Aesthetics Studies 115
� Consumer Affairs Authority 116
� National Apprt.& Indt. Traing Authority(NAITA) 119
� State Engineering Corporation of SL (SEC) 120
� Board of Investment (BOI) 121
� Central environmental Authority 124
∗ Appendix D: Issues identified by the Sub Committee II
� Botanical Garden Trust Fund 125
� Sri Lanka Institute of Printing 125
� Institute of Post Harvest Technology 126
� Land Survey Council 127
� National Aquatic Res. Research & Deve. Authority 128
� State Printing Corporation 128
� Colombo Commercial Fertilizer Company 129
� Sugarcane Research Institute 131
� Tertiary & Vocational Education Commission 131
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� National Engineering Research & Devep. Centre 132
� Sugathadasa National Sports Complex Authority 132
� Hadabima Authority of SL 133
� SL Institute of Textile & Apparel 134
� SL Council for Agriculture Research Policy 134
� Official Languages Commission 135
� Arther C. Clark Inst. for Modern Technology 136
� National Disaster Management Centre 137
� National Council for Elders 137
� Sri Lanka Press Council 138
� National Human Resources Development Council 139
� Textile Quota Board 140
� SL Freedom for Hunger Campaign Board 141
� Mantai Salt ltd 141
� Lanka Fabrics ltd 142
� National Secretariat for Persons with Disabilities 143
� National Inst. of Social Development 144
� Industrial Technology Institute 144
� SL Inst. of Tourism & Hotel Management 145
� SL Tourism Development Authority 145
� Paranthan Chemicals ltd 146
� SL Accreditation Board for Conformity Assessment 147
� SL Cashew Corporation 148
� West Coast Pvt. Ltd 149
� NHDA/NEMO 149
� State Development & Construction Corporation 151
� Public Utility Commission 153
� NLDB 154
� Institute of Technology 155
REPORT FROM THE COMMITTEE ON PUBLIC ENTERPRISES OF THEPARLIAMENT OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA______________________________________________________________________________
∗ Appendix E: Issues identified by the Sub Committee III
� Institute of Indigenous Medicine, Affiliated to the
� University of Colombo 156
� Sri Lanaka Ayurvedic Drugs Corporation 156
� Sri Lanka Institute of Advanced Technological Education 156
� National Transport Medical Institute 157
� Postgraduate Institute of Archeology 157
� Homeopathic Medical Council 157
� Postgraduate Institute of Medicine 158
� National Science Foundation 158
� Provident Fund for Buddhist & Pali University 159
� Post Graduate Institute of English 159
� University of Colombo School of Computing 159
� University of Colombo 159
� Universities Pension Fund & Provident Fund 159
� National Youth Services Council 160
� State Pharmaceuticals Manufacturing Corporation 160
� J. R. Jayawardena Centre 160
� Mahapola Higher Education Scholarship Trust Fund 161
� University of Visual & Performing Arts 161
� National Institute of Cooperative Development 161
� National Institute of Language Education & Training 161
� Gem & Jewellery Research & Training Institute 162
� Central Cultural Fund 162
� Institute of Construction Training & Development 162
� Thurusaviya Fund 162
� National Institute of Plantation Management 163
� Tea Research Institute of Sri Lanka 163
� Skills Development Fund 163
� Lady Lochore Loan Fund 163
� Information & Communication Tech. Agency of SL 164
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� Sri Lanka Handicrafts Board 164
� Ceylon Ceramics Corporation 164
� National Insurance Trust Fund 165
� National Crafts Council 165
� Selacine Television Institute 165
� Northsea Ltd 166
� Rakna Arakshana Lanka Ltd 166
� National Design Centre 166
� Tea Small Holdings Development Authority 167
� National Book Development Board 167
� Civil Aviation Authority 168
� Tea Shakthi Fund 168
� Sustainable Energy Authority 169
� Ceylon Fertilizer Company Ltd. 169
� Sri Jayawardenapura General Hospital 170
� National Film Corporation 170
� Ceylon Fishery Harbors Corporation 171
� National Institute of Fisheries & Nautical Engineering 171
� Sri Lanka Standards Institute 172
� Marine Environment Protection Authority 172
� National Child Protection Authority 173
� National Aquaculture Development Authority 173
� Co-operative Wholesale Establishment 174
� STC General Trading Co. Ltd 174
� State Trading (COOP)Wholesale Establishment Co. Ltd. 174
� Employees Trust Fund Board 175
� State Pharmaceuticals Corporation 175
� Palmyra Development Board 175
� National Library & Documentation Services Board 176
REPORT FROM THE COMMITTEE ON PUBLIC ENTERPRISES OF THEPARLIAMENT OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA______________________________________________________________________________
1
PREFACE
The Committee on Public Enterprises (COPE) for the First Session of the Seventh
Parliament presents its report to Parliament in terms of the Standing Order 126.
The Committee having had its first meeting on the 8th
June, 2010, decided to appoint
three Sub-Committees on the basis of the sectors of Finance, Agriculture & Media
and Education & Health, in order to expedite the process of examining Public
Enterprises. It was agreed that the Main Committee would examine large scale Public
Enterprises, whereas those small scaled Enterprises would come under the purview of
sub-committees and their findings would be reported to the Main Committee. The
Committee commenced examining the institutions on 4th
August, 2010, and held its
final sittings on November 18th
, 2011 for the 2010/2011 period.
Since the formation, the Committee examined 229 public enterprises as stipulated in
the table below.
Committee Chairman No of Examinations
Main Committee Hon.DEW Gunasekara 92
Sub Committee I Hon. A.D.Susil Premajayantha 39
Sub Committee II Hon.Karu Jayasuriya 39
Sub Committee III Hon.Lasantha Alagiyawanne 59
The Committee wishes to report to the Hon. Speaker and Parliament that it
successfully completed its assignment of work for the ensuing period within a period
of 16 months, an unprecedented record in the history of the Legislature.
It is the considered view of the Committee that the Report to be presented to
Parliament should receive urgent attention by all Chief Accounting Officers. Its
contents should be carefully noted by the Chief Accounting Officers who are required
to ensure that necessary action is pursued by the institutions under them. Senior public
officers are more vulnerable in the area of procument of supplies, tender procedures
and resulting in tender relevant awards and the execution of works thereof. It will not
be out of place to quote from the forward as embodied in the Code of the Financial
Regulations under the hand of the then Secretary to the Treasury, Mr.H.Jinadasa
Samarkkody, in January, 1966 when he wrote;
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“ The Minister of Finance has, therefore, ordered that in respect of
matters above mentioned, the Heads of State institutions may, in
appropriate circumstances, deviate from the procedures laid down
if he is satisfied that such action is necessary in the public
interest.”
Let us harken to our conscience whether we sincerely and in good faith do so in such
manner as not to compromise public interest for personal benefits.
It is also the view of the Committee that the Administration / Management should
give careful consideration to the general observations, comments and
recommendations made by the COPE. The specific recommendations in respect of
each one of those institutions should be discussed by the Board of Directors.
Audit is an integral part of the concept of transparency and accountability be it to
the share-holders, management, administrations or the legislature. Audit acts as an aid
to management and administration which are complimentary and not adversial. This
crucial aspect needs wider appreciation by all the stake holders.
This is a perceptible global trend to increase the mandate of the government audit
with a view to making the parliamentary control over the state finance more effective.
We are moving more and more from the usual regularity and transactions audit- to the
economy, efficiency, and effectiveness audit in view of the expanding plans and
programmes in the context of our socio- economic objectives. It needs to be
understood that what people expect from us is value for money which means nothing
but economy, efficiency, and effectiveness.
Therefore, it has become necessary to enhance the professional capacity of Audit so
as to assure the people of the social relevance and worthwhileness of Audit.
The Committee offers its thanks and appreciation to the Auditor General and his staff
and also the officials of the General Treasury (Department of National Budget and
Department of Public Enterprises) for their unstinted co-operation during the course
of our examinations. We believe that the Committee has been able to strengthen the
cause of public accountability to which Audit is committed and dedicated.
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Last but not least, the Committee expresses its deep appreciation of the hard work
done by the staff of COPE and of their relentless efforts to complete the assignment
before the deadline.
It is hoped that this report will generate interest and vigilance amongst the general
public to create awareness and alert amongst the public officers and stimulate the
Audit on the concept of transparency and accountability.
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General Observations & Recommendations
The following observations, which were generalized by considering the findings of
the examinations conducted by the main committee and the three sub committees,
were seemed to be common for the most of the Public Enterprises scrutinized and
many of the institutions had failed to correct them even though some of the
observations were stipulated in the previous COPE report as well.
These observations are based on the position prevailed at the time of examination.
(1) Corporate Plans & Action Plans
It was apparent that many of the institutions had not given due attention on the
Corporate Plan and the Action Plan. The Institutions such as, Lanka Sathosa, Ceylon
Shipping Corporation, Buddhist & Pali University, University of Sri
Jayawardenapura, National Aquatic Resources Research & Development Agency,
State Printing Corporation, Tea Research Institute and the National Dangerous Drugs
Control Board had not updated their Corporate Plans in accordance with the Public
Enterprises Circular as at the date of examination. A considerable number of
institutions had failed to achieve the targets in the Corporate Plan and some
institutions had prepared Corporate Plans merely for the submission.
Recommendation
It is essential for a public enterprise to prepare and update its Corporate Plan annually
and to strictly adhere to the Treasury Circulars when the plan is prepared. The line
Ministry may help the institutions to prepare the Corporate Plan and the Action Plan
and should monitor whether the targets stipulated in the Corporate Plan are achieved.
A committee may be appointed to review the performance of the Corporate plan at
least quarterly.
(2) Procurement Plan
It is the view of the Committee that not preparing the procurement plan in advance
has led to many issues such as purchasing unnecessary goods and goods in inferior
quality, making payments before the receipt of the goods etc. Therefore, it is
recommended to prepare the procurement plan soon after the allocations are made by
the budget.
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(3) Audit & Management Committees
It was observed that the Audit & Management Committee of many institutions had
not been functioning as expected and more over, several Enterprises did not have a
Committee appointed. The above Committee of the National Institute of Business
Management had met only once for the year 2010, and that of the Hector
Kobbekaduwa Agrarian Research & Training Institute, University of Sri
Jayawardenapura, Sri Lanka Press Council, Homeopathic Medical Council and the
Lanka Phosphate Co. Ltd had met only twice for the year 2010 as at the date of
examination.
Recommendation
The Committee should meet at least once in every three months. Further, the report of
the Audit & Management Committee must be tabled at the board meeting for the
attention of the chairman and the board of directors. The treasury representative of the
board, who is supposed to be the chairman of the Committee, needs to perform his
duty very efficiently with a view to upgrading the state of the institution. It is the view
of the Committee that the quality of the members of the Audit and Management
Committee needs enhancement. The Auditor General’s Department and the Treasury
should collectively give consideration to this need.
(4) Tabling of Annual Reports
Almost all the institutions summoned had not tabled the Annual Reports in time. The
Agricultural & Agrarian Insurance Board, Sri Lanka Institute of Printing and the SL
Institute of Local Governance had presented no annual report to the Parliament after
2005 as at the date of examination. For most of the other institutions, there were two
to three outstanding reports to be tabled before the parliament. Several Organizations
of which the government has only a proportion of total shares, such as Sri Lankan Air
lines, Mihin Lanka had not tabled the annual reports before the Parliament at all.
Recommendation
The legal provisions with regard to the tabling of annual reports lies in the section 14
of the Finance act No. 38 of 1971. Accordingly, it is imperative that any organization
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with government owned shares must prepare and table the annual reports in
Parliament as a means of showing public accountability. They must be tabled by 31st
of May or if it is not submitted before the stipulated date, the chairman and the board
of directors should be held responsible and the secretary of the ministry, as the chief
accounting officer, should take the final responsibility with regard to the timely
presentation of annual reports. We recommend that the chairmen who do not submit
annual reports in time should not be re-appointed as heads of institutions.
(5) Unsatisfactory Recovery of Debts and Receivables
Recovery of debts and receivables had been a serious issue for many of the
institutions. These receivables can be categorized as follows;
(1) Amounts to be recovered from the retired officers,
(2) Amounts to be recovered from the officers, who had been transferred,
(3) Amounts to be recovered due to breach of agreements,
(4) Amounts due from other government Institutions for services provided.
(5) Amounts to be recovered from external parties for services provided.
5.1 Amounts to be recovered from the Retired Officers
It was crystal clear that action could have been taken to collect the particular dues at
the time of retirement through the pension or from any fund payable to the employee
by the Government. Since the officers who were involved with the clearance process
had not performed their duties properly and consequently, the Government had lost a
good sum of money.
5.2 Amounts to be recovered from the officers who had been Transferred
The Committee observed several instances where the recovery of dues had been
neglected with regard to the officers those who had been transferred to other
Government institutions. Since these officers are still in the Government Service,
recovering possibility of the debts still exists. The documents relating to these debts
should have been sent to the present working places for further action. It is the
responsibility of the present management of such institutions to expedite the recovery
process.
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5.3 Amounts due to Breach of Agreements
Many Institutions relating to the higher education had confronted with this problem as
the officers, those who went abroad on study leave had not reported back to work
even after completing studies. The following table shows the debts recoverable, to the
nearest million, in several institutions due to breach of agreements, as at the date of
examination.
5.4 Amounts due from other Government Institutions
There were loans to be recovered from other Government Institutes which are
outstanding for several years. Mihin Lanka owed Rs. 10,000,000 to SL Rupavahini
Corporation which had not been paid to date. The amounts payable to Sri Lanka Ports
Authority by the Ceylon Shipping Corporation is Rs. 50 million and had been
displaying in final accounts for years without being settled. The Mihin Lanka had not
paid interest for a loan of Rs. 500 million obtained from Air Port and Aviation
Services (Pvt.) Ltd. The debts owed by the Sri Lanka Rubber Manufacturing &
Export Corporation to the People’s Bank and the General Treasury are Rs. 115
million and Rs. 1385 million respectively.
5.5 Amounts to be Recovered from External Parties
For not taking action in the proper time and weaknesses caused in follow up actions,
many external debtors had defaulted payments. It was observed that, in the State
Mortgage and Investment Bank, number of loans had been defaulted after paying only
one or two installments. Sri Lanka Rupavahini Corporation had not taken action to
recover Rs. 42,649,586 receivable from various political parties for the use of air
time.
Institute Amount/Million
University of Sri Jayawardenapura 69
University of Moratuwa 17
National Institute of Business Management 0.3
Open University 40
Hector Kobbekaduwa Agrarian Research & Training Institute 11
University of Peradeniya 105
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Recommendation
Strong attention should be focused on the clearance process before the retirements or
transfers of officers. There must be a proper co-ordination with the Department of
Labour and Department of Pensions to take necessary action to deduct these dues
from the pension or any other fund to which the relevant employee is entitled. If there
is no way of deducting the dues from the particular officer, action should be taken to
recover it from guarantors.
The Universities Act should be amended and conditions should be tightened to
prevent the breach of agreements by the officers going abroad on study leave.
Legal action should be taken against the external defaulters and if there is no way of
recovering the debts, their names should be blacklisted.
The Treasury may formulate a strategy for a loan scheme applicable to the entire
public service so that the burden on the particular institute in which the employee is
working, is released.
(6) Legal Issues
The Committee identified several cases where the public money had been wasted due
to legal issues. Spending money on constructions without getting the ownership of
lands verified, pending cases in courts which stands for several years making
payments to lawyers are the two dominant facts encountered. Open University of Sri
Lanka had spent Rs.18, 716,902 for the construction work of three regional centers on
lands whose ownership had been challenged. Due to a dispute arisen in the Buddhist
& Pali University in relation to an employee problem, Rs. 2 million had been spent so
far as payments for Lawyers but the case is still pending before the court.
Recommendation
It is recommended to get the dispute resolved through the Labour Tribunals and the
Attorney General should be consulted in the nick of time.
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(7) Financial Stability of Institutions
The Committee would categorize all the institutions summoned under the following
categories.
1. Institutions with a stable financial position.
2. Institutions running at a break even.
3. Institutions with decreasing revenue.
4. Institutions running at a loss.
In this report, more emphasis would be placed on the latter two as they are the entities
which seek immediate attention of the authorities.
7.1 Institutions with decreasing revenue
National Gem & Jewellery Authority, State Mortgage & Investment Bank, Sri Lanka
Rupavahini Corporation, Sri Lanka Telecom were several institutes which had
recorded a significant decrease in profits over the years. The most alarming fact is that
the decrease of revenue of institutes like State Mortgage & Investment Bank, Sri
Lanka Rupavahini Corporation and Sri Lanka Telecom is around 90% by the year
2009.
7.2 Institutions running at a loss/deficit
Out of the institutions examined by the Committee, the following institutions were
found to be loss making/deficit entities for the financial year 2010.
• Tea Small Holdings
Development Authority
• Tea Shakthi Fund
• National Youth Services
Council
• Thurusaviya Fund
• National Child Protection
Authority
• Janatha Estate Development
Board
• Ceylon Ceramic Corporation
• Sri Lanka Inventors
Commission
• Sri Lanka State Plantation
Corporation
• Urban Development Authority
• Mihin Air ltd
• Ceylon Petroleum Corporation
• Atomic Energy Authority
• Sri Lanka Mahaweli Authority
• National Dangerous Drugs Control
Board
• Sugathadasa National Sports
Complex Authority
• Sri Lanka Press Council
• National Gem & Jewellery
Authority
• Marine Environment Protection
Authority
• Sri Lankan Air Lines
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• Co-operative Wholesale
Establishment
• Paddy Marketing Board
• State Trading (wholesale)
Company Ltd
• Social Security Board
• Sri Lanka Ports Authority
• National Disaster Management
Centre
• Road Development Authority
• Sri Lanka Transport Board
• National Aquaculture
Development Authority
• Ceylon Fishery Harbors Corporation
• National Enterprise Development
Authority
• Industrial Development Board
• Samurdhi Authority of Sri Lanka
• Sri Lanka Cashew Corporation
• National Water Supply & Drainage
Board
• Ceylon Fisheries Corporation
• National Housing & Development
Authority
(Source-Auditor General’s Department)
Recommendation
Excessive staff, increasing expenditure, poor management, dearth of capital etc. had
been the prominent factors for this situation and introducing retirement programmes
to reduce the excessive staff and a radical restructuring is recommended.
(8) Unfilled Vacancies
Some of the institutions had not taken action to fill the approved carder of the institute
whereas in some institutes, an excessive staff was observed under some designations.
The following table illustrates the position of carder of some selected institutes at the
time of examinations.
Institute Approved Cadre No of Vacancies
Sir John Kotalawala Defence University 236 34
National Gem & Jewellery Authority 272 80
Hector Kobbekaduwa Agrarian Research &
Training Institute
210 63
Coconut Cultivation Board 802 195
Samurdhi Authority(2009) 27,684 3162
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Sri Lanka Rupavahini Corporation had 439 vacancies under 191 designations and
excess of 183 officers under 72 designations.
Recommendation
It is recommended to the Treasury to revise the carder of these institutions.
(9) Replies to Audit Queries
Majority of the institutes examined had neglected providing replies to audit queries
and it was the opinion of the Committee that many issues could have been tackled
upon a dialogue with the Auditor-General without bringing them before the
Committee.
Recommendation
Internal Auditor of the Ministry should focus attention on this issue, and examine
whether replies are sent properly and on time. The CAO must be held responsible for
the replying to audit queries on a timely basis. The Auditor General should bring any
lapse in not replying to audit queries in time, to the attention of the Chairman of the
board and the Secretary to the Ministry. The Auditor General should also be notified
on the action taken on the issues.
10. Amendment to the Standing Order 126
The Committee identified several instances where some enterprises such as West
Coast (Pvt) Ltd., Maganeguma Companies, and subsidiaries of CEB were of the
opinion that they do not come under the purview of the COPE as they are private
limited Companies incorporated under the Companies Act and also due to the fact that
they are not audited by the Auditor General and further, some institutions had sought
the opinion of the Attorney General as well.
The standing order 126 (2) states “ It shall be the duty of the Committee to
examine the accounts of the public corporations and of any business or other
undertaking vested under any written law in the government laid before
parliament , along with the reports of the Auditor General thereon.”
Being based on that, the Attorney General, when his opinion had been sought by the
LECO Company ltd. has stated in his letter dated 07.05.2009, that the duties of the
COPE are confined to examine the accounts of the public corporations and any
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business or other undertaking vested under any written law in the Government. He has
further stated that “ a public corporation in terms of Article 170 of the
constitution is defined to mean “ Any Corporation, board or other body which
was or is established by or under any written law other than the companies
ordinance, with funds or capital , wholly or partly provided by the government
by way of grant loan or otherwise.”
As such, the Committee recommends amending the standing orders empowering the
Parliament to summon above sort of companies irrespective of the fact that whether it
is audited or not audited by the Auditor General and instituted under companies law
or otherwise. If a particular institute has its own subsidiaries or associates, their
financial particulars must be disclosed in the parent Annual Report.
11. Mid Year Performance Report
It is recommended to the treasury to prepare a mid year performance report with
respect to each public enterprise and copies be sent to the chairman of the enterprise
and also to the secretary to the relevant ministry.
12. Revising Outdated Procedures
It is the view of the Committee that the efficiency of Public Enterprises had seriously
been affected by outdated procedures, methods adopted continuously from several
decades ago. For instance, much time is wasted in obtaining permission for carder and
the institute had to run for several years with vacancies
Further, it is recommended that the institutions should be permitted to hire employees
on fixed contracts with no provision for extensions or permanency unless appropriate
qualification for permanency is obtained. The institutions with adequate capacity and
mandates of an extensive nature should be permitted to employ personnel in terms of
needs, provided that these do not become an additional burden on public funds.
Investments made with dedicated funding of many institutions, in particular in the
Universities, are often questioned in audit queries due to the deviation from the formal
procedure of obtaining Treasury approval for such institutions. Therefore, it is
recommended that these procedures be revised and that the institutions with adequate
capacity and mandate of an extensive nature be empowered to take their own
decisions with internal procedures to ensure transparency and accountability.
REPORT FROM THE COMMITTEE ON PUBLIC ENTERPRISES OF THEPARLIAMENT OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA______________________________________________________________________________
13
13. Duplications
The Committee found several institutions that are redundant and much overlapped
with regard to functions. It is recommended that the Government review the need for
so many statutory institutions and combine those that work in similar areas while
laying down distinct responsibilities and targets and close down those which are a
drain on public funds.
14. Poor Supervision of the General Treasury
The Department of Public Enterprises and the National Budget are the controlling
arms of the public enterprises and various circulars and instructions are issued by
these two departments for the sake of good governance and proper functioning of the
institutes. An officer from the General Treasury is specially appointed to the board of
directors of every public enterprise. But, the Committee observes that, although the
instructions are issued by the Treasury, there is no proper supervision exercised by the
Treasury, to see that these instructions and guidelines are adhered to by the public
enterprises. Furthermore, it is recommended to pay special attention by the Treasury
to see whether the Treasury representatives of the director boards are efficiently
perform their duties in the boards.
15. Accountability
The Committee has observed in the case of several institutions that the responsibility
for various lapses is being passed on to the previous Management or Board of
Directors. The Committee considers that it is necessary to seek amendments to the
Standing Orders of the Parliament making it mandatory for the members of the
previous Management to present themselves before the Committee, when they are
summoned.
16. Unqualified Personnel
In the case of certain institutions, the Committee observed that the Chairman and / or
the Board of Directors are not qualified academically and professionally and many of
them do not have enough experience in the particular field. The Ministries are
requested to give their earnest considerations to this matter with all seriousness. The
attention of the Committee on High Posts is drawn to this matter, when
reappointments of officers are referred to the Committee.
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______________________________________________________________________________
14
17. PAYE Tax Payments
There were a number of institutions where the PAYE tax is paid by those institutions
on behalf of the employees, apparently on an understanding between the Treasury and
the relevant Trade unions. Conceptually, the PAYE tax should be borne by the
employee by virtue of the fact that he is a tax payer. This runs counter to the concept
of Income tax from the point of view of distribution of income. This will in effect
result in reduction of tax payable by the institutions since the profits are reduced by
such payments. It is obviously unfair by PAYE taxpayers of other institutions. Longer
this problem remains unsolved , more complications will arise in the future.
18. Private Auditors
In the case of institutions whose accounts are audited by private auditors, the Chief
Accounting Officer should ensure that copies of these Audit Reports are forwarded to
the Auditor General at the earliest.
19. Under utilization of funds.
Through the examinations of various public enterprises, it came into light that the
provisions granted by the Treasury amidst many difficulties are not properly utilized
by considerable number of institutions.
20. Abandonment of partly completed Projects & projects ended up with failure
Another deplorable source that leads to wastage of public funds is the abandonment of
partly completed projects on the way, after spending a large sum of money. For the
Kohila Vagura Project of the Southern Development Authority, Rs.5,627,923 had
been spent which has been suspended by now. In the examination of the Samurdhi
Authority, the Committee identified number of projects of such nature. Some projects
initiated by the Land reclamation and development Corporation had been ended up
with a loss and some projects had been suspended by now.
REPORT FROM THE COMMITTEE ON PUBLIC ENTERPRISES OF THEPARLIAMENT OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA______________________________________________________________________________
15
Recommendation
Many of such projects had been abandoned due to lack of Capital, legal issues, frauds
committed by the officers involved with projects and also due to changes made in the
initial design including modifications. It is recommended that a proper feasibility
study must be carried out to foresee every aspect which affects the successful
completion of the projects.
21. Amendments to the Acts
The goals and the objectives of an institute should be changed with on going changes
in the socio economic environment and the Committee observed that the activities of
the institutions cannot be extended or carried out properly due to the restrictions lying
in the relevant Acts under which they are incorporated. For instance, according to the
act of Sri Lanka Land reclamation and Development Corporation, the provision
available to stop illegal fillings of lands are limited.
Therefore, it is recommended to amend the relevant Acts enabling the Public
enterprises to function in a broader scope.
22. Granting Loans by Profit Making Institutions
It has been observed that certain profit making enterprises are in the habit of granting
loans to other institutions. The COPE was in view that this practice should not be
encouraged.
PARLIAMENTARY SERIES NO. 119
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16
Appendixes
Appendix A: List of Public Enterprises examined by each Committee
Appendix B: Major issues identified in the examinations with the
directions of the Main Committee
Appendix C: Major Issues & problems discussed & the directives of the
Sub Committee I
Appendix D: Major Issues & problems discussed & the directives of the
Sub Committee II
Appendix E: Major Issues & problems discussed & the directives of the
Sub Committee III
REPORT FROM THE COMMITTEE ON PUBLIC ENTERPRISES OF THEPARLIAMENT OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA______________________________________________________________________________
Appendix A
PARLIAMENTARY SERIES NO. 119
______________________________________________________________________________
17
No Institutions Examined by the Main Committee Date of Examination
1 National Gem & Jewellery Authority 4.08.2010
2 State Mortgage & Investment Bank 5.08.2010
3 University Grants Commission 17.08.2010
4 Ceylon Fisheries Corporation 18.08.2010
5 Sri Lanka Rupavahini Corporation 19.08.2010
6 Samurdhi Authority 20.08.2010
7 University of Sri Jayawardenapura 07.09.2010
8 University of Moratuwa 09.09.2010
9 National Institute of Business Management 23.09.2010
10 Coconut Cultivation Board 24.09.2010
11 Agriculture & Agrarian Insurance Board 06.10.2010
12 Open University of Sri Lanka 07.10.2010
13 Buddhist & Pali University of Sri Lanka 08.10.2010
14 Hector Kobbekaduwa Agrarian Research & Training
Institute
19.10.2010
15 Ceylon Shipping Corporation Ltd. 20.10.2010
16 Cey- Nor Foundation Ltd. 21.10.2010
17 Lanka Sathosa Ltd. 09.11.2010
18 Sri Lanka Telecom 30.11.2010
19 Sri Lankan Airlines 01.12.2010
20 Sir John Kotalawela Defence University 02.12.2010
21 Sri Lanka Savings Bank Ltd. 03.12.2010
22 Mihin Lanka Ltd. 07.12.2010
23 Hingurana Sugar Industries Ltd. 08.12.2010
24 Sri Lanka Rubber Manufacturing Export Corporation 09.12.2010
25 Rajarata, University of Sri Lanka 04.01.2011
26 Paddy Marketing Board 05.01.2011
27 Independence Television Network & Lakhanda Radia 20.01.2011
REPORT FROM THE COMMITTEE ON PUBLIC ENTERPRISES OF THEPARLIAMENT OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA______________________________________________________________________________
18
No Institutions Examined by the Main Committee Date of Examination
28 Janatha Estates Development Board 08.02.2011
29 Kahatagaha Graphite Lanka Ltd. 10.02.2011
30 National Paper Corporation Ltd. 23.02.2011
31 B.C.C.Lanka Ltd. 24.02.2011
32 Lanka Salu Sala Ltd. 08.03.2011
33 Sri Lanka Broadcasting Corporation 09.03.2011
34 National Science & Technology Ltd. 08.03.2011
35 Chillaw Plantations Ltd. 23.03.2011
36 Coconut Research Board 05.04.2011
37 Uva Wellassa University 06.04.2011
38 Kalubovitiyana Tea Factory Ltd. 07.04.2011
39 University of Jaffna 03.05.2011
40 National Institute of Library & Information Science. 05.05.2011
41 Post Graduate Institute of Agriculture 06.05.2011
42 Kantale Sugar Industries Ltd. 25.05.2011
43 Atomic Energy Authority 26.05.2011
44 South Eastern University of Sri Lanka 07.07.2011
45 Distance Learning Centre Ltd. 08.06.2011
46 Institute of Biochemistry Molecular Biology and
Biotechnology
10.06.2010
47 Eastern University of Sri Lanka 21.06.2011
48 Institute of Human Resource Advancement 22.06.2011
49 National Institute of Technical Education 23.06.2011
50 Post Graduate Institute of Science 24.06.2011
51 National Centre for Advanced Studies in Humanities and
Social Sciences
05.07.2011
52 Sri Lanka Cricket 06 07.2011
53 Sri Lanka Foundation 07.07.2011
54 Buddhasrawaka Bhikshu University 08 07.2011
55 Institute of Fundamental Studies 19.07.2011
56 Bank of Ceylon 09.08.2011
PARLIAMENTARY SERIES NO. 119
______________________________________________________________________________
19
No Institutions Examined by the Main Committee Date of Examination
57 National Institute of Education 10.08.2011
58 People’s Bank 11.08.2011
59 Sri Lanka Bureau of Foreign Employment 25.08.2011
60 Ceylon Petroleum Corporation 23.08.2011
61 State Timber Corporation 24.08.2011
62 National Water Supply & Drainage Board 26.08.2011
63 Ceylon Electricity Board 07.09.2011
17.10.2011
64 National Transport Commission 09.09.2011
65 Water Resources Board
20.09.2011
66 University of Peradeniya 21.09.2011
67 SL l Transport Board
22.09.2011
68 Geological Survey & Mines Bureau
23.09.2011
69 SL Ports Authority
06.10.2011
70 Development Lotteries Board
12.10.2011
71 Lanka Mineral Sands Ltd
12.10.2011
72 National Building Research Organization
13.10.2011
73 Air port & Aviation Services Ltd
14.10.2011
74 Mahaweli Authority
18.10.2011
75 SL State Plantations Corporations
19.10.2011
76 National Lotteries Board
19.10.2011
77 University of Ruhuna
20.10.2011
78 University of Kelaniya
20.10.2011
79 Sri Lanka Institute of Development Administration
21.10.2011
80 Land Reform Commission
21.10.2011
81 SL Land Reclamation Development Corporation
24.10.2011
82 Lanka Logistics Ltd
24.10.2011
REPORT FROM THE COMMITTEE ON PUBLIC ENTERPRISES OF THEPARLIAMENT OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA______________________________________________________________________________
20
No Institutions Examined by the Main Committee Date of Examination
83 Urban Development Authority
24.10.2011
84 Southern Development Authority
25.10.2011
85 Samurdhi Authority
25.10.2011
86 Wayamba University
28.10.2011
87 Post Graduate Institute of Pali & Buddhist 28.10.2011
88 National Savings Bank 31.10.2011
89 Lankaputhra Development Bank 31.10.2011
90 University of Sabaragamuwa 31.10.2011
91 RDA & Maganeguma Companies 14.11.2011
92 Telecommunication Regulatory Commission 15.11.2011
Institutions Examined by the Sub Committee I
01 Institute of Policy Studies 13.09.2010
02 Local Loans & Development Fund 14.09.2010
03 Superior Court Complex Management Board 16.09.2010
04 SL Export Development Board 16.09.2010
05 SL Convention Bureau 16.09.2010
06 Securities & Exchange Commission 17.09.2010
07 Tower Hall Theater Foundation 17.09.2010
08 SL Institute of Local Governance 17.09.2010
09 Accounting & Auditing Standards Monitoring Board 21.09.2010
10 Udarata Development Authority 08.12.2010
11 SL Tourism Promotion Bureau 08.12.2010
12 Insurance Board of SL 09.12.2010
13 Industrial Development Board 09.12.2010
14 National Enterprise Development Authority 28.06.2011
15 Rubber Research Board 28.06.2011
16 Resettlement Authority 28.06.2011
17 Rehabilitation of Persons, Properties & Industries
Authority
28.06.2011
18 Condominium Management Authority 15.08.2011
19 National Dangerous Drugs Control Board 15.08.2011
PARLIAMENTARY SERIES NO. 119
______________________________________________________________________________
21
Institutions Examined by the Sub Committee I
(Contd…)
20 Ranaviru Seva Authority 15.08.2011
21 SL Inventor’s Commission 15.08.2011
22 Janatha fertilizer Enterprise ltd 16.08.2011
23 Lakdiva Engineering Co. Pvt ltd 16.08.2011
24 Lanka Phosphate ltd 16.08.2011
25 SL Cement Corporation 16.08.2011
26 Elkaduwa Plantations Ltd 19.09.2011
27 Kurunegala Plantations Ltd 19.09.2011
28 HDFC Bank 19.09.2011
29 Central Engineering Consultancy Bureau (CECB) 19.09.2011
30 Milk Industries of Lanka ltd (MILCO) 19.09.2011
31 SL Export Credit Insurance Corporation 14.11.2011
32 SL Social Security Board 14.11.2011
33 Swami Vipulananda Inst. of Aesthetics Studies 14.11.2011
34 Consumer Affairs Authority 14.11.2011
35 National Apprt.& Indt. Traing.Authority(NAITA) 15.11.2011
36 State Engineering Corporation of SL (SEC) 15.11.2011
37 Board of Investment (BOI) 15.11.2011
38 Central environmental Authority 15.11.2011
39 Consumer Affairs Authority 15.11.2011
No Institutions Examined by the Sub Committee II
Date of Examination
01 Botanical Garden Trust Fund 17.08.2010
02 Sri Lanka Institute of Printing 18.08.2010
03 Institute of Post Harvest Technology 19.08.2010
04 National Aquatic Res. Research & Deve. Authority 20.08.2010
05 Land Survey Council 19.08.2010
06 Colombo Commercial Fertilizer Company 23.09.2010
07 State Printing Corporation 23.09.2010
08 Tertiary & Vocational Education Commission 06.10.2010
09 Sugarcane Research Institute 06.10.2010
10 National Engineering Research & Development Centre 13.10.2010
REPORT FROM THE COMMITTEE ON PUBLIC ENTERPRISES OF THEPARLIAMENT OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA______________________________________________________________________________
22
Institutions Examined by the Sub Committee II
contd…
11 Sugathadasa National Sports Complex Authority 14.10.2010
12 SL Council for Agriculture Research Policy 03.11.2010
13 Hadabima Authority of SL 03.11.2010
14 SL Institute of Textile & Apparel 03.11.2010
15 Official Languages Commission 08.11.2010
16 Arther C. Clark Center for Modern Technology 08.11.2010
17 National disaster Management Centre 08.11.2010
18 National Council for Elders 10.1102010
19 Sri Lanka Press Council 10.11.2010
20 National Human Resources Development Council 03.12.2010
21 Textile Quota Board 23.05.2011
22 Mantai Salt ltd 23.05.2011
23 SL Freedom for Hunger Campaign Board 23.05.2011
24 Lanka Fabrics ltd 24.05.2011
25 National Secretariat for Persons with Disabilities 24.05.2011
26 National Inst. of Social Development 24.05.2011
27 Industrial Technology Institute 30.05.2011
28 SL Tourism Development Authority 31.05.2011
29 SL Inst. of Tourism Management 31.05.2011
30 Lanka Fabrics Ltd 13.09.2011
31 Paranthan Chemicals ltd 13.09.2011
32 SL Accreditation Board for Conformity Assessment 13.09.2011
33 SL Cashew Corporation 16.09.2011
34 West Coast Pvt. Ltd 16.09.2011
35 NHDA/NEMO
14.10.2011
36 State Development & Construction Corporation
14.10.2011
37 Public Utility Commission
17.10.2011
38 NLDB 17.10.2011
39 Institute of Technology 17.10.2011
PARLIAMENTARY SERIES NO. 119
______________________________________________________________________________
23
No Institutions Examined by the Sub Committee III
Date of Examination
01 Institute of Indigenous Medicine, Affiliated to the
University of Colombo
22.07.2010
02 Sri Lanaka Ayurvedic Drugs Corporation 22.07.2010
03 Sri Lanka Advanced Technical Education 10.08.2010
04 National Transport Medical Institute 11.08.2010
05 Postgraduate Institute of Archeology 11.08.2010
06 Homeopathic Medical Council 15.09.2010
07 Postgraduate Institute of Medicine 21.09.2010
08 National Science Foundation 21.09.2010
09 Provident Fund for Buddhist & Pali University of SL 21.09.2010
10 Post Graduate Institute of English 28.09.2010
11 University of Colombo School of Computing 28.09.2010
12 University of Colombo 28.09.2010
13 Universities Pension Fund & Provident Fund 28.09.2010
14 National Youth Services Council 01.10.2010
15 State Pharmaceuticals Manufacturing Corporation 01.10.2010
16 J. R. Jayawardena Centre 12.10.2010
17 Mahapola Higher Education Scholarship Trust Fund 12.10.2010
18 University of Visual Performing Arts 12.10.2010
19 Tea Research Institute 08.04.2011
20 Turusaviya Fund 08.04.2011
21 National Institute of Plantation Management
08.04.2011
22 Institute of Construction Training & Development
08.04.2011
23 National Institute of Cooperative Development
08.04.2011
24 National Institute of Language Education & Training
08.04.2011
25 Gem & Jewellery Research & Training Institute
08.04.2011
26 Central Cultural Fund
08.04.2011
27 Information & Communication Tech. Agency of SL 29.04.2011
28 SL Handicrafts Board 29.04.2011
29 Ceylon Ceramics Corporation 29.04.2011
30 Skills Development Fund 29.04.2011
31 Lady lochore Loan Fund 29.04.2011
REPORT FROM THE COMMITTEE ON PUBLIC ENTERPRISES OF THEPARLIAMENT OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA______________________________________________________________________________
24
Institutions Examined by the Sub Committee III
Contd…
32 National Insurance Trust Fund 29.04.2011
33 National Crafts Council 17.06.2011
34 North Sea Ltd 17.06.2011
35 National Design Centre 17.06.2011
36 Selacine Rupavahini Institute 17.06.2011
37 Rakna Arakshana Lanka Ltd 17.06.2011
38 Book Development Council 26.08.2011
39 Tea Small Holdings Development Authority 26.08.2011
40 Tea Shakthi Fund 26.08.2011
41 Civil Aviation Authority 26.08.2011
42 Sustainable Energy Authority 09.09.2011
43 Ceylon Fertilizer Company ltd. 09.09.2011
44 State Pharmaceuticals Manufacturing Corporation 14.09.2011
45 Sri Jayawardenapura General Hospital 14.09.2011
46 SL Standard Institute 15.09.2011
47 Marine Environment Protection Authority 15.09.2011
48 National Film Corporation 15.09.2011
49 National Child Protection Authority 15.09.2011
50 National Institute of Fisheries & Nautical Engineering
(NIFNE)
15.09.2011
51 Ceylon Fishery Harbors Corporation 15.09.2011
52 National Aquaculture Development Authority(NAQDA) 15.09.2011
53 Co-operative Wholesale Establishment (CWE)
13.10.2011
54 STC General Trading Co. ltd
13.10.2011
55 State Trading (COOP)Wholesale Establishment Co. Ltd.
18.10.2011
56 Employees Trust Fund Board
18.10.2011
57 State Pharmaceuticals Corporation
18.10.2011
58 Palmyra Development Board
20.10.2011
59 National Library & Documentation Services Board
20.10.2011
PARLIAMENTARY SERIES NO. 119
______________________________________________________________________________
Appendix B
REPORT FROM THE COMMITTEE ON PUBLIC ENTERPRISES OF THEPARLIAMENT OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA______________________________________________________________________________
25
Date/Name of
the Institute
& Ministry
Major Issues & Problems
Identified
Comments & Decisions of
the COPE
Aug. 04, 2010
National
Gem &
Jewellery
Authority
Ministry of
Environment
1. Due to the violation of the
agreement entered into between
the Ministry on behalf of the
Authority and the American
Gem Traders Association, a sum
of Rs. 7 million had been
wasted.
2. Revenue of the Authority had
been decreasing annually,
whereas the expenditure
increases rapidly.
3. A person who was recommended
to be dismissed had been
promoted disregarding the
recommendations.
4. An incentive allowance had been
paid in a situation where the
Authority incurred a significant
loss.
1. The matter should be taken
up at the Management
Committee Meeting and a
report should be submitted
to the Committee on the
action taken.
2. The factors which had led to
this situation should be
identified, and the
corporate Plan should be
prepared accordingly to
overcome the issue.
3. A detailed report should be
submitted within one
month.
4. The action doesn’t comply
with the Treasury
Circulars.
Aug. 05, 2010
State
Mortgage &
Investment
Bank
Ministry of
Finance &
Planning
1. A Large amount of loans
remained unsettled and a
significant number of loans had
been defaulted after the payment
of one or two installments.
2. The profit, which had been Rs.
312 million in the year 2005,
had dropped to Rs. 21 million
by 2008.
3. Rs. 586,000 had been spent for
the maintenance of Koggala
Beach Park and a home
gardening development.
4. 25 audit queries had not been
replied.
1. The CAO/AO was directed
to submit a report within
two months categorizing
all the loans indicating
follow up action taken.
3. Money had been spent in
contrary to the objectives
of the Bank.
4. The CAO/AO was directed
to send replies within two
months.
PARLIAMENTARY SERIES NO. 119
______________________________________________________________________________
26
Date/Name of
the Institute
& Ministry
Major Issues & Problems
Identified
Comments & Decisions of
the COPE
Aug. 17, 2010
University
Grants
Commission
Ministry of
Higher
Education
1. Rs. 106 million had been paid to
the officers as language
proficiency allowance.
2. The academic allowance had
been considered in the
computation of salaries,
contributions to the EPF, ETF
and gratuity.
1. Action taken in contrary to
the Public Enterprises
Circulars and directed to
send explanation to the
Committee on this matter.
2. The procedure doesn’t
comply with the circulars
issued by the
Commissioner General of
Labour and directed to
submit a report to the
Committee.
Aug. 18, 2010
Ceylon
Fisheries
Corporation
Ministry of
Fisheries &
Aquatic
Resources
1. It has been decided to terminate
the joint venture entered into
with Union Fish Products
Company Ltd. but legal issues
have arisen over the matter.
2. The miscellaneous debtor
balance as at 31.12.2009 was
Rs. 43 million.
3. Action had not been taken to
recover assets amounting to Rs.
50,099,843 transferred to
Ceylon Fishery Harbours
Corporation.
1. A detailed report on this
joint venture was called in
within one month
2. Recovery of debts is at an
unsatisfactory level.
3. A detailed report was called
in within three months.
Aug. 19, 2010
Sri Lanka
Rupavahini
Corporation
Ministry of
Mass Media
&
Information
Contd...
1. The Post of CEO had been
created irrespective of the fact
that there is no provision for
such a post under the
Rupavahini Act.
2. Action had not been taken to
recover Rs. 42,649,586
receivable from various
political parties for the use of air
time during election campaigns ,
although directions had been
issued during the last COPE
meeting.
1. It was directed to delegate
the duties between the post
of Director General and
CEO, avoiding any
possible conflict.
2. Political parties had
deliberately delayed the
payments and a report
including the names of
those political parties, and
the amounts due and action
taken against them, was
called in within two
months.
REPORT FROM THE COMMITTEE ON PUBLIC ENTERPRISES OF THEPARLIAMENT OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA______________________________________________________________________________
27
Date/Name of
the Institute
& Ministry
Major Issues & Problems
Identified
Comments & Decisions of
the COPE
Sri Lanka
Rupavahini
Corporation
3. Despite the direction
given at the last COPE meeting
to recover Rs. 10,000,000 from
Mihin Lanka, no action had been
taken as at 27th
July, 2010.
4. An amount of Rs. 2,508,624
which includes the advances
paid to the officers had been
written off as most of them are
no longer in the service.
5. The net profit which had been
137 million in 2006 had
decreased up to 4.7 million by
2009.
3. One month was given to
take necessary action and
report to the Committee.
4. A methodology should be
established to recover all
the dues from the officers
prior to their retirement or
being terminated.
5. A large sum of money is
spent on salaries and bonus
to the staff with excess
cadre and directed to
introduce a retirement
scheme to bring down the
expenditure.
Aug. 20, 2010
Sri Lanka
Samurdhi
Authority
Ministry of
Economic
Development
Contd…
1. Some of the directions
given at the previous COPE
meeting had been partly
completed and some had not
been carried out at all.
Partly completed directions
(i) Incorporation of the Samurdhi
Banks.
Relevant amendments to the
Samurdhi Act have not been
completed.
(ii) The Authority had failed to
explain how the granting of
loans to
the beneficiaries helps the
national economy at large.
2. The following projects remain
uncompleted and some of them
had been handed over to the
other institutes.
(1) Tissue Culture Project –
Nillamba
(2) Rice Procession Centre –
Kebithigollawa
1. CAO/AO agreed to submit
a detailed report when the
Committee requests.
2. A detailed report was called
in regarding all these
projects.
PARLIAMENTARY SERIES NO. 119
______________________________________________________________________________
28
Date/Name of
the Institute
& Ministry
Major Issues & Problems
Identified
Comments & Decisions of
the COPE
Sri Lanka
Samurdhi
Authority
(3) Metal Crushing Project
Dimbulagala/Ameemara
(4) Coir Dust Basket Project –
Hettipola
(5) Fruit Export Project
3. In comparison with the figures in
2008, the expenditure of the
Authority on Rural
Development projects had
increased from 83 M. to 1611
M., while that of social
development projects had
increased by two fold.
4. A computer network system is
not available to the Samurdhi
Banks.
3. A detailed report was
sought stating a list of all
projects under each
category, the number of
completed projects and
incompleted projects of it.
4. CAO/AO was directed to
take prompt action to
implement the computer
network system for
Samurdhi Banks.
Sept. 07, 2010
University of
Sri
Jayewardene
-pura
Ministry of
Higher
Education
Contd…
1. 2008 and 2009 Annual Reports
had not been tabled in
Parliament.
2. For the years 2009 & 2010 each,
only two Audit & Management
Committee meetings had been
held.
3. Attention has not been given as
directed in the previous COPE
meeting regarding supervision
and reviewing the progress on
the targets of the Corporate Plan
and 2006/2010 Corporate plan
had not been updated.
4. A sum of Rs.3,010,188 had been
spent on initial plans of a waste
water refining centre without
getting the ownership of the
land verified.
1. CAO/AO was directed to
take action to present the
reports without further
delay.
2. At least one meeting in
every three months should
have been held.
3. It was directed to submit a
progress report on
formulation of the
Corporate plan within one
month time.
4. The CAO was advised to
resolve the problem,
having appointed a
committee.
REPORT FROM THE COMMITTEE ON PUBLIC ENTERPRISES OF THEPARLIAMENT OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA______________________________________________________________________________
29
Date/Name of
the Institute
& Ministry
Major Issues & Problems
Identified
Comments & Decisions of
the COPE
University of
Sri
Jayewardene
-pura
5. A fund named as “ Vice
Chancellors Fund” was being
maintained despite the fact that
no provision for such a fund was
given by the University Act.
6. Since the follow up actions had
not been taken in time, the
university had experienced a
loss of Rs. 9.83 million which
could have been recovered from
the consultancy firm due to the
collapse of the roof of the
library building.
7. There was Rs.69 million to be
recovered from the lecturers
those who had breached
agreements.
8. Although a land in
Borelesgamuwa was purchased
to provide accommodation for
students, construction work had
been stopped due to drainage
problems.
5. There is no accountability
of this fund and it was
directed to take action to
legalize the Fund.
6. A detailed report was called
in including the names of
the officials responsible for
this incident.
7. It was directed to prepare
agreements in the future
including provisions to
settle the due amounts
from EPF in case of breach
of agreements.
8. No feasibility study had
been carried out before the
purchase of the land.
Sept. 09, 2010
University of
Moratuwa
Ministry of
Higher
Education
1. An amount of Rs. 17,789,658
was to be recovered from 28
lecturers those who had breached
agreements and bonds.
1.(i) The CAO was directed to
scrutinize the
possibilities to amend
the Act to avoid such
instances.
(ii) Chairman, UGC was
directed to submit a list
of names of such
lecturers and officers in
all universities.
2. The Committee kept on
record that compared to
the other universities;
performance of University
of Moratuwa was
satisfactory.
PARLIAMENTARY SERIES NO. 119
______________________________________________________________________________
30
Date/Name of
the Institute
& Ministry
Major Issues & Problems
Identified
Comments & Decisions of
the COPE
Sept. 23, 2010
National
Institute of
Business
Management
Ministry of
Youth
Affairs
1. Annual reports for the years 2008
& 2009 had not been tabled in
Parliament to date.
2. Audit & Management Committee
meetings had not been held
regularly.
3. An income of Rs. 1,126,099 had
been lost due to the withdrawal
of fixed deposits one week
before the maturity to make
payments to the contractors.
4. A sum of Rs. 301,976 had been
written off from the dues to be
recovered from the lecturers of
the Institute due to the inability
to recover them.
5. A sum of Rs. 3.9 million had
been paid as salaries for the
employees without obtaining the
approval of the salaries & Cadre
Commission.
1. The CAO/AO stated that
the reports had been sent to
the Ministry for approval.
2. Need to hold meetings at
least one in every three
months was emphasized.
3. Strong dissatisfaction was
extended. An alternative
method should have been
found to pay the
contractors.
4. The CAO/AO was directed
to enter into an agreement
with the lecturers before
them leave the country to
avoid this type of losses in
the future.
5. Since these kinds of actions
lead to various malpractices
and issues, it was
recommended to get the
approval of the Salaries and
Cadre Commission before
making such appointments.
Sept. 24, 2010
Coconut
Cultivation
Board
Ministry of
Plantation
Industries
Contd...
1. The Corporate Plan had been
prepared just to be submitted to
the Committee before the
examination.
2. The existence of the Coconut
cultivation Board, Coconut
Research Institute, and
Coconut Development Board as
three different bodies which
carryout functions of
overlapping nature hinders the
progress of the sector.
1. The CAO/AO was directed
to prepare the Action Plan
according to the Corporate
Plan 2010 – 2014, and to
submit the same to the
Committee after getting the
approval of the Board of
Directors.
2. The CAO was directed to
see whether these three
Institutes could be
amalgamated into one
entity, and to submit a
report to the Committee
within two months.
REPORT FROM THE COMMITTEE ON PUBLIC ENTERPRISES OF THEPARLIAMENT OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA______________________________________________________________________________
31
Date/Name of
the Institute
& Ministry
Major Issues & Problems
Identified
Comments & Decisions of
the COPE
Coconut
Cultivation
Board
3. Livestock project implemented in
coconut gardens had been
unsuccessful.
4. A loss of Rs. 1.7 million had
been experienced from the egg
production unit of the model
coconut garden in Mahayaya.
5. 195 vacancies remain unfilled as
at 24.09.2010.
6. Although 3,44,000 infected
coconut trees had been identified,
the pace at which the
precautionary action being taken
to prevent the spread of the
disease is not in a satisfactory
level.
3. A report was called in
within three months time
having taken action to
expand livestock project.
4. The CAO stated that the
Board had taken action
against the person who had
involved in the
misappropriation of funds.
5. The CAO/AO was directed
to see whether the filling
of these vacancies is
necessary if the
amalgamation of the
Institutions takes place.
6. A detailed report was called
in within three months.
Oct. 06, 2010
Agricultural
& Agrarian
Insurance
Board
Ministry of
Finance &
Planning
Contd...
1. No annual Report had been
presented to the Parliament after
2005.
2. As directed in the previous
COPE meeting, 3.5 million out
of Rs. 5 million which had been
released to Agrarian Fair, had
not been recovered.
3. In the previous COPE meeting, a
massive fraud with regard to the
payments of compensation for
the farmers victimized by the
closure of Mavil Aru sluice gate
had been identified and had
directed to present a report to the
committee on the matter.
1. CAO/AO was directed to
present all the outstanding
reports without further
delay.
2. CAO/AO was directed to
get the issue solved with
the Ministry of
Agriculture.
3. CAO/AO was directed to
submit a report on the
present position of this
issue within two weeks.
PARLIAMENTARY SERIES NO. 119
______________________________________________________________________________
32
Date/Name of
the Institute
& Ministry
Major Issues & Problems
Identified
Comments & Decisions of
the COPE
Agricultural
& Agrarian
Insurance
Board
4. The Corporate Plan for 2009 –
2012 had not been updated
whereas the Action Plan had
been prepared without being
based on the Corporate Plan.
5. An amount of Rs. 1,908,815
which was paid to 04 employees
who had been released to other
institutions had not been
reimbursed.
4. The CAO/AO was directed
to take action to rectify
these shortcomings.
5. The CAO/AO was directed
to attend to the matter and
take necessary actions.
Oct. 07, 2010
Open
University of
Sri Lanka
Ministry of
Higher
Education
1. The amount to be recovered from
the lecturers who had breached
agreements is Rs. 40,671,948.
2. Re-valuation of assets had been
carried out in a poor manner.
3. Three regional centers had been
constructed spending Rs.
18,716,902 without getting the
ownership of the lands verified.
4. The printing activities of the
university are performed at an
unsatisfactory level and an
excessive cost incurred due to
the fact that the printing had
been done outside, while some
printing machines had been
idling for years.
5. Rs. 6.6 million had been paid
as proficiency language
allowance contrary to thePublic
Enterprises Circulars.
1. The CAO/AO stated that
the action was being taken
to recover this amount.
2. The CAO/AO agreed to
rectify all the shortcomings
taken place at the re-
valuation.
3. The CAO agreed to get the
clearance early.
4. The CAO/AO was directed
to submit a detailed report
on this within one month
time.
5. The CAO stated that the
newly recruited officers are
not paid so.
Oct. 08, 2010
Buddhist &
Pali
University
Ministry of
Higher
Education
Contd...
1. Corporate Plan had not been
prepared according to the
treasury circulars.
1. The CAO was directed to
assist the University when
the Corporate Plan is
prepared.
REPORT FROM THE COMMITTEE ON PUBLIC ENTERPRISES OF THEPARLIAMENT OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA______________________________________________________________________________
33
Date/Name of
the Institute
& Ministry
Major Issues & Problems
Identified
Comments & Decisions of
the COPE
Buddhist &
Pali
University
2. The University has encountered a
problem of increasing the
number of students as each
locally enrolled student should
be given hostel facility.
3. Due to the legal matters arisen
between the University and
several employees, for which
several cases are pending before
the court, the University had
spent nearly Rs. 2 million so far
as payments for lawyers.
4. An excess amount of Rs. 632,342
had been paid as O.T. to the staff
by giving more O.T. hours,
contrary to the Public Enterprises
Circular.
2. The land with the extent of
5 acres provided by the
government had not been
used effectively.
3. Continuation of this
situation may affect the
students, Institute and also
to the officers involved
irrespective of the fact that
these charges are false or
not, and therefore, the
CAO was directed to see
the possibilities of settling
these issues immediately
and send a report to the
Committee accordingly.
4. The CAO/AO agreed to
formulate a method to
rectify the issue.
Oct. 19, 2010
Hector
Kobbekaduw
a Agrarian
Research &
Training
Institute
Ministry of
Agriculture
Contd...
1. The Corporate Plan for 2009 –
2013 had been prepared
contrary to the Public
Enterprises Circular.
2. Audit & Management Committee
for the year 2010 had met only
twice.
3. A significant delay ranging from
01 to 03 years was observed in
completing researches.
4. Action had not been taken to
recover Rs.11.46 million from
06 scholarship debtors.
5. An aid amounting to US$ 65000
received for research work had
been used for printing books.
1. The CAO/AO was directed
to re-prepare the Corporate
Plan and also to update it
on rolling plan basis.
2. It was directed to meet at
least once in every three
months time.
3. The CAO agreed to take
action to avoid such delays
in the future.
4. A detailed report regarding
these outstanding amounts
was called in within one
month.
5. Money granted had not
been used for the intended
purpose.
PARLIAMENTARY SERIES NO. 119
______________________________________________________________________________
34
Date/Name of
the Institute
& Ministry
Major Issues & Problems
Identified
Comments & Decisions of
the COPE
Hector
Kobbekaduw
a Agrarian
Research &
Training
Institute
6. The carder of the institute had
not been approved by the Dpt. of
Management Services and 23
employees had been recruited
contrary to the scheme of
recruitment.
6. It was directed to inform
the committee, the treasury
and the Auditor General
after receiving the
necessary approval.
Oct. 20, 2010
Ceylon
Shipping
Corporation
Ministry of
Ports &
Aviation
1. An updated Corporate Plan is not
available.
2. The investments valued at Rs.
47,937,900 cannot be verified
due to the unavailability of share
certificates.
3. A refundable advance of Rs.50
million obtained from the
Shipping Development Fund
administered by the SLPA in
1997 had not been settled.
1. CAO agreed to submit an
updated Corporate Plan to
the relevant authorities.
2. The CAO stated that they
had received Scrip
dividends also but the share
certificates had been
misplaced. It was directed
to take actions to get it
back.
3. It was directed to take
action to settle the
outstanding balances
without allowing them to
be displayed in final
accounts.
Oct. 21, 2010
Cey- Nor
Foundation
Ltd.
Ministry of
Fisheries &
Aquatic
Resources
Development
Contd...
1. The net assets worth of Rs.
12,752,650 of Fish Net Factory
at Gurunagar had been taken
over by the North Sea Ltd., but
no income had been received by
the Govt.
2. An outstanding withholding tax
amounting to Rs. 2.6 million is
being carried forward from the
year 2001, as the action cannot
be taken due to the
unavailability of documents.
3. No action had been taken against
the person who evaded the
payment of balance of Rs.
393,865 of a fishing boat worth
of Rs. 2 million.
1. The CAO was directed to
take the assets back.
2. It was directed to take
necessary approval to write
off this balance.
3. The CAO stated that legal
action would be taken.
REPORT FROM THE COMMITTEE ON PUBLIC ENTERPRISES OF THEPARLIAMENT OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA______________________________________________________________________________
35
Date/Name of
the Institute
& Ministry
Major Issues & Problems
Identified
Comments & Decisions of
the COPE
Cey- Nor
Foundation
Ltd.
4. Reports and documents regarding
accounting matters had not been
given to the A.G.’s Dept.
4. The Committee directed to
submit all the relevant
reports to the Auditor-
General’s Dept.
Nov. 09, 2010
Lanka
Sathosa Ltd.
Ministry of
Co-
operatives &
Internal
Trade
1. 12 buildings had been obtained
on rent from CWE without
reaching any agreement in
respect of rent and Rs. 106.5
million was payable to the CWE
in respect of the assets and
services supplied.
2. The Company had spent 36
million for the purchase of
polypropylene bags.
3. A proper reconciliation had not
been carried out with the daily
sales returns obtained from
shops and the registers of
monthly sales.
1. The CAO was directed to
take remedial action to
settle these transactions.
2. The Committee directed to
introduce alternative
methods to cut down the
expenditure.
3. The CAO agreed to correct
the accounts.
Nov. 30, 2010
Sri Lanka
Telecom
Ministry of
Telecommuni
cation &
Information
Technology
1. Underpayment of
telecommunication levy for the
period from March 2003 to
December 2009 amounted to Rs.
6,074,368,463.
2. The Dept. of Inland Revenue
had charged a tax of Rs. 643
million for the years 1993/1994
and 1994/1995.
1. A detailed report analyzing
the amount of levy paid in
each year was called in.
December 01,
2010
Sri Lankan
Airlines
Ministry of
Ports &
Aviation
Contd..
1. A loss of Rs. 9.3 billion had been
reported for the financial year
2008/2009.
1. As a whole, it was
informed that loss had
been reported due to
escalation of fuel
prices & global
economic crisis and
loss had been brought
down to the break even
in the current year.
PARLIAMENTARY SERIES NO. 119
______________________________________________________________________________
36
Date/Name of
the Institute
& Ministry
Major Issues & Problems
Identified
Comments & Decisions of
the COPE
Sri Lankan
Airlines
2. A net loss of Rs. 352.89 million
had been experienced under the
Fuel Risk Management
Programme.
2. Company benefited by
the programme
however the particular
loss resulted during the
last 4 months
December 02,
2010
Sir John
Kotalawala
Defence
University
Ministry of
Defence
1. Tabling of Annual Reports in
Parliament had not been done.
2. An Action Plan for the Corporate
Plan of 2010 had not been
prepared.
3. The approval had not been
obtained for the deposit of Rs.
5,000,000 made in the State
Mortgage & Investment Bank
for the implementation of a loan
scheme to the staff of the
University.
4. A significant decrease is
observed in relation to the
student intake and no graduate
passing out each year.
1. The CAO/AO agreed to
present all the outstanding
reports including 2009 as
early as possible.
2. The CAO/AO was directed
to follow the guidelines
given in the Public
Enterprises Circular No.
12, when preparing the
Action Plan.
3. The CAO/AO agreed to
take action to obtain the
covering approval of the
Hon. Minister of Finance.
4. Having observed that the
figures submitted by the
University were
contradictory, it was
directed to submit a report
with correct figures.
December 03,
2010
Sri Lanka
Savings Bank
Ministry of
Finance &
Planning
1. Action had not been taken to
review the Corporate Plan and
the Action Plan by the Board of
Directors.
2. A sum of Rs.78.4 million
deposited in the Habib Bank by
the then Pramuka Savings Bank
had not been settled by the
successor of the Habib Bank, ie
Hatton National Bank Ltd and
the verdict issued by the court
over the matter, is not favourable
to the Sri Lanka Savings Bank.
1. It was directed to review the
Corporate Plan annually
and also to prepare the
Action Plan based on the
Corporate Plan.
2. The case is pending before
the Supreme Court.
REPORT FROM THE COMMITTEE ON PUBLIC ENTERPRISES OF THEPARLIAMENT OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA______________________________________________________________________________
37
Date/Name of
the Institute
& Ministry
Major Issues & Problems
Identified
Comments & Decisions of
the COPE
December 07,
2010
Mihin Lanka
(Pvt.) Ltd.
Ministry of
Civil
Aviation
1. The Company is running at a
significant loss as follows;
2007/2008 – Rs. 3,356 million
2008/2009 – Rs. 4,657 million
2009/2010 – Rs. 5,722 million
2. The current liability of the
Company had been Rs. 2.4
billion.
3. The figures furnished by the
Company are different from
those provided by the A.G.’s
Dept. and evidence submitted is
insufficient.
4. The interest had not been paid in
relation to the loans obtained
from Airport Aviation Services
(Pvt.) Ltd. for Rs. 500,000,000.
5. The Company had obtained a
bank overdraft amounting to Rs.
381.7 million.
1. The CAO stated that the
company had made a 16
million operational profit
for the last 6 months which
can be viewed as a positive
sign of turn back.
3. It was directed to submit the
following information
within one month.
1) The Capital Input
2) Loss & Profit of the Mihin
Lanka
3) No. of Passengers carried
4. The CAO mentioned that
the loan would be settled
by the Treasury.
5. The CAO stated that the
bank overdraft has been paid
off with the interest.
December 08,
2010
Hingurana
Sugar
Industries
Ltd.
Ministry of
State
Resources &
Enterprise
Development
1. Action is being taken to wind up
the Institute.
The management and the assets
had been handed over to the Gal
oya Plantations Ltd. by the
Treasury but still, 277.7 hectares
of land remains under the
possession of the Hingurana
Sugar Industries Ltd.
PARLIAMENTARY SERIES NO. 119
______________________________________________________________________________
38
Date/Name of
the Institute
& Ministry
Major Issues & Problems
Identified
Comments & Decisions of
the COPE
December 09,
2010
Sri Lanka
Rubber
Manufacturi
ng & Export
Corporation
Ministry of
State
Resources &
Enterprise
Development
1. The private auditors had stopped
its functions in the Corporation
due to non payment of Rs. 3.1
lakhs owed to them, and more
over, they had held some
documents in their possession.
2. The Corporation owes Rs. 115
million to the People’s Bank and
Rs. 1385 million to the General
Treasury.
3. Various malpractices had taken
place during the time of the
previous management.
4. The present management is
unaware of the closure of
Matugama Rubber Factory and
certain malpractices and
misappropriation of funds in the
Corporation.
1. The CAO stated that the
action would be taken to
settle the dues to get the
service of the auditors
again.
3. The Committee directed to
submit a detailed report
including the names of the
previous Board Members,
the way the Corporation was
led to a loss incurring
situation, and the persons
responsible for that and legal
action taking place regarding
the Corporation.
4. A full report was called in
within a month’s time.
January 04 ,
2011
Rajarata
University of
Sri Lanka
Ministry of
Higher
Education
Contd..
1. Annual report for the year 2009
had not been tabled in
Parliament.
2. A rent of Rs.9,979,000 had been
paid in respect of 57 houses used
as student hostels without
obtaining a proper valuation.
3. A loan balance of Rs. 670,942/-
remains outstanding for a period
of 01 to 03 years which is due
from 58 employees who had
retired, vacated and transferred
from their posts.
1. It was directed to table the
annual report within two
weeks.
2. It was directed to get a
report from the Dept. of
Valuation prior to the
payments of this kind in the
future.
3. This amount remains un-
recovered due to clear
inefficiency of the
management.
REPORT FROM THE COMMITTEE ON PUBLIC ENTERPRISES OF THEPARLIAMENT OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA______________________________________________________________________________
39
Date/Name of
the Institute
& Ministry
Major Issues & Problems
Identified
Comments & Decisions of
the COPE
Rajarata
University of
Sri Lanka
4. Action had not been taken to
recover security bonds
amounting to Rs.2,593,185 due
to breach of agreements by the
lecturers those who had not
returned after completion of
studies abroad.
5. Action had not been taken as per
the agreement, to get the
ownership of the assets worth of
Rs. 41 million belonging to the
IRQUE project.
4. It was directed to take all
possible action to recover
these amounts.
5. It was directed to disclose
the assets when preparing
the accounts.
January 05,
2011
Paddy
Marketing
Board
Ministry of Co-operatives & Internal
Trade
1. No record was available with
regard to certain leased out stores
and a lease rent totaling
Rs.24,957,044/- remains
receivable as at 31.12.2010.
2. An amount of Rs.533,044,709/-
remains unrecovered and the total
outstanding payable to various
creditors as at 31.12.2009 is
Rs.2,138,777,007/-
3. The Board had no adequate
facilities to store the bumper
harvest of paddy expected in the
coming season.
1. An interim report, including
a list of stores that had
already been rented out and
the number of stores that
had been functioning at
present, was called in.
2. It was directed to submit an
interim report stating the
amount payable and
receivable in relation to
government institutions.
3. The CAO/AO was
instructed to take necessary
steps to face the situation.
January 20,
2011
Independent
Television
Network and
Lakhanda
Radio
Ministry of
Mass Media
and
Information
1. Annual report for the year 2009
had not been tabled.
2. The radio channel had incurred a
significant loss, not shown in the
accounts
1. It was directed to take
action to table it as early as
possible.
2. Due to the amalgamation of
accounts of the radio
channel and the TV channel,
the loss of the radio channel
has not been highlighted.
PARLIAMENTARY SERIES NO. 119
______________________________________________________________________________
40
Date/Name of
the Institute
& Ministry
Major Issues & Problems
Identified
Comments & Decisions of
the COPE
February 8 ,
2011
Janatha
Estates
Development
Board
Ministry of
States
Resources and
Enterprise
Development
1. No Annual report has been tabled
after the year 2006.
2. The institution had been running
at a loss for the past few years.
out of 17 estates 10 are running
at a loss
1. It was directed to submit
the rest of the reports within
next three months.
2. It was directed to submit a
report within one month,
stating the estates that
should be kept under the
institute and also the action
that should be taken with
respect to the estates
running at a loss.
February 10,
2011
Kahatagaha
Graphite
Lanka Ltd.
Ministry of
Industries
and
Commerce
1. Eighteen Annual reports had not
been tabled in Parliament for the
period from 1992/1993 to
2009/2010 and the accounts for
18 years had not been submitted
for audit.
2. The favorable condition that was
prevailing at the time the
Government took over the
management had deteriorated by
now.
3. Loan amounting to Rs. 54
million, obtained by the earlier
management had to be taken over
by the present Management,
another Rs. 16 million to be
settled.
1. No information available
and the present Management
makes an attempt to update the
accounts.
2. The Company should find
the possibilities of
introducing promotional
programmes and also to
initiate a joint venture with
foreign entrepreneurs
dealing with advanced
technology.
February 23,
2011
National
Paper
Company
Ltd.
Ministry of
State
Resources &
Enterprise
Development
1. The Company is continuing with
loss and it has been decided to
lease out the Embilipitya factory
to an external party for 30 years.
1. It was directed to submit a
report stating the action that
can be taken to improve the
Embilipitiya and
Valchchenai factories.
REPORT FROM THE COMMITTEE ON PUBLIC ENTERPRISES OF THEPARLIAMENT OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA______________________________________________________________________________
41
Date/Name of
the Institute
& Ministry
Major Issues & Problems
Identified
Comments & Decisions of
the COPE
February 24 ,
2011
B.C.C.Lanka
Ltd.
Ministry of
State
Resources
1. The Committee noted that the
Company had a liability of
Rs.487 millions to the Treasury
and Rs.100 millions to the Bank
of Ceylon.
2. A land of 212 perches belonging
to the BCC had been sold to a
private party for Rs.87 millions
and presently the land had been
left out without being used for
any valid purpose.
1. The Committee was
informed that the Company
has taken steps to settle the
dues by selling their
properties to the UDA.
2. The Committee directed the
CAO/AO to submit a
detailed report on all the
lands of that nature sold by
BCC, indicating the parties
to whom such lands had
been sold.
March 08,
2011
Lanka
Salusala Ltd.
Ministry of
State
Resources
1. For the year 2009/2010, there
had been a loss of Rs,30
millions.
1. It was informed that the loss
was due to the salaries paid
to the staff who had been
sent on compulsory leave
during the restructuring
process
March 09,
2011
Sri Lanka
Broadcasting
Corporation
Ministry of
and Mass
Media
Information
Contd...
1. Only two Audit & Management
Committee meetings had been
held for the year 2010.
2. There had been an excess staff of
329 in the SLBC Cadre.
3. It has not been able to recover
the accumulated sum of Rs. 97.3
million ,the outstanding
receivable amount up to the year
2006 which had reduced only
upto Rs. 51 million by 2010.
1. It was directed to hold the
prescribed number of
meetings in the future.
2. The Committee was
informed that it had been
decided to transfer the
excessive staff to the other
channels of the SLBC as
they had been in service for
the last 10 to 12 years.
3. It was directed to take
proper approval from the
Treasury to write off the
unrecoverable out standings.
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Date/Name of
the Institute
& Ministry
Major Issues & Problems
Identified
Comments & Decisions of
the COPE
Sri Lanka
Broadcasting
Corporation
4. The following weaknesses were
observed.
i. High administration cost
ii. Excess staff
iii. Lack of research and new
developments
iv. Less differentiation in the aired
programmes
v. No proper costing and pricing
system
vi. Non adherence to Laws and
regulations
5. The loss of Rs.727 million
incurred in 2009 had been
adjusted and displayed as a profit
of Rs.47 million in 2010 financial
statements by adjusting with the
Government grant.
4. It was directed to submit a
report indicating the action
that could be taken to
overcome this situation.
5. Having expressed its
dissatisfaction, the Auditor
General was directed to look
into the matter.
March 22 ,
2011
National
Science &
Technology
Commission
Ministry of
Technology
& Research
1. Annual reports after the year
2007 had not been tabled in
Parliament.
2. Since 1999, only one institution
had been reviewed in addition to
the two institutions which were
being reviewed.
1. It was agreed to table the
outstanding reports by April,
2011.
2. As per the Act, it is required
to review four institutions
per annum and directed to
submit a report within two
months, indicating the
methodology as to how the
Commission could
streamline the Institutions
which carry out the
functions of overlapping
nature.
March 23 ,
2011
Chillaw
Plantations
Ltd.
Ministry of
Coconut
Development
& Janatha
Estate
Development
1. Due to an arbitration process, it
had been difficult to take over the
management of the company
which had been handed over to
the Wayamba Plantations Ltd
despite the continuous efforts
made from 1994. Nevertheless, in
2002, the lease agreement had
been again extended for 15 years
and as a result, Rs. 124 million
1. It was directed to submit a
report with regard to the
profits made from the year
1992 together with the
Management agreement
with the Wayamba
Plantations Ltd.
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Date/Name of
the Institute
& Ministry
Major Issues & Problems
Identified
Comments & Decisions of
the COPE
Chillaw
Plantations
Ltd.
had been paid as compensation at
early termination of the
agreement.
2. The administration cost of
Chillaw Plantations had gone up
by 94% in 2010.
2. It was directed to submit a
report on the administration
cost with a break down.
April 5 ,
2011
Coconut
Research
Board
Ministry of
Coconut
Development
& Janatha
Estate
Development
1. No Annual report has been tabled
after the year 2007.
2. A loss of Rs. 581,200 had been
incurred due to the sale of
62,400 coconuts to a private
institution.
3. The board had spent Rs. 18.73
million since 2006 for research
purposes to control the Coconut
Wilt Disease in addition to the
removal of the affected coconut
trees from the field at a cost of
Rs. 30.65 million.
4. The Committee considered that
the Coconut Cultivation Board ,
The Coconut Research Institute
and the Coconut Development
Authority are three entities with
overlapping functions.
1. It was directed to table the
outstanding reports as early
as possible.
2. This situation had arisen
since the board had not
adhered to the accepted
procedure.
3. No permanent solution had
been found even after
spending a large sum of
money.
4. It is recommended to
amalgamate these three
institutes if they are
functioning with
overlapping objectives.
April 6 ,
2011
Uva Wellassa
University
Ministry of
Higher
Education
Contd..
1. A vehicle had been hired by the
University without considering
the lowest quotation.
2. The positions of the bursar and
the registrar had been on acting
basis for a considerable period.
1. It was informed that the first
and the second quotations
had been withdrawn by the
owners and therefore, the
tender had been offered to
the third lowest quotation as
there was no other
alternative.
2. The Committee was
informed that it had been
difficult to recruit new
personnel for the existing
salary scales.
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Date/Name of
the Institute
& Ministry
Major Issues & Problems
Identified
Comments & Decisions of
the COPE
Uva Wellassa
University
3. Percentage of employments
received by the students
completed the first 05 degree
programmes as follows.
• Bachelor of Animal
Science-96%
• BSc in Computer Science &
Techg.-84%
• BBM in Enterp. & Mgt.-
77%
• B. Tech in Science &
Techg-71%
• BSc in export Agri.-63%
3. The Committee expressed
its pleasure on this
achievement
April 7 ,
2011
Kalubovitiya
na Tea
Factory Ltd.
Ministry of
Plantation
Industies
1. The Corporate plan , Action plan
, Annual Budget, quarterly
reports had not been submitted
to the treasury , Auditor General
or the Parliament.
2. The annual tea production shows
a declining trend for the period
from 2005 to 2009, although the
price of tea had increased over
the period.
3. It was observed that there is a
difference of Rs. 4,269,344
between the audited account
balances and the ledger balances
and further, a difference of Rs.
19,423,126 between the Head
office account balance and the
relevant factory account
balances. There was a difference
of Rs. 15,527,107 between 14
ledger account balances and the
relevant balances appearing in
the Trial balance.
4. A sum of Rs.22,465,416 which
should have been refunded to Sri
Lanka Tea Board had not been
returned.
1. It was directed to submit
such reports without further
delay.
The Committee expressed
its dissatisfaction on this.
2. It was directed to submit a
report on this matter within
three months time to the
Department of Public
Enterprises to monitor the
situation closely.
3. This shows the poor level of
recording entries in ledgers.
4. It was directed to send a
report after solving the
problem.
REPORT FROM THE COMMITTEE ON PUBLIC ENTERPRISES OF THEPARLIAMENT OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA______________________________________________________________________________
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Date/Name of
the Institute
& Ministry
Major Issues & Problems
Identified
Comments & Decisions of
the COPE
May 03 ,
2011
University of
Jaffna
Ministry of
Higher
Education
1. Annual reports from 2007 had to
be tabled in Parliament.
2. The Waste Water Disposal
project which had initially
estimated to Rs. 9,004,500 had
been temporarily abandoned as
the Water Supply & Drainage
Board had increased the cost
upto Rs.18,188,695.
3. Action had not been taken to
recover an amount of Rs.
117,530,741 due from 133
lecturers who had breached
agreements and bonds.
4. Number of audit queries had not
been answered
1. It was directed to table them
without further delay.
2. The Vice Chancellor had
been unaware of this and
agreed to look into the
matter.
3. The Chairman of the UGC
was directed to take action
to recover these dues.
4. It was directed to answer
these queries without
further delay.
May 05 ,
2011
National
Institute of
Library &
Information
Science
Ministry of
Higher
Education
1. The Annual reports for 2008 and
2009 had not been tabled.
2. The Action plan had not been
prepared in accordance with the
Corporate plan.
1. It was agreed to table them
by 19th
May, 2011.
2. It was agreed to submit the
revised plans within two
months time.
May 06 ,
2011
Post
Graduate
Institute of
Agriculture
Ministry of
Higher
Education
Contd...
1. Rs. 1,208,989 had been paid for
overtime exceeding the limit
allocated for the year 2006.
2. There is a high rate of drop-outs
compared to the number of
enrollments of students.
1. It was directed to get the
approval of the UGC for the
excess amount.
2. The Committee was
informed that some students
give up the course after
completing the theory part
as the research part has to be
done on full time basis.
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Date/Name of
the Institute
& Ministry
Major Issues & Problems
Identified
Comments & Decisions of
the COPE
Post
Graduate
Institute of
Agriculture
3.Without following the
procurement guidelines
purchases exceeding Rs. 02
million had been made.
3. The Committee
emphasized the need of
following correct
procedures.
May 25 ,
2011
Kantale
Sugar
Industries
Ltd.
Ministry
of State
Resources &
Enterprise
Development
1. Rs. 16,606,331 had to be
recovered from, the owner of the
Company in 2003, and further,
he had sold the vehicles
belonged to the company.
2. Action had not been taken to
recover the lease payment
receivable for 7,286 acres from
the Agro Trading Lanka Private
Ltd.
3. Cabinet had decided to lease out
its’ operations under long term
lease agreement or to have
Govt/Private joint venture
business
1. The company had acted in a
lethargic manner in the
process of recovering the
dues and it was directed to
take early action to recover
the dues from the former
owner.
2. It was informed that the
company had been closed
down and the owners had
gone abroad.
3. It was revealed that, the
Govt. had already
advertised to find out a
suitable investor and prepared
guidelines to be issued to the
bidders.
May 26 ,
2011
Atomic
Energy
Authority
Ministry of
Power &
Energy
Contd...
1. The Committee observed that
62% of the debtors out of the
debtor balance, had been
Government Institutions whereas
the rest had been from the private
sector.
2. It was observed that the
Corporate Plan prepared for the
period 2010-2014 had been
incomplete.
1. It was informed that they
had been able to recover
50% of the debtors and that
the amount had been
reduced to 1 million.
2. The Committee directed the
CAO/AO to revise the
Corporate Plan including
new goals and to prepare the
Action Plan and the budget
based on the Corporate Plan.
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Date/Name of
the Institute
& Ministry
Major Issues & Problems
Identified
Comments & Decisions of
the COPE
Atomic
Energy
Authority
3. The Committee enquired about
the use of nuclear power as an
alternate energy source in the
Country.
3.The Committee was
informed that, it has been
planned to establish a
regulatory Council to look
into the entire Nuclear
Power Project.
June 07 ,
2011
South
Eastern
University of
Sri Lanka
Ministry of
Higher
Education
Contd..
1. SWOT analysis, the financial
data and the future plans had not
been included in the Corporate
Plan prepared for the period of
2006 – 2015 ( 10 years ), and
also not updated.
2. Annual Reports from the year
1998 to 2004 and also 2006 to
2010 had not been presented in
Parliament, whereas the 2005
Annual Report had been
presented in Parliament in
February 2009.
3. The Committee queried about
Audit & Management Committee
meetings.
4. The Committee enquired as to
why the vacancies in the
Academic and Non-Academic
cadre had not been filled.
1. The Committee directed the
CAO/AO to look into these
shortcomings when
preparing the Corporate
Plan.
2. The CAO/AO accepted the
delay and stated that by now
all reports upto the year
2009 had been submitted to
the Cabinet for approval,
and would take early action
to present them in
Parliament and agreed to
keep the Hon. Minister
informed of this situation in
order to get his assistance to
get this expedited.
3. University had already held
02 meetings for the year
2011, and agreed to hold the
balance as had been
prescribed before the end of
the year.
4. The CAO/AO stated that
due to the war situation at
that time, the University had
a problem of obtaining
proper resource personnel,
but by now they had called
for applications, and would
be able to recruit staff early.
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Date/Name of
the Institute
& Ministry
Major Issues & Problems
Identified
Comments & Decisions of
the COPE
South
Eastern
University of
Sri Lanka
5. The Committee queried as to
why UGC approval had not been
obtained for Honorarium
payments amounting to Rs.
248,411/-.
6. University had violated
the University Act by giving
promotions to lecturers who
had not completed
Postgraduate degree within 8
years.
5. The CAO/AO stated that
due to lack of staff, the
University had to pay those
allowances. The AO further
stated that at present they
are obtaining approval from
the UGC for such payments.
6. Directed to get advice from
the UGC to correct this
situation.
June 08,
2011
Distance
Learning
Centre Ltd
Presidential
Secretariat
1.The Committee enquired about
the Corporate Plan
2. The Committee wanted a
clarification regarding the setting
up of the Distance Learning
Centre
1. Corporate plans had been
prepared for the period2011-
2013.
2. It was informed that DLC
was established under a
World Bank Project in
2002,as per a loan
agreement, Rs.142 million
treated as a grant and the
balance Rs.32 million as a
loan payable in 10 years.
June 10,
2011
Institute of
Biochemistry
Molecular
Biology and Biotechnology
Ministry of
Higher
Education
1. Delay in presenting annual
reports in Parliament.
2. It was further observed that the
institution had been behind the
target level as far as the number
of students recruited for certain
courses were concerned.
1. Annual reports including
that for the year 2009, had
already been sent to the
Printers and action would be
taken to table them in
Parliament as early as
possible.
2. The CAO/AO explained
that non- availability of
funds, lack of additional
cadres and the setback
caused in setting up of
courses had affected the
number of students enrolled
for each course.
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Date/Name of
the Institute
& Ministry
Major Issues & Problems
Identified
Comments & Decisions of
the COPE
June 21,
2011
Eastern
University of
Sri Lanka
Ministry of
Higher
Education
Contd...
1. Corporate Plan prepared for the
period 2010-2015 had not been
updated.
2. It was observed that a barbed
wire fence had been erected
spending Rs.11,029,167 the
approval to construct a parapet
wall with an allocation of Rs.10
million and further observed that
an over payment of Rs.301,000/-
had also been made.
3. The Committee questioned as to
why action had not been taken to
inquire into the Direct Credit
Rs.5,704,648 , the Direct Debit
Rs.4,952,914, the Unrealized
Deposit Rs.1,527,243 and the un-
presented Cheques Rs.4,868,510
4. The Committee wanted a
clarification whether action had
been taken either to recover or to
write off the losses amounting to
Rs.17,860, 815.
5.The Committee observed that 28
stationary items valued at
Rs.931,890 had been lying idle
for over 3 years.
6. The Committee noted that the
University had accepted a bid to
construct a chain linked fence
which had been 83.6 % greater
than the initial estimated cost of
Rs.1,299,500 which had also
been revised to Rs.1,881,600.
1. Directed to update the
Corporate Plan and to send a
copy of the 2011 Action
Plan to the Committee and
to the Auditor General.
2. It was informed that, the
officer in charge, the Rector
had been interdicted and the
investigation was being
conducted.
3. The Committee stressed the
fact that these lapses had
occurred as the bank
reconciliation had not been
properly and timely done.
4. A detailed list of lost items
had been submitted to the
Ministry for approval to
write off from the books.
The Committee directed the
institute to obtain the
treasury approval for this
purpose.
5. The Committee directed the
CAO/AO to submit a report
regarding this matter.
6. Rector concerned had been
interdicted and the
investigations were under
way.
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Date/Name of
the Institute
& Ministry
Major Issues & Problems
Identified
Comments & Decisions of
the COPE
Eastern
University of
Sri Lanka
7. Rs. 70,407,561 had to be
recovered due to breach of
agreements by the lecturers gone
abroad on scholarships
7. Only Rs. 7 million had been
recovered. Legal action had
been taken after the lapse of
the prescribed time period.
8. Directed to see possibilities
to convert the existing
department of Hinduism to a
Faculty.
June 22 ,
2011
Institute of
Human
Resource
Advancement
Ministry of
Higher
Education
1. The Committee noted that Rs.6
million had been invested in
2009, by the institution without
the treasury approval.
2. It was observed by the
Committee that it had been
unable to make use of the two
finger printing machines since
2008 purchased at the cost of
Rs.330,155.
3.Quality assurance of the degree
programmes & courses
conducted by the Institution was
questioned.
1. Directed to get the
Treasury approval.
2. It was brought to the notice
of the Committee that these
machines were being used.
3.Directed the UGC to submit
a report indicating the
methodology to be adopted to
assure the quality of the
courses within a week.
June 23,
2011
National
Institute of
Technical
Education
Ministry of
Youth Affairs
& Skills
Development
Contd..
1. The Committee queried the
present position of the Institute.
2. The Committee queried about
the delay in presentation of
annual reports for the year 2008
and 2009.
3.The Committee observed that the
institute had not taken action to
acquire the assets amounting to
Rs.12,368,579/- purchased for
the NORAD project and also an
Infinitive Digital Solvent Printer
amounting to Rs.1.2 million had
been included externally to the
objectives.
1. It was informed that the
Institution was transformed
to University of
Technology.
2. Action would be taken to
present both the reports in
Parliament very early.
3. The Committee was
informed that action would
be taken to acquire these
assets very early.
REPORT FROM THE COMMITTEE ON PUBLIC ENTERPRISES OF THEPARLIAMENT OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA______________________________________________________________________________
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Date/Name of
the Institute
& Ministry
Major Issues & Problems
Identified
Comments & Decisions of
the COPE
National
Institute of
Technical
Education
4. The Committee enquired whether
any action had been taken to
recover Rs.1,148,772/- due from
the lecturers who had vacated
posts and also Rs.200,884 from
the officers who had not
submitted the certificates after
completion of various courses.
5. The Committee noted that a
receivable amount of Rs.4.9
million had been continuously
brought forward since 2005
without being recovered.
6. The Committee observed that
Rs.85,000/- had been spent
monthly as the rental for the
official residence of the Vice –
Chancellor, where the official
residence of the institute had
been rented out to a Ministerial
Officer for Rs.4146/-.per month
4.The Committee was
informed that on the
favourable decision given by
the courts against 02
officers, the institution had
started recovering due
amounts.
5. It was brought to the notice
of the Committee that they
had written to the Treasury
for approval to write off this
amount.
6. It was revealed that
Secretary to the Ministry
had been occupying this
residence as the Chairman
of the Board.
June 24,
2011
Post
Graduate
Institute of
Science
Ministry of
Higher
Education
1. The Committee questioned as to
why certain fixed assets written
off to the worth of
Rs.29,014,191 had been re-used
without being revalued and taken
into accounts .
2. The Committee noted that a sum
of Rs.111,716,670 had been
invested by the Institute without
obtaining the approval.
3.Number of PhDs & Master
degrees offered by the Institution
had gone up by the year 2010.
1. The Committee directed to
send a report on this matter
within 03 months time.
2. The Committee directed the
CAO/ AO to get the existing
regulations changed in order
to make the activities of
Universities a success.
3.The Committee appreciates
the situation.
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Date/Name of
the Institute
& Ministry
Major Issues & Problems
Identified
Comments & Decisions of
the COPE
July 05 ,2011
National
Centre for
Advanced
Studies in
Humanities
and Social
Sciences
Ministry of
Higher
Education
1. The Committee observed that a
sum of Rs.9,290, 674 had been
granted to 7 lecturers not related
to the field of Humanities and
Social Sciences, contrary to the
objectives of the Centre.
1. The Committee pointed out
the importance of amending
the act if necessary to cater
to the other fields as well.
July 06 ,2011
&
November
18, 2011
Sri Lanka
Cricket
Ministry of
Sports
Contd...
1. According to the Income
Statement, expenditure of the
Cricket Board had been increased
by 524% when compared to the
year 2009. Following reasons were
given. (i) Spent more money on the matches
played by the A team and under 19
team,
(ii) Having increased the National pool
up to 100 players and provided them
with necessary facilities,
(iii) Action taken to promote female
cricket pool.
2. The Committee queried whether
the National players signed
agreements with the Board.
3. It was questioned that, how the
contract for construction of
Hambantota- Suriyawewa ground
given to Sri Lanka Ports Authority.
As per the CAO/AO, SLPA has the
necessary equipment for the
construction work.
1. Following information were
called for;
(i)Expenditure on promoting
pool of cricketers from 24 – 100
(ii)How many of them had
selected to National Team
(iii)How many has signed
agreement with the Cricket
Board,
(iv)Details of 30 female
cricketers with expenditure.
2. It was informed that,
Signing has been delayed,
although the agreements had
been forwarded to the Players
Association. But however they
are of the view that cricketers
are bound to play, even if the
main agreement lapses for a
period of six months.
3. Directed to provide initial
documents prepared by the
respective Architectural
Company.
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Date/Name of
the Institute
& Ministry
Major Issues & Problems
Identified
Comments & Decisions of
the COPE
Sri Lanka
Cricket
Contd...
4. The Committee questioned as to
why, without renovating the
existing ground at Dambulla,
decision taken to construct a new
ground in Hambantota.
5. The Theft of compact disk
containing the accounts of World
Cup was questioned.
6. The selection of World Cup
Director (Tournament Director)
was questioned.
7. Following shortcomings/
weaknesses were observed.
(i) Total liabilities being
Rs. 6.1 billion, with the
total assets were only
Rs. 3.1 billion
(ii) Requesting of a loan
from the Bank of
Ceylon
(iii)Income receivable from
the ICC not yet being
recovered
8. The Committee questioned how
the M/s Summerset Entertainment
Venture was selected as telecaster
of Sri Lanka Premier League
Matches (SLPL).
It was informed, that has been done
after obtaining 05 bids having
advertised in the Web site.
4. According to the CAO, such
a decision was taken as the
Dambulla ground was the only
available ground to play 15
day and night matches at that
time. 5. It was informed that. there had
been no impact on the
information as they had back up
6. The Committee was
informed that, although there
was no scheme of recruitment,
having consulted the experts
in the field, the present
director was selected.
7. Replied that to pay the
liability, they have applied the
loan from the Bank of Ceylon.
and the ICC would pay the
due amount when audited
expenses are forwarded
The Committee directed to
send a report including income
and expenditure of the Board
from the year 2009 to date.
8. The Committee’s concern
was giving telecasting right to
M/s Carlton Sports Network
by M/s Summerset
Entertainment Venture.
Following information were
requested by the Committee;
(i) The tender procedure that
was followed in regard to the
selection of M/s Summerset
Entertainment Venture,
(ii) Board of Directors and
Shareholders of the
Summerset Entertainment
Venture,
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Date/Name of
the Institute
& Ministry
Major Issues & Problems
Identified
Comments & Decisions of
the COPE
Sri Lanka
Cricket
Contd...
9. The Committee queried as to
how the contracts were given to the
companies.
10. Payment of Rs. 650,000/- to
some officers was questioned.
11. The Committee questioned as to
how, the agreement entered into
between the Cricket Board and the
Galle Municipal Council had been
terminated and now the
maintenance of the stadium is done
by the Southern Provincial Cricket
Association.
(iii) The date on which this
company had been registered
in Singapore,
(iv) A detailed report on the
Carlton Sports Network and
the relationship between these
two companies,
(v) Previous tournaments that
had been telecast by these two
companies, and their
experience in this field.
The dissatisfaction of the
Committee was expressed on
offering the tender to an
organization in which the
Secretary of the Cricket Board
was functioning as the CEO.
9. It was revealed that on a
Cabinet decision, the
(Sooriyawewa) Hambantota
ground was given to Sri
Lanka Ports Authority, and
other two to the State
Engineering Corporation.
It was brought to the notice of
the Committee that the total
loan obtained by the Board
had been Rs. 22.5 million.
10. It was revealed that this
amount had been paid to some
officers for doing a good job in
the Australian tour, on approval
of the interim committee.
Directed to send a list of names
of them.
11. Directed to submit the
agreement signed between the
SL Cricket & the Southern
Provincial Cricket
Association.
REPORT FROM THE COMMITTEE ON PUBLIC ENTERPRISES OF THEPARLIAMENT OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA______________________________________________________________________________
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Date/Name of
the Institute
& Ministry
Major Issues & Problems
Identified
Comments & Decisions of
the COPE
Sri Lanka
Cricket
Contd...
12. In contrary to the tender
document, the agreement signed
between the Sri Lanka Cricket and
the Summerset Entertainment
Venture, a separate clause had been
entered, i.e. the sponsor had a right
to sell the team for a further 25
years’. Enquired when there is no
track record what was the rational
to offer the tender to Summerset
Entertainment.
13. It was noted by the Committee
that either a Corporate Plan or an
Action Plan had not been
prepared by the Sri Lanka
Cricket.
14. The Committee observed that
the Sri Lanka Cricket had paid
Rs.1,460,000 to SLIDA for an
assessment of Cadre , in which
case the following shortcomings
were noted.
• Acceptable procedure for
promotion not being
introduced.
• Salary structure and age
limit for each post not being
included
• Proposal to increase the
present cadre 267 up to 727
in 2013 without any
justification for expansion
of work
12. It was revealed that on the
approval of the Interim
Committee, chairman and
CEO had signed the
agreement. Having questioned
about the nature of the bank
guarantee, directed the CAO
to discus with the Hon.
Minister in this regard and
submit a report.
The Committee was of the
opinion that disciplinary
action should be taken against
the persons involved in this
transaction.
13. The former CEO stated
that the Institute had never
prepared such documents
earlier. And it was further
stated that the Corporate
Plan newly prepared for the
period 2011-2015 and the
Action Plan would be tabled
before the Committee on
this day itself.
14. The Committee directed
the CAO/AO to submit
following details to the
Committee.
• A copy of the report of
the SLIDA approved
by the Sri Lanka
Cricket.
• Letter of instructions
received from the Hon.
Minister to obtain the
services of SLIDA in
the cadre requirement
• A report on the 18
personnel who are above
55 years with their
names, designations and
salaries & incentives.
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Date/Name of
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& Ministry
Major Issues & Problems
Identified
Comments & Decisions of
the COPE
Sri Lanka
Cricket
15.The Committee noted that 47
employees had been recruited in
2010 and most of them did not have
the basic qualifications and
experience relevant to the particular
post
16. The Committee observed that
the initial estimate for
construction of the 03
playgrounds Hambanthota,
Pallekele & Kettarama had been
Rs.3.3 billion where the total
expenditure had been Rs.7.18
billion
17. It was reported to the
Committee of certain instances
where the requested information
had not provided with to the
Auditor General.
15. Although the officials of
the former Board stated that
the selection had been done
following the scheme of
recruitment, the committee
having observed that there had
been certain instances where
the scheme of recruitment had
not been followed, directed to
submit the following
documents to the Committee
within a month’s time.
• The paper
advertisement which
the posts had been
advertised in.
• 38 and 45 applications
received for the posts
of HR Executive and
the Data Entry
Operator respectively
with the finding of the
interviews held.
16. The Committee directed
the officials of the Cricket
Board to submit a detail report
with regard to the price
escalation and all other
relevant information to the
Committee of these 03 play
grounds.
17. Independence of the audit
needs to be maintained.
July 08 , 2011
Buddhasraw-
aka Bhiksu
University
Contd….
1. The Committee observed that
the Annual Report for the year
2009 had not been tabled in
Parliament.
2. It was observed that the
1. The CAO/AO was directed
to take early action to table
that in Parliament.
2. Directed to submit the
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Date/Name of
the Institute
& Ministry
Major Issues & Problems
Identified
Comments & Decisions of
the COPE
Buddhasraw-
aka Bhiksu
University
Ministry of
Higher
Education
Estimated Balance Sheet as at the
end of the year and the Estimated
Cash Flow statement had not
been included in the Budget as
per the Circular No. PED/12.
3. The Committee enquired as to
why action had not been taken to
recover Rs.1,998,417/- the
amount in respect of surety for
foreign travels and other
agreements, from the 02 trainee
lecturers whose service had been
terminated.
aforesaid statement within
two weeks time to the
Committee.
3. As the CAO /AO stated
that there had been a
balance of Rs.252,200/-
and Rs.555,257/-
respectively to be
recovered from those two
lecturers and the legal
assistance of the Attorney
–General’s Dept had been
sought for this purpose, the
Committee directed the
CAO /AO to submit a
report on the action taken
in this regard to the
Committee.
July 07th
2011
Sri Lanka
Foundation
Presidential
Secretariat
Contd..
1. It was observed that the Annual
Report for the year 2009 had not
been presented in Parliament.
2. The Committee observed that the
out of total amount of Rs.43.9
million received as Capital
Grants for the period of 2006-
2010, only Rs.39.1 million had
been utilized.
3. The Committee enquired as to
why the investments of the
Institute had gradually been cut
down.
4. The Committee observed that the
vision and the objectives indicated
in the Corporate Plan had been
contradictory to those specified in
1. The Committee directed the
CAO/AO to take early
action to table the same in
Parliament.
2. The CAO/AO stated that by
now the Institute had
utilized balance funds to
purchase equipments and the
delay was due to tender
procedure.
3. It was brought to the notice
of the Committee that due to
the situation prevailing in
the country and also the
grants received from the
Treasury had gradually been
cut down the Institute had to
use these investments for
essential expenses.
4. The Committee was
informed that at a discussion
had with H.E. the President
it had been decided to
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Date/Name of
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& Ministry
Major Issues & Problems
Identified
Comments & Decisions of
the COPE
Sri Lanka
Foundation
the Sri Lanka Foundation Act.
5. The Committee observed that a
tender valued at Rs.18.74
million had been awarded for
construction of the Head Office
and as the proposed land had
been taken over by the UDA and
the contract also had been
terminated, the mobilization
advance of Rs.3.4 million could
not be recovered.
amend the Act accordingly.
5. As the CAO/ AO explained
that on a ministerial Tender
Board decision the contract
was awarded and due to the
contract being terminated in
2004, the institute took a
decision to execute the
Bank Guarantee in which
case the contractor had
obtained an injunction
order and had filed a case,
the Committee directed to
submit a report on this
matter.
July 19, 2011
Institute of
Fundamental
Studies
Ministry of
Technology
& Research
1. In the Corporate Plan prepared
for the period of 2010 – 2014, the
main components had not been
included and it had not been
approved by the Board of
Directors.
2. The fixed assets valued at Rs.
371,946,503/- had become zero
as at December 2011, where
action had not been taken to
revalue and account for those
assets in terms of SL Accounting
Standards No. 18.
1. The Committee directed
the CAO/AO to get this
process expedited.
2. It was stated that a
Committee had been
appointed to re-value those
assets, and it is under
process.
August 09,
2011
Bank of
Ceylon
Ministry of
Finance &
Planning
1. The Committee observed that a
loan of Rs.340 million had been
granted to M/s. International
Grocers Alliance.
2. As the CAO/AO stated that
the loan approved to M/s.
International Grocers
Alliance, possessing 40% of
the shares of the Sathosa
Retail Company had been
given by a cheque to the
General Treasury to pay half
the value of the above
shares. the Committee
directed the CAO/AO to
submit a report on the
whole issue to the
Committee.
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Major Issues & Problems
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Comments & Decisions of
the COPE
Bank of
Ceylon
Contd...
2. The Committee observed that
Bank had granted Rs. 150 million
to Mahinda Offset Printers as a loan
3. The Committee noted that the
Bank had granted loans to six
private companies without any
adequate securities and the
outstanding balance of those
loans as at 31.5.2011 had been
US $ 0.899 million ( Rs. 90
million), and enquired about the
current position.
4. The Committee questioned with
regard to a loss of Rs. 33.9
million in connection with
robbed articles in Badulla
Branch.
5. The Committee observed that 40
advance payments had been
granted by 8 branches, where a
single installment had not been
paid, and the outstanding balance
as at 31.12.2009 had been Rs.
1,283 million.
2. The CAO/AO stated that
only Rs. 24 million had been
settled by M/s. Mahinda
Offset Printers and
informed the Committee that
they had taken several
measures to strengthen the
Credit management and
Recovery management to
reduce such kind of risks in
future.
3. The CAO/AO stated that
some of these companies
were involved in apparel
industry, and some had gone
under liquidation, and that
the Bank would take legal
action to recover the due
balances.
4. The CAO/AO stated that
the initial loss had been Rs.
83.9 million, and that the
Bank received 50% from the
Insurance Company, and the
loss had been reduced to Rs.
33.9 million and also stated
that the Police had been able
to trace 17.9 kilos of gold,
and that by selling those
gold, the Bank could cover
their loss, but the gold was
still under the Police
custody.
5. The CAO/AO stated that
the Bank was closely
monitoring, and that already
most of the loans had been
re-scheduled, and would
take early action to recover
the dues.
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Date/Name of
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& Ministry
Major Issues & Problems
Identified
Comments & Decisions of
the COPE
Bank of
Ceylon
6. Rs. 100 million overdraft
granted to Omega International
pvt ltd. against a mortgage
property and present outstanding
amount is Rs. 103.31 million.
The O/D had been granted within
one day which is doughtful.
7. Payment of PAYE tax on behalf
of the employees by the Bank.
8. Granting leasing facilities of Rs.
44 million to 09 branches without
obtaining any collateral.
9. Non performing loans amounting
to Rs. 2,286,948,763/- and non
performing overdrafts amounting
to Rs. 653,078,128/- given to 10
& 15 customers respectively.
10. BOC had granted a loan of Rs.
3.2 million to the Sri Lanka
Cricket.
11. Card Centre-Rs. 52 & 44
millions had been written off and
waived off respectively.
6. Bank would re-schedule the
O/D.
7. It was informed that, this
cannot be stopped due to
unrest of the employees.
8. As per the CAO this leasing
facility was to purchase
excavators and those
excavators themselves are
collateral.
9. According to the CAO,
Bank is negotiating with the
customers.
11. Now a special unit has
been set up to look into the
credit card transaction.
August 10 ,
2011
National
Institute of
Education
Ministry of
Finance &
Planning
Contd…
1. The Committee observed that the
Corporate Plan for the period
2008 – 2012 had not been
prepared as per the PED Circular
No. 12, and informed that the
responsibilities had not been
fixed as per the goals of the
Institute, and also the previous
and future forecast data had not
been included in the Corporate
Plan.
2. The Committee questioned as to
why the 2009 Annual Report had
not been presented in Parliament.
1. Directed to prepare the
Corporate Plan as explained
by the Committee
2. It was informed that the
2009 Annual Report had
been submitted to the
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Date/Name of
the Institute
& Ministry
Major Issues & Problems
Identified
Comments & Decisions of
the COPE
National
Institute of
Education
3. The Committee observed the
following shortcomings of the
NIE and enquired the reasons.
i. Operating expenses for the year
2010 , increased when compared
with 2009.
ii Development Centre Charges and
Workshop charges increased
iii. The deficit as at 2010 had been
Rs. 48.5 million
4. The Committee observed that a
digital camera and a video
camera worth of Rs. 29,950 and
Rs. 95,000 respectively had been
misplaced in the Planning
Division of the NIE.
Cabinet for approval, and
once it is approved, action
would be taken to table the
2009 Annual Report in
Parliament without further
delay.
3. As per the explanation there
had been change of
syllabuses from Grade 1 to
Grade 13 in the year 2010,
training of teacher advisors
and also 8000 un-trained
teachers had been trained in
the year 2010, where the
expenses of the Institute had
increased.
4. A Committee had been
appointed to inquire into this
matter and the relevant
report had already been
prepared.
August 11 ,
2011
People’s
Bank
Ministry of
Finance &
Planning
Contd…
1. The Committee observed the
following shortcomings in the
Internal Audit Section.
(a)The post of Chief Internal
Auditor had been placed under
the Senior Deputy Manager in
the organizational structure,
whereas it should have been
placed under the Chief Executive
officer of the Bank.
(b)The post of Chief Internal
Auditor had been vacant for a
long time.
.
(a) The Committee directed
the CAO / AO to re arrange
the organizational chart
placing the post of Internal
Auditor in the correct
position
(b)it was revealed that the
post had not been vacant for
a long time, and when the
post fell vacant, the Deputy
Internal Auditor was
promoted to that post on
acting basis within a period
of only 04 months.
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Date/Name of
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& Ministry
Major Issues & Problems
Identified
Comments & Decisions of
the COPE
People’s
Bank
2. As per the directive given at the
last COPE meeting held on
09.05.2007, the Committee
enquired the current position with
regard to a property of the
Veytex, which had presently
been transferred to the People’s
Bank.
3. The Committee observed an
unidentified balance of Rs.
4,451,811 as at December 2008
in the current account maintained
by the Card Centre.
4. The Committee enquired the
current position with regard to
the outstanding amount of
Rs.467.42 million due from the
Ceylinco Group of Companies.
2. As per the Cabinet decision,
this property had been
handed over to the Sri Lanka
Army, and that the Bank had
been informed that the
Ministry of Lands would
pay the value of this
property amounting to Rs.
315 million to the People’s
Bank.
3. At present the Bank had
been able to recover a large
amount and the balance due,
could be recovered before
the end of 2011. The
Committee observed that
card centre of the People’s
Bank had not shown a
progress as that of the other
Banks.
4 The CAO/AO stated that,
this amount had been
reduced to Rs. 120 million,
out of which Rs. 61 million
is to be re-scheduled.
August 25 ,
2011
Sri Lanka
Bureau of
Foreign
Employment
Ministry of
Foreign
Employment
Promotion
and Welfare
Contd...
1. The Committee observed that the
2009 Annual Report had not been
presented in Parliament.
2. The Committee noted that there
have been a number of vacancies
to be filled in the key posts of the
bureau.
3. The Committee observed the
following shortcomings in the
Foreign Employment Agency
Company (Pvt) Ltd, a subsidiary
company of the Foreign
Employment Bureau.
1. The Committee directed the
CAO/AO to send a report with
regard to the 2007, 2008 &
2009 Annual Reports to the
Committee, indicating the date
of submission to the Ministry,
Cabinet, and Parliament, etc.
2. All the vacancies in key
posts had already been
filled.
3. The Committee directed the
CAO/AO to report on this
and to discuss with the
Hon.Minister with regard to
the necessasity to continue
with this agency.
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Date/Name of
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& Ministry
Major Issues & Problems
Identified
Comments & Decisions of
the COPE
Sri Lanka
Bureau of
Foreign
Employment
i.The private auditors had
disclaimed the accounts for the
years 2007, 2008, & 2009 of this
Agency.
ii.The financial statements for the
years 2009 & 2010 of the
subsidiary company had not been
consolidated with the financial
statements of the Bureau,
iii.The Bureau had invested Rs. 5
million in the share capital since
1997, and only Rs. 1,380,000 had
been received in return for the
years 2006/2007.
4..The Committee having observed
that a payment of Rs. 2 million
had been made in 2009 to the Sri
Lanka Foreign Employment
Agency, by the Bureau, without
the approval of the Cabinet.
5. The Committee observed that a
Co-ordinator had been appointed
for the Korean language Training
Programme, and paid a sum of
Rs. 882,337 as salaries &
allowances and other perks,
without the approval of the Dept.
of Management Services.
6. The Committee enquired as to
why the staff of the Examinations
Dept., and the staff of the Bureau
who worked with the holding of
Korean Language proficiency
exams had been paid Rs.
8,036,590 and Rs. 1,971,650
respectively, in the year 2008.
4. The Committee directed the
CAO/AO to submit the
relevant information too, to
the Committee with copy to
Auditor General.
5. The CAO/AO was directed to
submit a detailed report to the
Auditor-General on the
appointment of this person,
and the Auditor-General would
make his observations and
send it to the Committee.
6. The Committee directed
the CAO/AO to explain
the position to the Auditor-
General.
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Date/Name of
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& Ministry
Major Issues & Problems
Identified
Comments & Decisions of
the COPE
August 23 ,
2011
Ceylon
Petroleum
Corporation
Ministry of
Petroleum
Industries
Contd...
1. The Committee queried about the
tabling of Annual Report.
2. The Committee queried as to
why the vacancies had not been
filled.
3. The Committee observed that
there had been a large amount of
outstanding debtor balances due
to be recovered by the
Corporation from various
institutions, and also Bank
Guarantees had not been obtained
from those institutions.
1. According to the
CAO/AO, 2007 Annual
Report had been prepared at
the correct time but the
Attorney General had
advised the Corporation not
to publish the report, until
the 02 Supreme court cases
and the foreign arbitration
would be finalized and that
the 2009 Annual Report had
also been drafted,the
Committee enquired
whether the Corporation had
any documentary proof
from the Attorney General
in this regard and directed
the CAO to discuss this
matter with the Attorney
General and to obtain a
clarification in writing and
also to submit a report to the
Committee in this regard.
2. As the CAO/AO stated that
they need to take action to
restructure the cadre
revising the salary scales,
the Committee directed the
CAO/AO to submit their
proposals with all
suggestion to the Treasury
for approval.
3. As the Treasury
Representative, informed the
Committee that the Cabinet
had decided to grant a bond of
Rs. 60 billion to the
Corporation to cover the debtor
balances from the CEB and
other Govt. entities, the
Committee directed the
CAO/AO to take action to
obtain Bank Guarantees
whenever essential.
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Date/Name of
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Major Issues & Problems
Identified
Comments & Decisions of
the COPE
Ceylon
Petroleum
Corporation
4. The Committee observed that
there had been some transactions
taken place with some foreign
companies.
4. The Committee directed the
CAO/AO to continue with
them having entered into
agreements.
August 24 ,
2011
State Timber
Corporation.
Ministry of
Environment
Contd...
1) The Committee observed that the
Annual Reports for the years
2008 & 2009 had not been
presented in Parliament, and also
the Procurement Plan had not
been prepared by the
Corporation..
2) The committee enquired the
current position about the
Investment of Rs. 30 Million
with a Private Company.
3). The Committee queried about
not obtaining written approval
to write off Rs. 14.4 million
worth of Debtors
1) It was informed that the
2008 & 2009 Annual
Reports had been prepared
and submitted to the
Cabinet for approval.
2) As the CAO/AO stated that
they had been informed by
the Attorney General that
there had been no evidence
to file a criminal case
against this Company, and
that now they are in the
process of filing a civil case
against this company, and
all documents relating to
this agreement had been
submitted to the Attorney
General’s Dept. Having had
a lengthy discussion, the
Committee directed the
CAO/AO to submit a
detailed report with regard
to this private company to
the Committee within 2
weeks time.
3). The Treasury
Representative informed
the Committee that there is
no special guideline to
instruct any Govt.
Enterprise to send the
details of their debtor
balances to the Treasury for
the approval to write off. It
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Date/Name of
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Major Issues & Problems
Identified
Comments & Decisions of
the COPE
State Timber
Corporation.
Contd...
4). The Committee observed that
there had been a loss of Rs. 11
million and 29 million
respectively for the years 2007
& 2008.
5) The Committee observed that the
Corporate Plan for the period
2008 -2012 had not been
prepared as per the PED/12 and
the targets expected to be
achieved yearly had not included
in the Corporate Plan.
6) The Committee noted that only
the objective with regard to sale
of timber had been included in
the Action Plan.
7). The Committee observed that
the Corporation had granted an
interest free loan of Rs. 2 million
in the year 1988 to the
Kataragama Astaphala Fund and
the outstanding balance as at
30.06.2011 had been Rs.
1,115,000.
8) The Committee enquired as to why
action had not been taken by the
Corporation to recover Rs. 11.87
million receivable from a private
company, since 1983.
was also stated that at
present the Treasury was
having continuous
discussions to have a policy
decision with regard to
these matters, and a circular
to this effect would be
issued in due course.
.
4). Due to some problems in
their financial system, these
losses had been indicated,
and after analyzing and
identifying the errors, the
loss had decreased
gradually.
5) The Committee directed the
CAO/AO to update the
Corporate Plan accordingly
6) The Committee directed the
CAO/AO to take action to
include all the objectives as
per the Corporate Plan
7) Public Trustee Dept. had
agreed to settle this amount
on installment basis, out of
the funds collected by
them.
8). As the CAO/AO stated that
as this British Company
was no longer in existence
in Sri Lanka, they had no
way to recover this amount,
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State Timber
Corporation.
9) The Committee observed that the
Corporation had selected a
contractor to construct 12
stocking sheds without any
evaluation by the Technical
Evaluation Committee, and also
the tender had not been offered
to the lowest tenderer, thereby
the Corporation had incurred a
loss of Rs. 580,896.
10. The vehicle, bearing the No.65-
4013, taken away by a former
minister, had not been returned
although several reminders were
sent.
the Committee directed the
CAO/AO to write to the
British High Commission
and find out some
information about this
company, and also to
discuss with the Auditor-
General and to see as to
what action they could take
to write off this amount.
9) Since the CAO/AO stated
that this decision had been
taken by the then Chairman
of the Corporation, without
the knowledge of the
General Manager, the
Committee wanted the
CAO to make aware of
such malpractices to the
Hon. Minister.
10. The CAO/AO was directed
to keep H.E.the president as
well as the Hon. Minister
informed of this matter and
also to lodge an entry in the
Police in this regard.
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Date/Name of
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& Ministry
Major Issues & Problems
Identified
Comments & Decisions of
the COPE
August 26 ,
2011
National
Water
Supply &
Drainage
Board.
Ministry of
Water
Supply &
Drainage
1. As per the accounts of the Water
Board, the total outstanding
amount due to be paid to the
Treasury as at 31st December,
2010 had been Rs. 5.4 billion.
2. The percentage of Non Revenue
Water (NRW) had been 33% in
the year 2010, wanted the
CAO/AO to see whether they
could reduce the NRW to an
acceptable level, by which, the
Water Board could reduce its
loss.
3. An unidentified balance of Rs.
1,179,693,016 had been shown
in accounts since 1994, and in
addition, an unidentified amount
of Rs. 119 million had been
disclosed in the year 2010.
4. The Water Board has only 04
professionally qualified
Accountants, and the rest of the
officers engaged in the
accounting task were from the
promoted staff.
1. Up to 30th
June, 2011, the
Water Board had paid Rs.
1,100 million to the
Treasury and the Board had
come to an agreement with
the treasury to pay Rs. 200
million annually to settle
outstanding amount.
2. It was stated that the Water
Board had taken action to
replace the pipe lines in
order to arrest this situation
3. On several occasions, the
Water Board had made
attempts to reconcile these
balances, but due to non-
availability of the relevant
documents, they had failed
to complete this task. With
regard to Rs. 119 million
balances as at year 2010,
the CAO/AO stated that out
of 110 accounts, 61
accounts had been
reconciled by now.
4. The Committee directed
the CAO/AO to submit a
report on staff vacancies
and the recruitment
procedures to the
Committee.
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& Ministry
Major Issues & Problems
Identified
Comments & Decisions of
the COPE
September 07
2011
&
October 17
2011
Ceylon
Electricity
Board
Ministry of
Power &
Energy
Contd...
1. An outstanding balance of Rs.
52 billion had been due to the
CPC and that amount had been
taken over by the Treasury.
2. Only 02 Audit & Management
Committee meetings each had
been held in the years 2010 &
2011.
3. 4,644 man power had been
outsourced by the CEB in a
situation where there are 2161
vacancies.
4. The directive dated 18.03.2009,
given by the COPE, to take a
decision on Mr.Caldera
considering the previous inquiry
report and the ruling of the
Attorney General, had not been
implemented
5. Proper documentation had not
been maintained by the CEB in
respect of the transformers
handed over to the Lanka
Transformers Ltd., either for
repairs or to be condemned and
details of transformers to be
returned to CEB by LTL.
1. The Treasury
Representative informed
the Committee that the
Cabinet had agreed to grant
a bond of Rs. 50.9 billion to
CPC through the Bank of
Ceylon, and that the
Treasury had taken over
this liability.
2. A large scale public
enterprises, like CEB
should hold Audit &
Management Committee
meetings at least once a
month.
3. It was stated that as and
when they require persons
for urgent work, they obtain
services from the private
companies.
4. The CAO had requested the
Attorney General to
reconsider his opinion
providing more information
and the Attorney General
had accepted that the
decision taken by the Board
of directors to exonerate
Mr. Caldera from the
charges is legal.
5. It was directed to submit
proper evidence to the audit
as well as the Committee
within two weeks time.
PARLIAMENTARY SERIES NO. 119
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70
Date/Name of
the Institute
& Ministry
Major Issues & Problems
Identified
Comments & Decisions of
the COPE
Ceylon
Electricity
Board
6. The liquidated damages of Rs.
41.7 million had not been
recovered by the CEB from the
IPP firm which had failed to
achieve the open cycle operation
on the due date.
7. The CEB had invested a sum of
Rs. 628,002,640 for purchase of
shares of LECO Ltd., but no
dividends had been declared by
the Company for the years 2002,
2003, 2007 & 2008.
6. This issue had arisen due to
confusion with regard to the
due date of the open cycle
operation and in the end,
the board had decided that
the due date had not lapsed
by then as an extension of
two months had been given.
The Committee directed to
submit the Board decision
within 2 weeks time to the
Committee.
7. It was stated that, 8%
returns on revalued assets
are required to declare
dividends, as per the loan
agreement with Asian
Development Bank and this
target had not been
achieved by LECO for the
last few years.
REPORT FROM THE COMMITTEE ON PUBLIC ENTERPRISES OF THEPARLIAMENT OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA______________________________________________________________________________
71
Date/Name of
the Institute
& Ministry
Major Issues & Problems
Identified
Comments & Decisions of
the COPE
September 09
, 2011
National
Transport
Commission
Ministry of
Private
Transport
Services
Contd...
1) The Committee observed that
the Corporate Plan prepared for
the period 2011 – 2015 had not
been submitted to the relevant
authorities.
2). The Committee observed that
the Annual Reports for 2008,
2009 and 2010 had not been
tabled in Parliament.
3) The Committee observed that the
Commission had spent Rs. 20
million exceeding the provisions
granted by the Treasury in the
year 2009 to carry out 05
projects, out of which Rs.13
million had been recorded in an
accrued account without
considering that amount as an
expenditure of the projects in
2010.
4) The Committee noted that due to
reconciliation had not been done,
differences of Rs. 3.2 million,
Rs. 1.8 million and Rs. 6.9
million in the years 2008, 2009
and 2010 respectively had been
shown in the accounts.
1).As the CAO/AO stated that
there had been a delay, but
after obtaining Board
approval in march 2011, it
had been submitted to the
line Ministry, Auditor-
General’s Dept. and the
Treasury with the Action
Plan. and that the Corporate
Plan had been submitted to
the Auditor-General’s Dept.
on 28.07.2011. the
Committee directed the
CAO to look into this
matter and report back.
2) 2008 & 2009 Annual
Reports had already been
submitted to the Cabinet,
and action would be taken
to table 2008 & 2009
Annual Reports in
Parliament early and agreed
to table the Annual Reports
from 2010 in Parliament
before the prescribed period
of time
3) Due to the matter that the
projects had been continued
to the following year, this
money had been utilized for
that particular year’s
projects and agreed to see
that such shortcomings in
accounts would not occur in
future
4) It was informed that, in
certain projects log sheets
were received after about 2
months on the completion
of projects, so that these
amounts had been carried
forward for the following
year
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72
Date/Name of
the Institute
& Ministry
Major Issues & Problems
Identified
Comments & Decisions of
the COPE
National
Transport
Commission
5) The Committee observed that
Rs. 17.696 million and Rs.
147.696 million had been
invested in the fixed deposits
without the concurrence of the
Hon. Minister of Finance and the
approval of the Minister in
charge
5) The Committee directed the
CAO/AO to obtain
covering approval from the
respective parties as early
as possible.
September
20, 2011
Water
Resources
Board
Ministry of
Irrigation &
Water
Rresources
Management
1. Annual reports for the years of
2008 and 2009 are yet to be
tabled.
2. A sum of Rs.3,285,640 had been
spent to carry out the
improvements of the temporary
building situated on a land
without securing the legal title of
the land.
3. Rs. 204,547 had been paid to a
retired officer as a surcharge for
the delay in the payment of
gratuity.
1. It was directed to table them
as early as possible.
2. It was directed to get the
assistance of the
commissioner of Lands and
obtain the title deeds.
3. It was informed that there
was no fund in the account
to pay his gratuity at the
time of his retirement.
REPORT FROM THE COMMITTEE ON PUBLIC ENTERPRISES OF THEPARLIAMENT OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA______________________________________________________________________________
73
Date/Name of
the Institute
& Ministry
Major Issues & Problems
Identified
Comments & Decisions of
the COPE
September
21, 2011
University of
Perdeniya
Ministry of
Higher
Eduacation
1. The amount to be recovered from
lecturers due to breach of
agreements is Rs.105 million.
2. There are 173 unanswered audit
queries out of 287 audit queries
issued for the period from 2008
to 2011.
3. Rs. 31,494,765 had been paid as
language proficiency allowance.
4. Rs.12,383,503 had been paid for
3 lecturers to follow a post
graduate diploma which had not
been completed by these three
lecturers and moreover, an
amount of Rs.1,058,048 had
been paid as salaries although
they had been on No-Pay leave.
5. A temporary lecturer had been
paid a sum of Rs.1,231,905
without obtaining a security
bond and this lecturer had not
reported to the University after
studies in overseas.
6. A stock of furniture worth of
Rs.12,613,263 and
Rs.16,220,542 for the Ivor
Jennings Hostel and this stock is
not upto the standards.
7. A professor had obtained salaries
and allowances from the
university as well as from three
other institutions amounting to
Rs.2,046,016 and Rs.1,493,000
for the same period.
8. A payment of Rs. 500,000 had
been paid as consultancy charges
to the State Engineering
Corporation without entering
into an agreement where the
construction work is yet to be
started.
1. It was informed that every
possible action is taken to
recover the dues.
2. It was directed to send
replies without further
delay.
3. The allowance had been
paid in contrary to the
circulars.
4. It was directed to hold an
inquiry against the officers
responsible for this
payment and also to recover
the paid amount.
5. It was stated that an inquiry
is being conducted.
6. The same supplier had
under took to deliver items
in good conditions without
any additional charges.
7. Action has been taken to
recover the additional
amounts paid.
8. It was stated that the
construction work will be
started once the allocation
is released from the
Treasury.
PARLIAMENTARY SERIES NO. 119
______________________________________________________________________________
74
Date/Name of
the Institute
& Ministry
Major Issues & Problems
Identified
Comments & Decisions of
the COPE
September
22, 2011
Sri Lanka
Transport
Board
Ministry of
Transport
1. There is a delay in tabling
Annual reports in parliament.
2. The number of employees are
around 34,000 whereas the
number of busses in operation
are 5225.
3. Although the revenue of the
board has increased, the
expenditure also had increased
drastically.
4. Rs.14,178,548 had been paid
during the period from 2005 to
2010 for issuing cheques without
considering the liquidity.
5. There is a loss of Rs. 5 million
per year due to unlimited leaves
obtained by drivers and
conductors.
6. There was an outstanding of
Rs.11,397,657 due from 5 depots
for special transport hires and
Rs.124,809,177 from the
Ministry of Disaster and Relief
Services for providing busses for
the transport of refugees.
7. The board had received neither
the rent nor the shop even after
the lapse of the leased period by
leasing a shop at Pettah.
1. It was agreed to table the
outstanding reports at
earliest.
2. The Committee was
informed that action is
being taken to increase the
number of busses up to
6000 by the end of 2011.
3. This is due to non control of
the expenditure and
directed to pay attention on
this matter.
4. It was revealed that the over
draft facility was obtained
to pay salaries and agreed
to refrain from obtaining
OD facilities in future.
5. It was agreed to take action
to rectify the matter.
6. It was stated that action is
being taken to recover the
dues.
7. A case had been filed
against the person.
September
23, 2011
Geological
Survey &
Mines
Bureau
Ministry of
Environment
1. Annual reports for the years of
2008 and 2009 had not been
tabled.
2. Fixed assets had not been
revalued and accounted.
3. Action has not been taken to
report the damages caused to 7
motor vehicles in 10 instances,
1. It was directed to table them
as early as possible.
2. It was informed that the
revaluation process is under
way.
3. It was informed that the
action has been taken to
REPORT FROM THE COMMITTEE ON PUBLIC ENTERPRISES OF THEPARLIAMENT OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA______________________________________________________________________________
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Date/Name of
the Institute
& Ministry
Major Issues & Problems
Identified
Comments & Decisions of
the COPE
Contd..
Geological
Survey &
Mines
Bureau
to the Auditor General in terms
of Financial Regulations.
4. The accounts of the Geological
Survey and Mines company
established by the company had
not been shown.
furnish these details to
Audit.
4. It was stated that action
would be taken accordingly
to correct the issue.
October 06,
2011
Sri Lanka
Ports
Authority
Ministry of
Ports &
Aviation
Contd...
1. Out of the estimated total
Consultancy fees of Rs.978
millions, in the construction of
the Galle Port, a sum of Rs.455.5
millions had been incurred up to
the end of 2008 and due to the
delay in other works on
construction contract, the
consultancy service had been
suspended temporarily at the
moment.
2. As far as the information
provided with regard to each
port including their location,
funding agency, and funding
mode i.e: loan or grant, it was
observed that the authority had
to bear an unbearable foreign
exchange loans of which the
foreign exchange rates changes
rapidly and except for the
Colombo Port, most of the other
ports were running at a loss.
3. The present actual carder of the
authority is 11,067 out of which
9700 are employed in Colombo.
4. According to an agreement
entered into between the
Authority and the South Asian
Gateway Terminal, the
Authority had paid an indirect
taxes amounting to
Rs.284,402,724 for a period of
11 years.
1. It was informed that a
decision has been taken to
develop the Gall port as a
commercial/leisure port
without damaging the
preliminary plans as the
Hambanthota Port is being
constructed as a good
handling port.
2. It was informed that a
decision has been taken to
develop most of the other
ports as commercial/leisure
ports to overcome these
losses.
3. It was stated that the
authority had not recruited
staff for the Hambanthota
but as and when necessary,
the staff is being released to
Hambanthota.
4. It was informed that the
Authority has no other
alternative other than
paying these taxes for 35
years from the year 1999,as
per the agreement, although
the shortcoming had been
identified.
PARLIAMENTARY SERIES NO. 119
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76
Date/Name of
the Institute
& Ministry
Major Issues & Problems
Identified
Comments & Decisions of
the COPE
Sri Lanka
Ports
Authority
Contd…
5. An expenditure of Rs.9,292,676
had been incurred on carrying
out repairs to the official
quarters of a former deputy
minister who had no connection
with the Authority.
6. The maintenance of the Gall
Face Green is provided by the
Sri Lanka Ports Authority where
a private party had been allowed
to collect money from the users
of the premises.
7. The debtor balance of shipping
agents as at 30.08.2011 had been
Rs.1,595,139,778.
8. There is a recoverable rent
income of Rs.93,403,172 as at
31.08.2011 of which Rs.
55,517,194 had been remaining
for more than 5 years.
9. Two cranes purchased at a cost
of Rs.444 million in the year
2008 had been idling even by
30.06.2010.
10. In the Oluwil Nautical Training
Institute, the number of students
following the courses was less
than 20 although a staff of 102
had been deployed for the
purpose.
11. Sri Lanka Ports Authority had
engaged in several controversial
construction work including
Suriya Wewa Cricket stadium
and the Ceremonial Hall at the
Araliyagaha Mandiraya.
5. The Committee was
informed that this had been
formerly, the official
quarters of the former Dy.
Minister & that they had
written to the Ministry of
Public Administration to
reimburse this expenditure.
6. It was informed that a trade
union in the Authority had
been collecting money from
the users of the premises
and it is used for the
welfare of the staff.
7. It was directed to recover
the possible balances which
are within the credit period
and to write off the rest
with necessary approval.
8. It was stated that all
necessary action has been
taken to recover this
amount.
9. A suitable track had been
built at the moment.
10. The Committee was
informed that it is expected
to implement some courses
after the completion of
construction work of the
Oluwil Port.
11. It was informed that the
Authority had involved
with these construction
works upon Cabinet
decisions and for the
REPORT FROM THE COMMITTEE ON PUBLIC ENTERPRISES OF THEPARLIAMENT OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA______________________________________________________________________________
77
Date/Name of
the Institute
& Ministry
Major Issues & Problems
Identified
Comments & Decisions of
the COPE
Sri Lanka
Ports
Authority
construction of the Cricket
ground Sri Lanka cricket
had paid Rs.1200 million so
far and for the Ceremonial
hall, Rs.11.9 million had
been reimbursed out of the
total expenditure of Rs.35
million.
October 12,
2011
Development
Lotteries
Board
Ministry of
Finance &
Planning
Contd...
1. The Corporate plan for the period
2011-2015 contains number of
shortcomings.
2. 26 motor vehicles had been
obtained on hire basis for a
period of four years making an
advance payment of Rs. 24
million contrary to the FR and
without the concurrence of the
Ministry.
3. Without following the
procurement procedure, 14,075 T
shirts had been purchased.
4. The building in Union Place
which was purchased for Rs.421
million remains closed down for
three years and the office of the
board had been maintaining in a
leased building paying Rs. 16.1
million as the rent.
5. Rs. 276,673,546/- had been
invested in Treasury Bills and
Fix deposits in 21 instances in
2008 without the approval of the
Ministry.
6. The procument procedure of the
Government had not been
applied in connection with the
promotional expenditure of
Rs.17,750,000/- incurred in the
year 2009.
1. It was directed to revise the
Corporate plan.
2. The matter had been
referred to the Bribery &
Corruption commission.
3. It has been informed that
the said transaction had
taken place during the
previous management.
4. The Committee was
informed that the board
occupied in the new
building in 2008.
5. It was informed that this
action had been taken with
a view to earning an
interest.
6. The Committee was
informed that this had
happened during the
previous management.
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78
Date/Name of
the Institute
& Ministry
Major Issues & Problems
Identified
Comments & Decisions of
the COPE
Development
Lotteries
Board
7. A sum of Rs. 6,339,148/- had
been paid to officers as the
Attendance and Transport
Allowance without the Treasury
approval.
8. A loss of Rs.624,633/- had been
incurred due to the failure to
encash the Tax Reserve
Certificates within 03 years.
9. The procument guide lines had
not been followed in selecting a
service provider for the printing
of lottery tickets and had
incurred an expense of Rs. 75
million .
7. The Committee was
informed that this practice
is in existence for a long
time.
8. It was directed to write off
this amount with the
necessary approval.
9. It was informed that, as per
the Cabinet decision, the
tenderer who produced the
lowest tender was selected
to enter into an agreement
till 2012.
October 12,
2011
Lanka
Mineral
Sands Ltd.
Ministry of
State
Resources &
Enterprise
Development
1. Even though the COPE had
directed not to market mineral
sands without offering tenders,
15,750 MT of Ilmenite at US$
100.74 per MT and 445 MT of
Rutile at US$ 846.65 per MT
had been sold to the previous
buyer without calling for
tenders. By that time, the market
price of Ilmenite and Rutile
amounted to US$ 311 and US$
1776 per MT respectively and as
such the estimated loss
amounted to Rs.408,835,843/-
2. It was observed that there are
three officers including the
General Manager who are above
60 years.
1. It was stated that a sub
committee had been
appointed to check the
variances in the World
Market. The Committee
directed to submit separate
reports by the Internal
Auditor and the Institution.
2. It was directed to get the
Cabinet approval.
REPORT FROM THE COMMITTEE ON PUBLIC ENTERPRISES OF THEPARLIAMENT OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA______________________________________________________________________________
79
Date/Name of
the Institute
& Ministry
Major Issues & Problems
Identified
Comments & Decisions of
the COPE
October 13,
2011
National
Building
Research
Organization
Ministry of
Disaster
Management
1. There are 27 vacancies in the
approved carder of 223.
1. The Committee was
informed that the approved
cadre has been revised and
that the new cadre is 273
and further it was
mentioned that the
organization had been
confronted with a financial
problem to fill all the
vacancies.
October 14,
2011
Air Port &
Aviation
Services Ltd.
Ministry of
Civil
Aviation
1. The institution had not prepared
combined financial statements
and instead three financial
statements are prepared.
2. Rs.17,691,195 had been paid as
interest due to the delays
experienced in the land
acquisition process during the
last two years.
3. The company had not paid the
dues this year which had to be
paid for the loans obtained.
1. It was agreed to do the
amalgamation once the
ambiguity with regard to
the ownership of certain
lands is cleared.
2. It was agreed to submit a
report on the land
acquisition process.
3. The treasury was directed to
send all the particulars with
regard to those outstanding
amounts and informed the
CAO/AO to send a reply
once those particulars are
sent by the treasury.
October 18,
2011
Mahaweli
Authority
Ministry of
Irrigation &
Water
Resources
Management
1. The following irregularities were
reported regarding the buildings
owned by the Authority.
a) 180 buildings had been
abandoned without carrying out
any repairs.
b) 204 buildings and official
residences remain idle in 03
regions.
1. It was directed to submit a
report on the abandoned
buildings and the others.
PARLIAMENTARY SERIES NO. 119
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Date/Name of
the Institute
& Ministry
Major Issues & Problems
Identified
Comments & Decisions of
the COPE
Contd...
Mahaweli
Authority
c) 200 and 193 official residences
in Walawa and Welikanda
respectively had been used by
unauthorized parties.
2. The lease installments amounting
to Rs.1,185,400 recoverable
from the Venture Capital (Pvt)
company had not been recovered
and the self employment loans
granted to private parties
amounting to Rs.7,412,353 had
been outstanding.
3. It can not be satisfied with the
way the Authority had leased out
the lands for telecommunication
posts and moreover, the rentals
for those transactions had not
been obtained.
4. Eight vehicles belonging to the
Ministry had been taken out by
the Hon. Ministers when their
portfolios have been changed.
2. It was informed that the
prescribed period for any
legal action has been lapsed
as these loans are dated
back to more than 10 years
and the Venture Capital
Company is also under
liquidation. Therefore, the
Committee directed to write
off these amounts if there is
no way of recovering.
3. It was directed to obtain the
rentals as per the agreement
for fixing of the posts and
not for the land value. It
was also directed to submit
a report on the lands
including the number of
lands leased out for this
purpose island wide and the
parties to which these lands
had been leased out and
also the copies of the
agreements with the
amount obtained for each
post.
4. It was stated that one
vehicle had been received
out of the eight vehicles.
REPORT FROM THE COMMITTEE ON PUBLIC ENTERPRISES OF THEPARLIAMENT OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA______________________________________________________________________________
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Date/Name of
the Institute
& Ministry
Major Issues & Problems
Identified
Comments & Decisions of
the COPE
October 19,
2011
Sri Lanka
State
Plantations
Corporation
Ministry of
State
Resources &
Enterprise
Development
1. The difference between the
balances shown in the financial
statements and those appearing
in the relevant ledger accounts is
Rs.4,125,534,243.
2. The lease rent amounting to
Rs.8.5 million remains un-
recovered from 6 institutions as
at 30.09.2011.
1. Although it was stated that
those balances had been
reconciled by now, the
Committee directed to
submit a report indicating
as to how these balances
had been reconciled.
2. Almost half of the due
amount is from Sri Lanka
Broadcasting Corporation.
October 19,
2011
National
Lotteries
Board
Ministry of
Finance
Contd...
1. Internal audit of the institute is
carried out by an external audit
firm.
2. A large amount of money had
been spent for modernization on
a rented building and for the
three years from 2008 to 2010,
the amount spent had been
Rs.8,123,348.
3. The total debtor balance as at
30.09.2011 is Rs.207 million.
4. The loss incurred by the board
upon the investment in the On
line National Lottery Company
had been Rs.983 million and that
amount has been written off from
the books upon a cabinet
decision.
5. Advances amounting to Rs.29
million which exceeds the 20%
of the contract amount had been
granted as mobilization advance
and it is a violation of the
Government procurement
guidelines.
1. It was directed to establish
an internal audit unit from
the institute once the
contracted period with the
private firm is over.
2. It was directed to submit a
breakdown of the
expenditure.
3. It was informed that every
possible action is being
taken to recover the debts.
4. The board had not received
any dividend by this
investment.
5. It was directed to submit the
names of the advertising
firms and the amount paid to
each firm from year 2009 to
2011.
PARLIAMENTARY SERIES NO. 119
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82
Date/Name of
the Institute
& Ministry
Major Issues & Problems
Identified
Comments & Decisions of
the COPE
National
Lotteries
Board
6. When printing the lottery tickets, the
board gets 50% of the tickets
printed by the State Printing
Corporation and the rest is printed
by a private company.
6. The answer of the CAO was
that giving the quota only
to one printer would create
a monopoly.
October 20,
2011
University of
Ruhuna
(Ministry of
Higher
Education)
Contd...
1. No Annual report has come
before the Parliament after 2005.
2. Out of the 175 audit queries
issued since 2000, 112 queries
still remain unanswered.
3. The Corporate plan prepared for
the period 2011-2015 had not
been approved by the Council
.
4. It was observed that the
following assets had been idling.
a) 312 KW generator
b) 62 acres out of the Gam Udawa
grounds belonging to the faculty
of agriculture. ( valued at Rs.184
million)
c) Mobile Clinic valued at US $
450,000
d) Stock of medical equipment
received as a donation.
5. The construction of the examination
hall had been abandoned after
spending Rs. 377,770.
6. Nine research projects had been
abandoned after spending Rs.
1,388,590.
1. It was directed to table the
outstanding reports before
the commencement of the
Budget.
2. It was directed to reply all
the audit queries with copies
to the Committee.
3. It was agreed to take
necessary action at
earliest.
4. It was stated that there are
some problems regarding
the generator and the land.
It was further mentioned
that it was not economical
to use the mobile Clinic,
received during the
Tsunami Period and
therefore the institute is
willing to donate it to any
institution willing to make
use of it.
5. The construction work has
come to a standstill as the
first and the second
contractors had abandoned
work but now, the contract
had been awarded to
CECB.
6. It was revealed that these
research projects had been
abandoned as some of the
members of the academic
staff had gone overseas
abandoning the projects.
REPORT FROM THE COMMITTEE ON PUBLIC ENTERPRISES OF THEPARLIAMENT OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA______________________________________________________________________________
83
Date/Name of
the Institute
& Ministry
Major Issues & Problems
Identified
Comments & Decisions of
the COPE
University of
Ruhuna
7. The Internet Protocol Telephone
System installed spending Rs.
4,375,678 had not been used for
the said purpose so far.
7. Since it was mentioned that
there was a problem with
regard to the brand and its
obsolete condition, the
Committee directed to
submit a comprehensive
report on this matter.
October 20,
2011
University of
Kelaniya
Ministry of
Higher
Education
1. Annual reports for the years of
2008, 2009 and 2010 had not
been tabled.
2. There are 254 vacancies.
3. Due to number of accounting
deficiencies, the audit opinion for
the 2010 had been disclaimed.
1. It was directed to table all
the outstanding reports as
early as possible.
2. It was informed that the
institute is in the process of
filling the vacancies.
3. It was directed to discuss
this issue with the Auditor
General and take action to
correct it.
October 21,
2011
Sri Lanka
Institute of
Development
Administrati
on
Ministry of
Public
Administrati
on & Home
Affairs
1. Audit & Management Committee
meetings had not been held for
the year 2011.
2. Fully depreciated non- current
assets which are in use, had not
been revalued and brought to
accounts.
1. This is essential for the
going concern of the
institution.
2. The institution had not
followed to the SLAS 18.
October 21,
2011
Land
Reforms
Commission
Presidential
Secretariat
Contd...
1. The Auditor General had
expressed a disclaimer opinion
on the financial statements for
number of years.
1. It was directed to pay
attention on the SLA
standards when preparing
accounts, large amount of
unsettled balances,
unrecognized lands
acquired by the
Commission and the non
moving debtor balance of
Rs. 2,140,531,267 remained
over a period exceeding 8
years.
PARLIAMENTARY SERIES NO. 119
______________________________________________________________________________
84
Date/Name of
the Institute
& Ministry
Major Issues & Problems
Identified
Comments & Decisions of
the COPE
Land
Reforms
Commission
2. According to a judgment of the
Supreme Court on a case filed
on non allocation of the
minimum of the land for the land
lord on land taken over by the
Government, a sum of Rs.
148,715,363/- had to be paid to
the plaintiff.
3. Contrary to the circular of
Government lands, there had
been cases where the lease
agreements had not been entered
into, non-cancellation of lease
agreements following the breach
of conditions and defaulting of
payments and not renewing lease
agreements.
4. It was observed that a 15 acres
land in Mirigama had been
leased out for a period of 50
years subject to lease rent of
Rs.7,000,000/- and as per the
conditions laid down in the
agreement entered into in 1995,
the institute can not either cancel
or take any step on this matter.
5. A three acre land in Homagama
had been leased out to a private
party without entering into a
lease agreement and the amount
to be recovered from the party is
Rs.2,430,311/-
2.The appeal made against the
former verdict had also
been defeated and the
institute has to pay this
amount to the particular
party with interest.
3. It was informed that these
shortcomings had been
corrected by now.
4. The Government is
deprived of obtaining a
large income due to the
failure in reviewing the
lease agreement and it was
directed to submit a copy of
the agreement with the
recommendations of the
legal officer and a list of
such lands that had been
leased out to private parties.
5. The Committee was
informed that the party had
agreed to settle this amount
in installments and by then
Rs. 17 lakhs had been
recovered.
REPORT FROM THE COMMITTEE ON PUBLIC ENTERPRISES OF THEPARLIAMENT OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA______________________________________________________________________________
85
Date/Name of
the Institute
& Ministry
Major Issues & Problems
Identified
Comments & Decisions of
the COPE
October 24,
2011
Sri Lanka
Land
Reclamation
Development
Corporation
Ministry of
Defence
1. Rs. 3.1 million mobilization
advances relating to the
Beddagana Project remains
unsettled for over 5 years.
2. A cost of Rs.22,329,882/-
incurred for two projects had not
been recovered from the relevant
Pradeshiya Sabhas although
several attempts were made.
3. The Corporation had sustained a
total loss of Rs. 28 million in the
projects related to Mayura Place,
Tewatte and Bere Lake.
4. According to the present Act, the
provisions available to stop
filling of lands are limited.
5. In a situation where there is an
amount of Rs.9,964,782 due
from the Land Reclamation and
Development company, another
advance of Rs. 2,054,249 had
been paid to the same company
to start another project.
1. It was informed that the
Corporation has written to
the Judicial Services
Commission in this regard.
2. The said amount had been
written off from the 2010
accounts.
3. It was revealed that the
Mayura place construction
project had been abandoned
due to lack of funds and the
Tewatta Project had
brought a loss due to the
changes made on the
original plan. The loss
related to the Bere Lake
project is due to the non
settlement of payments by
the Ports Authority for the
additional work carried out.
4. It is recommended to amend
the Act to get the necessary
authority.
5. It was informed that the
Corporation had taken
action to recover this
amount.
October 24,
2011
Lanka
Logistics Ltd.
Ministry of
Defence
1. The Annual reports are not tabled
by the company in Parliament
and the CAO stated that they are
not expected to do so other than
sending to the Treasury.
2. There is a recoverable amount of
Rs.1,219 million from armed
forces.
1. It was directed to table the
annual reports in
Parliament.
2. Requests had been made to
settle the dues.
PARLIAMENTARY SERIES NO. 119
______________________________________________________________________________
86
Date/Name of
the Institute
& Ministry
Major Issues & Problems
Identified
Comments & Decisions of
the COPE
October 24,
2011
Urban
Development
Authority
Ministry of
Defence
Contd..
1. Annual reports for the period
from 2007-2010 had not been
tabled.
2. The ongoing 65000 housing units
project in the Colombo city had
not been included in the
Corporate plan for the period
2008-2012.
3. An excess staff was observed in
some grades whereas vacancies
in some grades.
4. The accumulated loss as at the
end of 2007 is
Rs.1,110,213,520/-
5. Public tenders had not been
called for the sale of houses at
Dematagoda Housing Scheme
and the capability of the
recipients for payment has not
been ascertained and as such, a
sum of Rs.80,496,000/- was due
from recipients.
6. A sum of Rs.8,909,035/- had
been due from 24 lessees of the
old world market shell.
7. An un-recovered rent income
amounting to Rs.615,775,883
are due from the Colombo
Central Super Market Complex.
1. It was directed to take early
action to table them before
the commencement of the
budget.
2. It was agreed to submit a
revised corporate plan
including this project as
well.
3. It was directed to revise the
carder paying the attention
to the salaries of the
professionals when the
carder is revised by the
Dept. of Management
Services.
4. The Committee was
informed that this amount
had come down to Rs.143
million in 2010 after
recovering the receivables.
5. The recipients had been
selected by a Committee
appointed by the Ministry
in addition to the displaced
people and according to the
CAO, the recovery has
been delayed due to the
delay caused in issuing
deeds.
6. It was stated that action has
been taken to recover the
outstanding amounts.
7. It was directed to take
action to recover the
amount that could be
recovered and, with the
necessary approval, to write
off the rest.
REPORT FROM THE COMMITTEE ON PUBLIC ENTERPRISES OF THEPARLIAMENT OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA______________________________________________________________________________
87
Date/Name of
the Institute
& Ministry
Major Issues & Problems
Identified
Comments & Decisions of
the COPE
Urban
Development
Authority
8. 43.9 perches had been sold by
the Sri Lanka Land Reclamation
and Development Corporation
without obtaining the approval
of the UDA.
8. A detailed report was called
in.
October 25,
2011
Southern
Development
Authority
Ministry of
Economic
Development
Contd...
1. There was an outstanding sum of
Rs. 36.4 million recoverable
from an Australian company ,but
due to a time bar , it stays
unrecoverable to date .
2. As per the minutes of the
previous COPE meeting, a sum
of Rs. 6,694,450/- had been paid
as salaries to 10 employees
released to the Ministry of
Nation Building & Estate
Infrastructure.
3. The Kirala Kela project which
consumed Rs.7,113,104/- had
been a fruitless project.
4. Although, Rs.13,607,115/- had
been deposited with different
divisional secretaries for
acquisition of lands, no effective
action has been taken even upto
2010.
5. The Kohila Vagura Project in the
Karandeniya electorate had been
abandoned after spending Rs.
5,627,923/-
1. This transaction is in
contrary to the objectives of
the authority and it was
directed to submit a
detailed report including
the persons responsible in
taking a decision to operate
a television network and to
submit the final report of
the Bribery & Corruption
Commission given with
regard to Mr. Ruwan
Kasiwatte, the director who
was in charge of the
project..
2. It was directed to write to
the Ministry and get this
amount reimbursed.
3. All the persons, contributed
to take this collective
decision must be penalized.
4. It was directed to submit a
report on the acquisition of
lands.
5. Such a situation had arisen
as the Authority is acting in
contrary to its objectives.
PARLIAMENTARY SERIES NO. 119
______________________________________________________________________________
88
Date/Name of
the Institute
& Ministry
Major Issues & Problems
Identified
Comments & Decisions of
the COPE
Southern
Development
Authority
6. The expenditure of Rs.
10,539,989 incurred due to land
acquisition, had become fruitless
as the planned projects had not
been implemented yet.
7. A sum of Rs.450,725/- had been
paid to the former Coordinator
even after he had left office.
8. No dividends had been received
for the amount of Rs.43.888
million invested in the Venture
capital.
6. It was informed that the
legal action had been taken
against the Ministry of
Fisheries and the Laugh
Gas company responsible
for the non-implementation
of the projects.
7. It was directed to recover
the amount from the
Coordinator and to report to
the Committee.
8. It was directed to submit a
detailed report of this
company including the
current monetary position.
October 25,
2011
Samurdhi
Authority
Ministry of
Economic
Development
Contd...
1. There is a large number of
vacancies.
2. In the Fruit Export Project at
Galgamuwa, Rs.4.7 million
cheque had been written in
favour of a particular person’s
name, without writing it to the
name of the institution.
3. A loss of Rs.164 million had
been incurred by a leasing
programme where an agreement
had not been entered into with
the leasing company with regard
to the leasing amounting to
Rs.230 million.
4. A sum of Rs.4,005,000/- had
been defrauded by 19 members
of the staff of the Samurdhi
Bank, Nuwara Eliya by
recording as payments made to
the beneficiaries.
5. The Wellawaya Samurdhi Maha
Samgam had invested
Rs.2,200,000/- in the Pramukha
Bank which could not be
recovered and a sum of
1. It was directed to do an
assessment before filling
the vacancies.
2. It was directed to hold an
internal inquiry against the
persons involved in this
matter and report it to the
Committee.
3. The Director board should
be made responsible for this
issue and directed to what
action could be taken
against the Board of
Directors.
4. These type of
shortcomings had resulted
due to the fact that the
internal audit was not
strong enough.
5. It was directed not to allow
any Maha Samgam to
invest money in any Bank
without obtaining the
approval of the Director
REPORT FROM THE COMMITTEE ON PUBLIC ENTERPRISES OF THEPARLIAMENT OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA______________________________________________________________________________
89
Date/Name of
the Institute
& Ministry
Major Issues & Problems
Identified
Comments & Decisions of
the COPE
Samurdhi
Authority
Rs.14,785,000/- had been
defrauded by producing
fictitious fixed deposit
certificates.
6. A sum of Rs.3,789,500/- had
been obtained as loans by 23
officers of the Padiyapelella
Banku Sangam by introducing
fictitious names.
Board.
6. The matter had been
referred to the CID and it
was directed to submit a
report on this.
October 28,
2011
Wayamba
University
Ministry of
Higher
Education
1. Some resources owned by the
University had been idling for
certain period of time.
2. University had not credited
money received for various
courses to the University Fund in
terms of the University Act.
3. The salaries and allowances had
been paid to the academic staff
without confirming the
attendance.
4. The recoverable amount due to
breach of agreement by a
lecturer who had not returned to
work after the completion of
studies had been Rs.3,193,898/-
1. It was directed to submit
explanations for all such
resources.
2. It was directed to take
action to correct the matter.
3. It was directed to see that
the academics sign the
arrival and departure
properly.
4. After deducting from the
gratuity and provident fund,
there is a balance of Rs.3
million where the
university had come to
compromise to recover it in
installments.
October 28,
2011
Post
Graduate
Institute of
Pali &
Buddhist
Ministry of
Higher
Education
Contd..
1. The Corporate plan prepared for
the period 2010-2015, contains
number of short comings.
2. Since the inception in1975, the
institute has been functioning in
a rented building and Rs. 40
million had been paid as rent
from the year 1994 up to now.
The annual rent of the present
place is Rs.4,500,000/-.
1. It was directed to revise the
plan.
2. It was informed that the
institute is in the process of
finding a suitable place to
build the institution.
PARLIAMENTARY SERIES NO. 119
______________________________________________________________________________
90
Date/Name of
the Institute
& Ministry
Major Issues & Problems
Identified
Comments & Decisions of
the COPE
Post
Graduate
Institute of
Pali &
Buddhist
3. It was mentioned that the
institute has only two old vehicles
and that it is intended to purchase a
van and a car with the money
invested for that purpose.
3. The Committee
recommended the decision.
October 31,
2011
National
Savings Bank
Ministry of
Finance &
Planning
Contd..
1. In comparison to year 2009, the
interest income in 2010 had
decreased by Rs.903,966,000/-
2. The contribution to the
consolidated fund, which had
been 94% in 2008, had reduced
to 49% by 2010.
3.The Branch at Chatham street had
been vested in the Government
due to security reasons and the
amount receivable as per the cost
of the land amounting to
Rs.34,600,000 is yet to be
received.
4. The fraudulent cash withdrawls
as at 31.12.2010 amounted to
Rs. 19,836,607/- and adequate
action has not been taken.
5. The External Security Service
had been selected at a cost of
Rs.45 million without following
procurement guidelines.
6. Three loans amounting to Rs.12
million had been granted to a
customer against a mortgaged
property which had been valued
in three instances differently out
1. The reason for the decrease
had been due to the
investments made in
treasury bills or Treasury
Bonds as per the Act.
2. It was due to a policy
decision taken with the
Treasury.
3. It was stated that the Bank
is expecting that the
compensation would be
received by the
Government.
4. It was directed to submit a
detailed report on this.
5. The tenders had been called
under limited number of
quotations as some of the
suppliers were omitted on
the instructions of the
Ministry of Defence.
6. It was directed to acquire
the land immediately.
REPORT FROM THE COMMITTEE ON PUBLIC ENTERPRISES OF THEPARLIAMENT OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA______________________________________________________________________________
91
Date/Name of
the Institute
& Ministry
Major Issues & Problems
Identified
Comments & Decisions of
the COPE
National
Savings Bank
of which the first valuation was
claimed to be very high
according to the provincial
valuer. But the bank had
neglected the opinion of the
valuer.
7. Rs.2,351,520/- had been paid as
rent for building which had not
been used even upto 30.09.2009.
8. 866 Banking Assistants had been
recruited without conducting
examinations.
7. According to the CAO/AO,
the bank had planned to
construct a building in the
head office premises and as
a result, some officers were
to shift to the said building.
But this move had got
delayed due to the delay
experienced in the
construction work.
8. It was stated that they were
recruited as per the scheme
of recruitments.
October 31,
2011
Lankaputhra
Development
Bank
Ministry of
Finance &
Planning
Contd...
1. Annual reports for the years of
2009 and 2010 had not been
tabled.
2. The Bank doesn’t have a full
time internal auditor.
3. The Corporate plan contains
number of shortcomings.
4. The opinion given on the
accounts by the Auditors is
unqualified.
5. Out of the total portfolio of
Rs.2.3 billion, the non
performing loans had been
Rs.1.3 billion and the current
ratio had been 55% .
6. It can not be satisfied with the way
the Bank had rescheduled some of
the loans given to customers and
also on the action taken to recover
the loans.
1. The Committee directed to
table the reports as early as
possible.
2. It was directed to discuss
with the Treasury and take
early action to fill the
vacancies of the major
positions.
3. It was directed to revise the
Corporate plan.
4. It was directed to submit the
management letter of given
by the auditors.
5. The Committee was
informed that most of the
loans are now being settled.
6. It was directed to submit a
detailed report on these
outstanding.
PARLIAMENTARY SERIES NO. 119
______________________________________________________________________________
92
Date/Name of
the Institute
& Ministry
Major Issues & Problems
Identified
Comments & Decisions of
the COPE
Lankaputhra
Development
Bank
i) Bettons Group of Companies – Rs.
300 million
ii) Eksath Dheewara Udana Thrift &
Credit Co-op Society – Rs. 75
million
iii) Torana Music Distributors Ltd. –
Rs. 21 million
iv) Nandana Auto Products (Pvt) Ltd.
– Rs. 42 million
7. By the 2007 budget, Rs. 1000
million had been allocated for
re-structuring the garment
factories and the recovery of the
loans granted out of this
provision is not satisfactory.
7. It was directed to submit a
report including the amount
obtained by the Budget,
number of factories obtained
this facility, no of factories
which had been restructured
and the number of factories
which had not settled the
loans.
October 31,
2011
University of
Sabaragamu
wa
Ministry of
Higher
Education
Contd..
1. Key positions such as Registrar
and Bursar remain vacant and no
qualified applicant had been
found although it was advertised
4 times.
2. A lady officer serving in the post
of Computer Data Processing
Operator in the University has
submitted a bogus educational
certificate, but action has not
been taken against her.
3. A senior lecturer who had been
treated as a person vacated the post
in the University of Peradeniya has
been recruited as a senior lecturer,
contrary to the University
Establishment Code.
4. A sum of Rs. 139,000 had been paid
in favour of a certain employee of
the University in their personal
names for hiring 03 buses to
participate in the Annual general
Meeting, of their Trade Union. But
it had been confirmed that these
buses were engaged in their normal
duties.
1. It was directed to make the
place more attractive so that
more people may apply.
2. It was informed that the
Police investigation is
underway and the
Committee directed to
submit a report within one
month after the inquiry at
the University level
3. It was directed to inform the
persons concerned, about
the unlawful action and not
to follow that in the future.
4. The Committee directed
to take early action against
this person and report back
to the Committee within
one month
REPORT FROM THE COMMITTEE ON PUBLIC ENTERPRISES OF THEPARLIAMENT OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA______________________________________________________________________________
93
Date/Name of
the Institute
& Ministry
Major Issues & Problems
Identified
Comments & Decisions of
the COPE
University of
Sabaragamu
wa
5. Four camping tents had been
purchased at a cost of
Rs.780,000/- for the Dept. of
Tourist Management but these
tents had been impossible to be
used due to the fact that the
ground sheets had not been
supplied. Tents had been utilized
spreading polythene sheets.
5. It was directed to inform the
Company that the matter is
treated as finalized and that
the retention money of 20 %
will be retained.
November
14, 2011
Road
Development
Authority &
Maga
Neguma
Companies
Ministry of
Ports &
Highways
1. The companies had claimed that
they do not come under the
purview of the COPE and as
such, they are not supposed to
come for the examinations.
Further, there was an ambiguity
as to whether the Maga Neguma
companies were established
purely as per a cabinet decision.
2. It was stated that the Maga
Neguma Companies are given
projects without tenders only for
work in urgent nature and that it
does not exceed 5% of the total
provision received from the
Government.
3. There were 89 vacancies in the
carde of Engineers at the end of
2010.
4. The deficit in the financial
statement of the Authority has
amounted to Rs.7 billion.
1. However, except, Maga
Neguma Road Construction
& Development Company ,
the other two companies
had been present and the
matter related to the
formation of the companies
was kept open to be
discussed. The CAO was
also directed to clarify the
legal position on these three
companies within three
weeks.
2. The Committee directed to
submit a report on how
much was given to the
Maga Neguma companies
and other outside
companies with or without
tenders.
3. The Committee was
informed that , due to poor
salaries paid , it is difficult
to retain the engineers.
4. This has happened as the
RDA does more work
exceeding the provisions
received from the Treasury.
PARLIAMENTARY SERIES NO. 119
______________________________________________________________________________
94
Date/Name of
the Institute
& Ministry
Major Issues & Problems
Identified
Comments & Decisions of
the COPE
November
15, 2011
Telecommuni
cation
Regulatory
Commission
Presidential
Secretariat
1. A contract has been awarded to
a private company at a cost of
Rs.22.2 million only to prepare
the Corporate Plan which is
behind quality.
2. Only one Audit and
Management Committee
meeting had been held for the
year 2010 and one for the year
2011 up to September.
3. The Development of
Telecommunication Tax
amounted to Rs.6,672 million
had been under paid by Sri
Lanka Telecom during the
period from 03 March 2003 to
31 December 2010.
4. The total debtor balance as at
the end of the year is
Rs.3,154,106,357/- where a
balance of Rs.254,714,539/-
had been remaining for the
period ranging from 02 to 19
years.
5. A vehicle valued at
Rs.7,304,348/- belonging to
TRC had been released to the
Ministry of Posts and
Telecommunication in the year
2005.
6. Discussed the difficulties in
retaining the skilled staff due to
poor salary scales.
1. Bribery & Corruption
Commission had informed
that the investigations could
not be carried out further
and the case is still under
the investigations of the
CID.
2. Being a large scale
institution, it should be held
at least 4 times a year.
3. According to the CAO, Sri
Lanka Telecom pays
only1/3 of the above Tax to
the TRC and accordingly,
Rs.995 million had been
received so far.
4. Non payments for the
frequencies used by
various institutions had
been the prominent reason
and it was stated that the
institute does not expect to
take action regarding the
national institutions.
5. Requests had been made to
get the vehicle back.
6. The Committee
emphasized the
requirement of
professional staff in TRC
& was of the view that to
facilitate such
requirements professional
training needs to be given.
REPORT FROM THE COMMITTEE ON PUBLIC ENTERPRISES OF THEPARLIAMENT OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA______________________________________________________________________________
Appendix C
PARLIAMENTARY SERIES NO. 119
______________________________________________________________________________
95
Appendix C
Major issues and Problems Discussed at the meetings of Sub Committee I (Finance) of
Committee on Public Enterprises
Date/Name of
Institution and
Ministry
Major Issues and Problems
Discussed
Comments by the COPE and Decisions
Sep. 13th 2010
Institute of Policy
Studies
(Ministry of
Technology &
Research)
1. The Corporate Plan has not been
prepared according to the guidelines
provided in the Public Enterprises
Circular.
2. Treasury approval has not been
obtained for the Operating Manual.
3. Audit Committee has not been
appointed
4. Receivables from two employees
released from the Institution had not
been recovered.
5. A foreign grant had been obtained
directly to the institution violating
the State Accounts Circular No.
30/94 of 20.04.1994.
6. Bonus had been paid to the staff
without obtaining the prior approval
from the relevant authorities.
1. All specified items in the Circular should
be included when preparing the Corporate
Plan.
2. As the Institution had already submitted it
to the Treasury, immediate intervention of
Treasury is needed.
3. As the treasury representative has not been
nominated, it is required to appoint treasury
representative very soon.
4. As the two officers had been released to the
treasury, this amount should be reimbursed
from the Treasury.
5. As the foreign grants should channel
through the Department of External
Resources, this should be regularized.
6. Approval of the Cabinet of Ministers,
Ministry of Public Administration/ Treasury
needs to be taken as per the Public
Enterprises Circular No. 95 of June 1994.
Sep. 14th 2010
Local Loans &
Development Fund
(Ministry of Finance &
Planning)
1. Vacancies exist without being filled
for considerable period of time in
the Institution.
2. Loans that had been granted for the
Projects in Certain Local Authorities
had not been recovered.
3. Provision for bad debts had not been
made when preparing accounts.
1. The process of getting approval of
the Salaries and Cadre Commission
needs to be expedited.
2. Feasibility study should be done for each
project and should follow the guidelines of
the Institution providing grants.
3.It is required to keep a certain percentage as
provision for bad debts
in future.
REPORT FROM THE COMMITTEE ON PUBLIC ENTERPRISES OF THEPARLIAMENT OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA______________________________________________________________________________
96
Date/Name of
Institution and
Ministry
Major Issues and Problems
Discussed
Comments by the COPE and Decisions
Sep. 16th 2010
Superior Courts
Complex Board of
Management
(Ministry of Justice)
1. Loans receivable from other
Institutions had not been recovered.
2. Quarters had been provided to the
officers on rent free basis without
obtaining the prior approval.
3. Recurrent expenditure had been
increased as the cost per employee
had gone up due to salary increases
and calculation of gratuity based on
the last salary drawn by employees.
1. Board of Directors has the authority to
take a decision to accommodate the
offices under the Ministry without a rent
and take actions to recover dues from
other institutions.
2. Approval of the Ministry of Public
Administration and the Treasury need to
be taken.
3. A gratuity plan need to be prepared
and discuss with the Treasury to have
separate provision for gratuity payments.
Sep. 16th 2010
Sri Lanka Export
Development Board
(Ministry of Industries
& Commerce)
1. A report has not been submitted as
per the directives given in the
previous Committee meeting
regarding the expenditure incurred in
“Rajarata Expo” Exhibition.
2. Rent has not been received from the
Trade Stalls operated in Chennai,
India.
3. Lack of performances observed as
several projects and activities had not
been carried –out as planned.
1. A report should be submitted with
necessary details within 2 weeks.
2. The CAO/AO agreed to take action to
recover the dues from Bank Guarantees,
where receivables could not be recovered.
3. The CAO/AO agreed to submit a report
regarding these shortcomings.
PARLIAMENTARY SERIES NO. 119
______________________________________________________________________________
97
Date/Name of
Institution and
Ministry
Major Issues and Problems
Discussed
Comments by the COPE and Decisions
Sep. 16th 2010
Sri Lanka Convention
Bureau
(Ministry of Economic
Development)
1. Expected performance has not been
achieved during the year 2009.
2. There had been an un -reconciled
amount of Rs 19 million in the year
2009.
3. Money has been invested in the call
deposit without being obtained the
concurrence of the Minister of
Finance.
4. Incorrect accounting procedure has
been practiced in preparing of P & L
account.
1. As figures reflected the low performances the
reports should be updated with actual
figures.
2. A report should be submitted with all
categories within two weeks’ time.
3.Process of obtaining the Treasury approval to
keep the deposit should be expedited.
4. This should be rectified in preparing
accounts from next year onwards.
Sep. 17th 2010
Securities &
Exchange
Commission of Sri
Lanka
(Ministry of Finance &
Planning)
1. Three officers who had visited India
on official matter had not submitted
the reports.
2. A sum of Rs. 7.6 million has been
incurred to pay bonus for the staff
without paying attention to Treasury
Circulars.
3. Vehicle leasing facilities have been
provided for the higher positions of
the commission on contributory
basis.
4. Huge amount of Rs. 25,922,288/- has
been incurred as rental for the office
building and car parking fees.
5. Some reports necessary for auditing
has not been provided for Auditor
General’s Department by the Internal
Auditors.
1. The CAO/AO agreed to submit the reports
as per the Circular issued by the Ministry of
Finance & Planning.
2. Treasury circulars need to be followed and
covering approval should be obtained for
this.
3. The CAO/AO agreed to re-think about the
system and report to the Committee
regarding the action taken and employees
share made in respect of this.
4. It is recommended that having their own
office building and parking area would be a
better solution.
5. The CAO/AO agreed to take immediate
action to forward the said documents after
receiving the list of required documents
from the Auditor General’s Department.
REPORT FROM THE COMMITTEE ON PUBLIC ENTERPRISES OF THEPARLIAMENT OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA______________________________________________________________________________
98
Date/Name of
Institution and
Ministry
Major Issues and Problems
Discussed
Comments by the COPE and Decisions
Sep. 17th 2010
Tower Hall Theater
Foundation
(Ministry of National
Heritage & Cultural
Affairs)
1. The Corporate Plan for the Year
2007-2011 and Action Plan has
been prepared, but not updated.
2. Staff has been recruited in excess to
the approved cadre.
3. Annual Reports for the years of 2006
and 2008 has not been presented to
the Parliament.
4. An Accountant who was under
interdiction for 2002-2005, and was
on compulsory leave since March
2009 had been paid salaries.
5. Internal construction and the
consultancy services have been
carried out in contrary to the
objectives of the Institution.
6. 10% allowance of the profit has been
paid to the Project Manager, who
also in charge of the contract,
without prior approval from the
Treasury.
7. The commemoration Ceremony had
not been held of the late
Mr. Ranasinghe Premadasa, the
founder of the Tower Hall Theater on
01st May.
8. Consultancy services had been
provided by the institution for the
programmes in a Building located in
the ‘Race Course’ which is owned by
the Western Provincial Council.
1. It is recommended to update Corporate Plan
and Action Plan as a rolling plan.
2. As the new recruitment scheme has been
already submitted for Treasury approval,
regularization process should be done soon.
3. Annual reports need to be presented to the
Parliament very early.
4. Since the preliminary inquiry has not been
conducted within three months the Labour
Tribunal has directed to do the payments.
Therefore preliminary inquiry should be
conducted without further delay.
5. The institution should confine its activities
to the objectives laid down at the time of
establishment.
6. The Treasury was directed to look into the
matter.
7. It is recommended to hold the
Commemoration Ceremony in a suitable
manner.
8. Action should be taken to obtain the
ownership of the building in consultation
with the Hon. Prime Minister & the Western
Provincial Council.
PARLIAMENTARY SERIES NO. 119
______________________________________________________________________________
99
Date/Name of
Institution and
Ministry
Major Issues and Problems
Discussed
Comments by the COPE and Decisions
Sep. 17th 2010
Sri Lanka Institute of
Local Governance
(Ministry of Local
Government &
Provincial Councils)
1. Annual Reports have not been
presented to the Parliament since
2005.
2. Three members have not been
appointed to the Governing Council.
3. There was a delay in conducting
Audit and Management Committee
meetings.
4. Due to delay in construction, the land
owned by the UDA had been sold to
another party by the UDA, which
was initially agreed to purchase by
this institution at Rs. 15 million. As
cancellation fee of the contract
entered in to, the UDA had charged
Rs. 1.3 million and the balance had
been invested in fixed deposits
without obtaining the required
approval.
5. Stock of books which are not relevant
to the Provincial Councils has been
purchased incurring a considerable
cost.
6. There were shortcomings in
preparing estimates for the training
courses and as such expenditures
were not compatible with the
allocations made.
1. The CAO/AO agreed to submit 2009 Annual
Report to the Parliament within two weeks’
time. Annual Reports from 2005-2008
should also be sent to the COPE within a
week. Procedures should be followed to
table all the reports to the Parliament.
2. It is required to get those members
nominated very soon with the consultation
of the Hon. Minister.
3. The CAO/AO agreed to hold the Audit and
Management Committee meetings without
further delay.
4. The immediate action is needed to
regularize the situation.
5. Action should be taken to donate the books
to libraries of the Local government
Institutions after valuation and Action
Taken Report should be submitted to the
Committee. The CAO/AO agreed that
approval of the Governing Council would
be obtained to purchase books in future.
6. More attention should be paid to include real
estimates for the programmes in preparing
Corporate Plan.
REPORT FROM THE COMMITTEE ON PUBLIC ENTERPRISES OF THEPARLIAMENT OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA______________________________________________________________________________
100
Date/Name of
Institution and
Ministry
Major Issues and Problems
Discussed
Comments by the COPE and Decisions
Sep. 21st 2010
Sri Lanka Accounting
& Auditing Standards
Monitoring Board
(Ministry of Finance &
Planning)
1. Appointment of Board members had
been delayed and Board meetings
have not been held in time.
2. Internal Audit has not been carried
out either by the Institute or Internal
Audit Division of the Ministry.
3. Corporate plan has not been prepared
according to the guidelines provided
in the Public Enterprises Circular.
4. Low level of performances has been
observed in relation to the reviewing
of annual reports of the institutions.
5. Actions have not been taken
against the institutions that have
not provided annual financial
statements to the AG’s
Department.
6. A representative of Sri Lanka
Chartered Accountants expressed the
willingness of their members to chair
the Audit Committees of
Government institutions.
1. Early action is needed to appoint all
members for the Board and to conduct
Board meetings.
2. It is recommended to carry out Internal
Audit functions through the Internal Audit
Division of the Ministry.
3.The CAO/AO agreed to submit the revised
Corporate Plan after finalizing.
4.The Committee emphasized the necessity of
continuous reporting of the activities of the
large institutions to the COPE and it is
agreed to seriously consider this matter in
the main COPE meeting.
5. Since there is no provision to impose a
penalty in the existing law, it is emphasized
the necessity of amending the existing law.
6. The view has been appreciated by the
Committee and agreed to give directives to
the Treasury after being discussed in the
Main Committee.
Dec. 08th 2010
Udarata Development
Authority
(Ministry of Economic
Development)
Contd.
1. Corporate Plan has not been updated
and Action Plan has not been
prepared based on the Corporate
Plan.
2. Annual Report for the year 2009 has
not been presented in the Parliament.
1. It is recommended to include Projects
connected with the “Gama Naguma” in the
new Corporate Plans and Action Plans to
avoid implementation of programmes in
haphazard manner.
2. The CAO/AO agreed to take early action to
present the Annual Report for the year 2009.
PARLIAMENTARY SERIES NO. 119
______________________________________________________________________________
101
Date/Name of
Institution and
Ministry
Major Issues and Problems
Discussed
Comments by the COPE and Decisions
Udarata Development
Authority
Contd.
3. Some of the vehicles belonging to
the Authority have not been
registered under the name of the
Authority.
4. A payment of Rs. 2.5 million has
been made for the earth work
connected with the construction of
Ambuluwawa Concrete Road, which
has been covered under another
contract.
5. The Committee seriously enquired
the following failed projects in
which a lot of malpractices had
been occurred.
i. AmbuluwawaGanetanna Road
construction
ii. Hakurutale, Hanguranketha soap
production project
iii. Construction of marketing and
information centre at Badulla
iv. Construction of two water tanks at
Dankanda-Dambagolla
v. Collapse of construction wall at
children’s park, Pilimatalawa.
vi. Construction work of Kathapallana
anicut abandoned halfway.
vii. A retired officer earning two
salaries working in two
government institutions.
viii. Loss of Rs. 1.3 million due to
overpayment in purchasing roofing
sheets, not compatible with the
specifications required.
3. As these vehicles belong to the Ministry the
CAO agreed to look into the matter and
report to the Committee within two weeks.
4. It was directed to carry out an inquiry
regarding this and report to the Committee
within one month.
5. The Committee directed the CAO/AO to
send detailed explanation to the Committee
regarding these matters.
REPORT FROM THE COMMITTEE ON PUBLIC ENTERPRISES OF THEPARLIAMENT OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA______________________________________________________________________________
102
Date/Name of
Institution and
Ministry
Major Issues and Problems
Discussed
Comments by the COPE and Decisions
Udarata Development
Authority
ix. Providing mobile phones to the
officers on contract basis resulting
a recoverable amount of Rs. 39,
478/- from 4 terminated officers.
x.Opening of a bank account without
obtaining approval from treasury in
which balance was Rs. 47 million.
Dec. 08th 2010
Sri Lanka Tourism
Promotion Bureau
(Ministry of Economic
Development)
Contd.
1. A difference between the VAT
refund receivables and Tax return
amounts in the accounts of the
Bureau has been observed.
2. Differences in the accounts of
SLTPB and Sri Lanka Tourism
Development Authority (SLTDA)
has not been reconciled.
3. Foreign and local advances given to
officers have not been recovered.
4. A huge sum of money incurred in
Hikkaduwa Beach Festival has not
been recovered from the respective
sponsors.
5. A project named Small Miracle
Branding Programme has been
abandoned after spending huge sum
of money.
1. The Committee pointed out that the amounts
should be claimed within the stipulated time
period. The written confirmation from the
Department of Inland Revenue need to be
taken and should send copies to the
Committee and the Auditor General.
2. As the CAO stated that the accounts has
been adjusted and books have been then
reconciled, the Committee needed an
explanation as to how this adjustment has
been made.
3. Since it is mentioned that 80% has already
been recovered, immediate steps should be
taken to recover the balance.
4. As it is explained that the amount is not a
due from any party, but the difference
between income and expenditure,
particulars with regard to the income and
expenditure for each year of the said project
need to be sent for the reference of the
Committee. The amounts should be written
off from the accounts with the approval of
Treasury and the Director Board
5. Further explanation regarding this should be
submitted to the Committee within two
days.
PARLIAMENTARY SERIES NO. 119
______________________________________________________________________________
103
Date/Name of
Institution and
Ministry
Major Issues and Problems
Discussed
Comments by the COPE and Decisions
Sri Lanka Tourism
Promotion Bureau
6. It has been observed that huge sum of
money has been spent in IFFA film
festival.
6. Complete report should be submitted to the
Committee soon after the internal audit has
been completed.
Dec. 09th 2010
Industrial
Development Board
(Ministry of Traditional
Industries and Small
Enterprise
Development)
Contd.
1. Post of Finance Manager has been
filled without following the correct
procedure.
2. Annual Reports have not been tabled
to the Parliament in time.
3. Number of audit queries has been
unattended to over the years.
4. A Generator purchased to the Board
has been sold out without being used
incurring a lost.
5. It is observed that electrical power
potter wheels have not been
distributed properly among members
of a co-operative society.
6. Neither the money nor the materials
has been received from the Sri Lanka
Customs and Handicrafts Board after
payment is being made.
7. Lack of evidence to ensure the
receipt of cash in transactions made
with large scale industrialists is
observed.
8. Proper reconciliation has not been
done in relation to seven bank
accounts.
1. The post should be re-advertised and fill the
vacancy according to the correct
procedures. It is recommended to fill all the
vacancies existing and report back to the
Committee within two months.
2. Prompt action should be taken to present the
Annual reports to the Parliament.
3. Adequate attention should be paid by the
Institution to answer audit queries without
delay in the future and Internal Auditor of
the Ministry should look into this matter.
4. Detailed report should be submitted to the
Committee regarding this within two
months.
5. The CAO/AO agreed to submit a report
within two weeks after distributing them
among eligible members.
6. A report should be submitted to the
Committee regarding the outstanding
balances within one month.
7. It is required to send explanations to the
Committee.
8. As the explanation given has been rejected
by the Committee the CAO/AO agreed to
reconcile them when preparing final
accounts for the year 2010.
REPORT FROM THE COMMITTEE ON PUBLIC ENTERPRISES OF THEPARLIAMENT OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA______________________________________________________________________________
104
Date/Name of
Institution and
Ministry
Major Issues and Problems
Discussed
Comments by the COPE and Decisions
Industrial
Development Board
9. The Institute has being running at a
loss over the years and explanations
given with respect to the Auditor
Generals observations were not
satisfactory.
9. Serious concern should be paid to minimize
the loss and detailed report regarding the
audit observations should be submitted after
calling the explanations for each and every
query from the relevant parties.
Dec. 09th 2010
Insurance Board of
Sri Lanka
(Ministry of Finance &
Planning)
1. The Corporate Plan for the period
of 2008-2010 had not been
prepared as per the guidelines of
the Public Enterprises Circular.
2. It is observed that the internal
Audit Reports had not been
submitted to the Auditor General.
3. The Committee noted that there
had been vacancies in the cadre
including the post of Director
General.
4. The Committee observed that
proper mechanism for third party
insurance claims does not exist.
5. The Board has violated the PED
circular No. 95 of 1984 by granting
more than one allowance per year
and paying medical expenses and
festival advances.
6. The Committee observed that the
IBSL had not been exempted from
paying income tax.
7. The deficit from operating
activities had been increased.
1. Since the new Corporate Plan for the period
of 2011- 2013 had been already drafted, the
CAO agreed to address the shortcomings
pointed out by the Committee in that
report.
2. Since it is stated that the 2009 accounts had
been drafted, the Committee directed the
CAO to submit the same after finalizing
without further delay.
3. It was stated that until the new Act being
passed recruitment had been delayed.
However the committee directed the CAO
to fill the vacancy of Director General early.
4. The CAO was directed to take early action to
streamline the mechanism.
5. The CAO agreed to obtain the Treasury
approval for all the payments.
6. The CAO was directed to discuss this with
the Treasury and get the Insurance Board
exempted from paying income tax.
7. The Committee directed the CAO to adapt a
methodology to reduce the deficit.
PARLIAMENTARY SERIES NO. 119
______________________________________________________________________________
105
Date/ Name of
Institution and
Ministry
Major Issues and Problems
Discussed
Comments by the Sub Committee and
Decisions
June 28th
2011
Rubber Research Board
(Ministry of Plantation
Industries)
1) Kumarawaththa and Narampola Estates had
reported losses during the period 2008 and
2009. Without the legal ownership of the
said lands Institute had spent more than Rs.
10 million for carrying out certain activities.
1) Losses had been incurred due to the fact that
the 02 sub stations had been set up only for
researches and experiments. CAO was
directed to take this matter into serious
consideration & submit a report within a
month regarding the action taken to transfer
the ownership of the lands.
2) The steps that had been taken to recover the
debtor balance of Rs.7.7 million as at
December 2010 was questioned and it was
revealed that out of that amount
Rs.5.2.million had been given as an advance
to the Advisory Services Department to
build up a research unit and due to a
problem regarding the transfer of deeds, it
had been unable to recover the amount.
2) Directed to submit a report within a period of
one month indicating the action taken to
acquire the land.
3) Action had not been taken to recover surety
bonds valued at Rs. 4.9 million from o4
officers.
3) Legal action had been taken and the relevant
officers had agreed to pay the dues in
installments.
4) Stock verification or Board of survey not
carried out, where sum of Rs. 12,432,856/-
had been in the accounts as closing stock.
4) The Committee was not satisfied with the
method adopted.
5) Observed an excess of expenditure over
income for last several years.
5) It was revealed that as a result of adopting
new accounting standards, a difference in the
profit had been occurred. However 41 million
profit had been obtained in the year 2009.
June 28th
2011
National Enterprise
Development Authority
(Ministry of Industry &
Commerce)
1) The Corporate Plan, Action Plan and
Annual Budget not being submitted to the
Auditor General.
1) The Committee directed the CAO/ AO to
submit all the outstanding reports to the
Auditor General.
2) Annual Reports for the years 2008 & 2009
not being tabled in Parliament.
2) Since both reports had already been sent for
printing, directed to take action to table them
in Parliament early.
3) It was noted that the Audit Report prepared
paying Rs.44,563 to a private institution had
not been submitted to the Auditor General.
3) Directed to send a copy of the Audit Report to
the Auditor General.
4) Without proper approval 4 employees had
been appointed in addition to the approved
cadre.
4) Directed to obtain approval from the Dept. of
Management Services for the excess staff.
5)Institute was continuously running at a loss 5) It was revealed that losses were due to the
accrued building rent, expansion of cadre and
extra development programmes.
REPORT FROM THE COMMITTEE ON PUBLIC ENTERPRISES OF THEPARLIAMENT OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA______________________________________________________________________________
106
Date/ Name of
Institution and
Ministry
Major Issues and Problems
Discussed
Comments by the Sub Committee and
Decisions
June 29th
2011
Resettlement Authority
(Ministry of
Resettlement)
1) The Committee queried about the tabling of
Annual Reports for the years 2008 & 2009.
1) The CAO/AO agreed to present both the
reports in Parliament within one month.
2) The Committee observed the following
shortcomings in the Authority
• Corporate Plan and Action Plan not
being prepared as per the PED
Circular No.12
• Meetings of Board of Directors not
being held regularly.
• Action not being taken to achieve the
objectives of the Authority.
2) The CAO /AO explained the difficulties in
achieving targets due to the reasons
mentioned below.
• Non availability of adequate funds
• Overlapping of functions with the other
institutions.
June 29th
2011
Rehabilitation of
Persons, Properties and
Industries Authority
(Ministry of
Rehabilitation & Prison
Reforms)
1) Annual Reports for the years 2007, 2008 and
2009 not being tabled in Parliament.
1) The Committee directed the CAO/AO to take
action to present all the outstanding reports in
Parliament.
2) The Committee noted the following
shortcomings in the Corporate Plan for the
period 2009-2013.
• SWOT analysis not being included
• Responsibilities not being assigned to
the officers
• Operating results of three preceding
years not being indicated
• The number of goals being indicated
in different numbers in the Corporate
Plan and the Action Plan
2) To prepare a revised Corporate Plan.
3) A sum of Rs.76,653,006/-granted by the
Bank of Ceylon to be given as loans to the
people affected by the 1983 riots, not being
recovered. The CAO/AO stated that most of
these beneficiaries had been self-employed
Tamil people and it had been impossible to
trace these people and their guarantors.
3) A Cabinet Paper had been submitted seeking
approval to write off this amount.
4) Action not being taken to recover the
annual interest of 1.5% of the capital
amount of Rs.128 million invested in the
National Housing Scheme where the total
amount recoverable including the interest as
at 30.06.2010 being Rs.160 million.
4) The Committee wanted the CAO/AO to
discuss this matter with Secretary to the
particular Ministry and to inform the
committee of the action taken in this regard.
5) To see whether the Resettlement Authority
could be amalgamated with the
Rehabilitation of Persons, Properties &
Industries Authority as the objectives of the
two entities are almost the same.
6) 3858 people being paid at the rate of
Rs.12,500/- in contrary to the decision taken
to pay Rs. 25,000/- to each married couple
displaced and living in camps to run a self-
employment.
6) The Committee was informed that this has
been done due to lack of enough funds and
the CAO was directed to ask for more funds
and regularize the payment.
PARLIAMENTARY SERIES NO. 119
______________________________________________________________________________
107
Date/ Name of
Institution and
Ministry
Major Issues and Problems
Discussed
Comments by the Sub Committee and
Decisions
15th
August 2011
Condominium
Management Authority
(Ministry of
Construction, Engineering
Services , Housing &
Common Amenities)
1)Annual Reports for the years
2004,2006,2007,2008 and 2009 had not been
tabled in Parliament.
1) To take early action to table all the Annual
Reports which had not been presented in
Parliament
2) The Committee noted that the objectives of
the Authority, as per the Act of incorporation
had not been included in the Corporate Plan
prepared for the period 2011 – 2015, and also
the Action Plan had not been prepared based
on the Corporate Plan.
2) Directed the CAO/AO to prepare the
Corporate Plan, and the Action Plan, as
explained, and also to submit to the
Committee along with the annual budget.
3) The Committee enquired about a sum of Rs.
500,000/- paid to an external individual,
without the approval of the Board of
Directors.
3) The CAO/AO informed that this amount had
been paid to the Ceylon Workers’ Congress on
the instructions of the former chairman.
4) Offering contracts only to a one group of
contractors in a situation, where only one
bidder had responded.
4) Weakness on the procurement system,
directed to streamline the system.
15th
August 2011
National Dangerous
Drugs Control Board
(Ministry of Defence)
1) Annual Reports for the years 2007, 2008,
2009 and 2010 not being presented in
Parliament.
1) The CAO was directed to present Annual
Reports for the years of 2007, 2008 & 2009 by
the end of September, 2011 and the 2010
Annual Report by November, 2011.
2) Several shortcomings were observed in the
Corporate Plan while, Action Plan had also
not been prepared based on the Corporate
Plan. Variances were observed in the Budget
as well.
2) Directed to prepare a fresh Corporate plan
including the Action Plan & the Annual
Budget.
3) 93 vacancies exist in the cadre. 3) The CAO was directed to recruit the required
staff after obtaining the approval for the
scheme of recruitment.
4) The Financial deficit of the Board had been
increasing.
4) The CAO was directed to take action to
overcome the situation & report back to the
Committee on action taken.
5) Un-reconciled balance amounting to Rs.
502, 438/- had been brought forward in the
accounts since the year 2005.
5) The Committee directed the CAO/AO to take
action to correct this error in the accounts.
6) Rs. 2 million advances not being settled. 6) Directed the CAO to take action to recover
the outstanding amounts.
7) Lack of supervision over the rehabilitated
personnel by the Board had been observed.
Social acceptability and the safety of them
not being secured due to shortage of
resources.
7) The CAO/AO was directed to take follow-up
action and to strengthen the staff & the
facilities to overcome the situation.
REPORT FROM THE COMMITTEE ON PUBLIC ENTERPRISES OF THEPARLIAMENT OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA______________________________________________________________________________
108
Date/ Name of
Institution and
Ministry
Major Issues and Problems
Discussed
Comments by the Sub Committee and
Decisions
15th
August 2011
Ranaviru Seva
Authority
(Ministry of Defence)
1) The Committee observed that the Ranaviru
Seva Authority had not tabled the Annual
Reports from the year 2000 in Parliament.
1) The Committee directed the CAO/AO to table
the Annual Reports from 2005 – 2010 within
a month’s time in Parliament, and to table the
annual reports from 2000- 2004, within 3
months in Parliament and an action plan be
sent within two weeks stating as to how they
clear the backlog.
2)The Committee noted that targets of the
Authority had not been included in the
Corporate Plan prepared for the period 2011
– 2015, the Action Plan had not been
prepared based on the Corporate Plan, and
the Budget too had not been included in the
Corporate Plan.
2)The Committee directed the CAO/AO to
prepare the Corporate Plan as per the guide
lines laid down in the PED Circular and to
update it annually.
3) The Committee observed that out of Rs. 15
million received as capital grant in 2009,
Rs. 10 million had been withdrawn by the
Treasury in May 2010, due to non-
utilization of funds. The CAO/AO stated
that the Authority could not utilize these
grants due to the war situation prevailed at
that time and also due to non-availability of
an Accountant to make the management
aware of such shortcoming
3) Directed to obtain instructions from the
Management Services Dept. regarding the
recruitment of an Accountant, under a
situation where the court case is pending
against the former accountant.
4) Inventories and accounts register not
maintained and board of survey had not
been carried out
4) Directed to appoint a committee to act on this
having made a work plan.
15th
August 2011
Sri Lanka Inventors
Commission
(Ministry of Technology
& Research)
1) The Committee observed that the Annual
Reports for 2008 & 2009 had not been
tabled in Parliament.
1) Directed to table these reports in Parliament
once the cabinet approval would be granted.
2) Out of 51, 43 audit queries had not been
answered for the period 2005-2010. The
Committee seriously considered this
position.
2) Directed to take action to respond the audit
queries within a month.
16th
August 2011
Janatha Fertilizer
Enterprise Limited
(Ministry of Agrarian
Services & Wild Life)
Contd.
1) The Committee enquired the current position
of the Institute.
1) The major business activity of the company at
the moment had been to purchase organic
fertilizer from private producers and
distribute them throughout the country. He
further stated that around 150 to 200 Met.
Tons of fertilizer is purchased and distributed
per month which can be increased upto 2000
to 3000 Met. Tons.
2)The Committee noted that the Institute had
been running at a loss and for the year 2010,
the expenditure had been around Rs.17
million whereas the income generated by
selling of fertilizer had been Rs. 3,83,735 .
2) The Chairman requested the Committee that
he be given a period of time to show a
progress.
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Date/ Name of
Institution and
Ministry
Major Issues and Problems
Discussed
Comments by the Sub Committee and
Decisions
Janatha Fertilizer
Enterprise Limited
3) i. Observed that, Institute had managed to
meet operational expenses from the
income raised by leasing out of
warehouses.
ii. At this point, the chairman of the Janatha
Fertilizer Enterprise Ltd. requested that he
be given some more time to show a
progress owing to the fact that he had taken
some steps to get assistance from the
World Vision and the Food and
Agriculture Organization to strengthen this
company.
3) i. The Committee
Emphasized the existence of the Institute is
doubtful with the current market
challenges, as the Institute had been
experiencing an unfavourable financial
position and also considered the fact the
decision had been taken by the Cabinet in
November 2008 to amalgamate Janatha
Fertilizer Enterprise Ltd. with the Ceylon
Fertilizer Co. so far not implemented.
Committee directed to implement the
Cabinet decision or if not at least keep the
cabinet informed of the current position.
ii. It was pointed out that even if the company
gets foreign assistance which should
channel through the treasury, it is very
unlikely that it will receive green light from
the treasury on account of unsatisfactory
financial status. To submit a report to the
Committee on whatever the action taken
regarding the Cabinet decision.
4) The Committee observed the following
shortcomings in the Institute.
i. Not submitted accounts to the Auditor-
General,
ii. The Audit & Management Committee not
being appointed and meetings not being
held.
iii. Not tabling the Performance Reports in
Parliament,
iv. Not preparing the Corporate Plan as well
as the Action Plan,
v. Not adhering to the guidelines given in the
Company’s Act,
vi. Not taking action to delegate authority as
per the Treasury Circulars.
4) To take action to correct these shortcomings
within 3 months.
August 16th
2011
Sri Lanka Cement
Corporation
(Ministry of State
Resources & Enterprise
Development)
Contd.
1) The Annual Report for the year 2009 had not
been presented in Parliament.
1) Annual report is with the Ministry for
approval.
2) Internal Audit Reports had not been
submitted to the Auditor-General half
yearly.
2) The CAO/AO was directed to submit the
same very early.
3) 3 equipment valued at Rs. 5.3 million being
written off in the year 2007, without
obtaining the Treasury approval.
3) These items had now been valued according
to the market value, and would be taken into
the accounts this year.
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Date/ Name of
Institution and
Ministry
Major Issues and Problems
Discussed
Comments by the Sub Committee and
Decisions
Sri Lanka Cement
Corporation
4) Outstanding debtor balances remained over
5 years as at the end of the year 2010 had
been Rs.7.3 million.
4) Already recovered 4 million & directed to
recover the outstanding balance.
5) The Committee observed that out of a stock
of cement, 9352 cement bags purchased by
the Corporation valued at Rs. 2,094,580 had
been damaged. The CAO/AO stated that
during the war period, the Corporation had a
problem in obtaining cement through the sea
to Jaffna, and the stock of cement bags had
been damaged due to the exposure to the sea
for 92 days.
5) The Corporation had to bear up this loss.
6) Although the Cabinet had given instruction
to take action to produce cement in
Kankasanthurai, action had not been taken
to implement.
6) At present only the importation & island wide
distribution is being done due to lack of
funds.
7) Although the Corporation had sold the
Puttalam Cement Factory and leased out the
limestone depository for 50 years to the
Holcem Company, rest of the resources of
the Corporation had not been developed.
7) As per the agreement the Corporation is not
entitled to get any benefit.
8) Rs. 104 million & Rs. 15 million had been
written off in the year 2006, without the
approval of the Treasury.
8) The CAO agreed to take follow-up action
regarding the obtaining of Treasury approval.
9) The Cabinet decision taken to transfer the
assets & liabilities of the Lanka Cement
Company to Sri Lanka Cement Corporation
had not been implemented.
9) The CAO/AO was directed to transfer the
assets after amalgamation of these two
institutions.
10) 180 acres of land, owned by the
Corporation had been acquired by the
unauthorized people.
10) A complaint has been lodged in police.
August 16th
2011
Lakdiva Engineering
Company Ltd.
(Ministry of Transport)
Contd.
1) The Company had made a proposal to the
Treasury, to amalgamate Lakdiva
Engineering Company and the Sri Lanka
Transport Board.
1) Directed to take action to amalgamate
Lakdiva Enginering Company Ltd. with the
SLTB as a separate division.
2) The Committee observed the following
shortcomings in the Company.
(a) The Institution had not been constituted in
terms of the Company’s Act,
2) The Committee directed the CAO/AO to take
action to correct these shortcomings.
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Date/ Name of
Institution and
Ministry
Major Issues and Problems
Discussed
Comments by the Sub Committee and
Decisions
Lakdiva Engineering
Company Ltd.
(b) Continuous audits had not been carried out,
(c) Steps had not been taken to table the
Annual Reports for the years 2008, 2009 &
2010, in Parliament.
(d) An Internal Audit Division had not been
established,
(e) Corporate Plan, Action Plan and budgets
had not been prepared.
3) The Committee enquired the current position
with regard to the fraud that had been taken
place on 03.06.2010. The Company had to
pay Rs. 8 lakhs to the Security Services, and
that Rs. 21 million loss had been incurred to
the Company, where the Company had filed
a case against the security services to recover
the loss, and the security services had filed a
case to get Rs. 8 lakhs that the Company
owes to pay.
3) Both cases are being heard at the Ja-ela
Courts
August 16th
2011
Lanka Phosphate
Company Ltd.
(Ministry of State
Resources & Enterprise
Development)
1) Only 01 Audit & Management Committee
meeting had been held in the year 2010/2011.
1) Directed to meet once in every three
months’ time in the future.
2) The Committee observed that a sum of Rs. 7
million debtor balance had been outstanding
for over 5 years.
2) Out of 21 million of debtor balances as at
December 2009, 7 million had been
recovered by correcting the shortcomings.
3) Payments had been made without the
approval of an authorized officer.
3) Action had been taken to introduce
procedures & guidelines to overcome such
shortcomings.
September 19th
2011
Milko Pvt. Ltd.
(Ministry of Livestock &
Rural Community
Development)
1) The Committee enquired the current position
on the leakage of milk reported during the
transportation between the milk collecting
centres and the factories.
1) In the years 2005/2006 the leakage had been
1.04% and during the past two years it had
been brought down to 0.39% and further
stated that the target is to bring down this
amount to 0.25%, and that by now they
maintain a very good control between the
milk collecting centers and the factories.
2) The Committee observed that the unsettled
advances as at 31.03.2010 had been Rs.
15,271,639/-.
2) The CAO/AO stated that by now all advances
had been recovered.
REPORT FROM THE COMMITTEE ON PUBLIC ENTERPRISES OF THEPARLIAMENT OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA______________________________________________________________________________
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Date/ Name of
Institution and
Ministry
Major Issues and Problems
Discussed
Comments by the Sub Committee and
Decisions
September 19th
2011
Housing Development
Finance Corporation
(HDFC) Bank
(Ministry of Finance &
Planning)
1) Subsidiary Company named as HDFC Real
Estate Development Ltd. was running at a
loss and depended upon the financial
assistance of the HDFC Bank. The
CAO/AO stated that an attempt to demolish
72 houses built up by the said company in
Awissawella had failed as the land belonged
to the NHDA & UDA.
1) Directed to take quick action to get the title
deeds transferred and sell the houses.
2) Unidentified deposit balance of customer as
at 31.12.2010 had been Rs. 5,938,847/-. It
was stated that this amount had been
reduced to Rs. 4.5 million by now.
2) The AO agreed to take action to clear these
outstanding amounts & report back to the
Committee before the end of this year.
3) The Bank had deposited a sum of Rs. 317
million with the Central Bank to facilitate
agricultural purposes contrary to the
provision of the Act. No. 07 of 1997. The
AO stated that the Central Bank had decided
that every Bank should contribute 10% for
the agricultural purposes.
3) Directed to negotiate this matter with the
Central Bank, informing them that HDFC
had been questioned by the COPE on this
matter.
4) Five mortgaged properties had been sold
incurring a loss of Rs. 1,094,971/- to the
Bank.
4) Directed to explore the possibility of
recovering loss and if not, to write off with
proper approval.
5) The former chairman had been paid Rs.
3,694,475/- as monthly residence and other
allowance since 21.11.2000 to 31.12.2009.
5) Directed to send the report on the history of
this matter.
6) Contrary to the normal interest rate, the Bank
had agreed in advertently pay 22.1% fixed
deposit of CEB amounts to Rs. 450 Mn.
where the overpayment would be Rs.
69,391,353/-.
6) This has been an error done by the Board.
September 19th
2011
Elkaduwa Plantations
Ltd.
(Ministry of State
Resources & Enterprise
Development)
Contd.
1) Annual Reports for the years 2006 to 2009
had not been presented in Parliament.
1) Directed to take action to table them early and
to ensure tabling of Annual Reports within
prescribed period of time in future.
2) Services of the General Manager,
Accountant and the Administrative Officer
who are above 60 years, had been extended.
It was stated that the Board approval had
been obtained.
2) The Committee expressing that Board of
Directors does not have the Authority to do
so & Cabinet approval should have been
taken, directed the CAO to look into this
matter and report back to the Committee with
a copy of the approval of the Board of
Directors in this regard.
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Date/ Name of
Institution and
Ministry
Major Issues and Problems
Discussed
Comments by the Sub Committee and
Decisions
Elkaduwa Plantations
Ltd.
3) Coconut nuts had been sold in the open
market without following the tender
procedures. The AO stated that after selling
70% of the stock in public auction, the
balance had been sold in the open market.
3) The Committee mentioned that the Institution
do not have an authority to act in this manner,
and submit a report to the Committee on this
issue.
4) It was queried why the Head office of the
Alkaduwa Plantations established in
Colombo.
4) Directed to send a report as to why the head
office cannot be established in Elkaduwa.
5) The General Manager had been paid an
incentive as labour allowances.
5) The CAO was directed to look into this
matter and take action to recover the full
amount.
6) Loss of Rs. 1,179,077/- had been incurred
due to unsystematic tapping of Rubber in
the Nalanda Estate.
6) The Committee directed to take action to
overcome these management inefficiencies.
7) 8 cows had been died in 2011, where no
medical certificates had been issued by a
Veterinary Surgeon.
7) Since investigation is being conducted,
directed to send a report after completing it.
September 19th
2011
Central Engineering
Consultancy Bureau
(Ministry of Irrigation &
Water Management)
1) Financial Statements had not been prepared
in accordance with the SLAS 13 and
number of shortcomings were observed in
them.
1) Directed the CAO/AO to withdraw the
accounts for the year 2010 and take action to
furnish a corrected set of accounts to the audit
within two months’ time. And also directed
the CAO/AO to inform the Hon. Minister of
these shortcomings, and if necessary to present
a Cabinet paper to introduce appropriate
methodology.
2) There had been a debtor balance of Rs.
1,597,867,922/- .
2) Directed to see whether always certified bills
are obtained.
September 19th
2011
Kurunegala Plantations
Ltd.
(Ministry of Coconut
Development & Janatha
Estate Development)
1) A superintendent was transferred to another
section on his wrongful administration, but
he had resigned from the post before taking
any legal action. Later he had been
appointed as Coordinating officer in the
Chillaw Plantations.
1) The CAO was directed to take actions against
him and report back to the Committee,
including by whom this person had been
appointed to the present position and the
requirement of the post of coordinating officer
to the Chillaw Plantations.
2) Actual yield and the number of trees per acre
in the estates were at low levels compared to
accepted levels.
2) The CAO/AO was directed to take action to
overcome this situation.
REPORT FROM THE COMMITTEE ON PUBLIC ENTERPRISES OF THEPARLIAMENT OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA______________________________________________________________________________
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Date/ Name of
Institution and
Ministry
Major Issues and Problems
Discussed
Comments by the Sub Committee and
Decisions
November 14th
2011
SL Export Credit
Insurance Corporation
(Ministry of Finance &
Planning)
1) Internal Audit for the years 2010 & 2011
had not been done & Annual Audit Plan or
the Interim Audit Report had also not been
submitted.
1) The Committee stressed that it is compulsory
to submit the Internal Audit Plan to the
Auditor General.
2) The concurrence of the Ministry of Finance
& Planning had not been obtained for the
investment of Rs. 242.6 million in Treasury
Bills and Rs. 258.8 in U.S. Dollar fixed
deposits.
2) The CAO was directed to get the approval of
the Ministry in terms of the Finance Act.
3) The Corporation had invested Rs. 25.5 Mn.
in private banks.
3) The AO was advised to get prior approval of
the Ministry in the future investments.
4) 50% to 80 % of the total cost had been paid
as mobilization advances for supplies and
services contrary to the maximum payable
20% as per the Procurement Guidelines.
4) The CAO was directed to follow the rules and
regulations or otherwise get the approval of
the Treasury in case of urgent services.
5) Claims paid to exporters had not been
recovered. The AO stated that according to
the insurance main contract there is no way
of recovering the claims.
5) The CAO was directed to submit a list of
names of the clients that are going to be
written off and names of the clients already
written off from the accounts.
November 14th
2011
SL Social Security
Board
(Ministry of Finance &
Planning)
Contd.
1) It was observed that the 147 posts amounting
to 14% of the total cadre had been vacant.
1) The CAO was directed to fill the vacancies at
earliest possible or to revise the cadre.
2) Approval of the Ministry had not been
obtained for the investment of Rs.
807,165,121/- in the year 2009. The CAO
stated that 2011 investments approved by
the Board had been submitted for the
concurrence of the Minister.
2) The Committee informed the CAO to keep
the Treasury informed of these details.
3) Rs. 2.8 Mn. of the Pension Fund had been
spent to pay distress loans to the employees,
contrary to the objectives.
3) The Committee directed not to follow such
practices in future.
4) Premium amounting to Rs. 6,475,406/- of
Pension & Social Security Benefit Scheme
that had been directly credited to the Bank
Accounts had not been identified and
posted.
4) The CAO was directed to correct the
situation.
5) Some of the targets that had been included in
the Action Plan had not been achieved.
5) The CAO was directed to review the progress
in Programme review meetings & furnish the
progress to the Committee.
6) The contract had been offered to Advent
Techniques in Bangalore subject to a bond
worth of US $ 159.
6) The CAO was directed to send a report
including the date of calling for tenders,
details of the bidders etc. and the present
progress of the project.
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Date/ Name of
Institution and
Ministry
Major Issues and Problems
Discussed
Comments by the Sub Committee and
Decisions
SL Social Security
Board
7) New officers had been appointed on contract
basis without the approval of the Ministry.
7) The Committee stressed that approval of the
Ministry of Finance should be obtained for
such appointments and directed to send the
list of the names of the officers who had
been appointed on contract basis.
8) A new building had been purchased at Rs. 80
Mn. in other city even though District office
is located in Nuwara Eliya. But no members
had been enrolled from the Plantation sector.
8) The CAO was directed to implement a new
methodology to enroll new members.
9) The Committee questioned whether any
awareness programmes had been conducted
abroad to recruit Sri Lankan work force. The
AO stated that two programmes had been
conducted in Kuwait and Singapore.
9) The AO was directed to furnish the
expenditure incurred in these promotional
programmes to the Committee.
10) Investment of Rs. 531 Mn. had been done
in Peoples Leasing Company.
10) The CAO was directed to look into the
present status of the investment due to the
current problem in the stock market.
November 14th
2011
Swami Vipulananda
Institute of Aesthetic
Studies
(Ministry of Higher
Education)
1) The Corporate Plan and the Action Plan had
not been prepared in accordance with the
Public Enterprises Circular.
1) The CAO was directed to prepare the
Corporate Plan for the period of 2010-2015
in line with the Circular.
2) Annual reports for the years of 2007-2010
had not been presented in Parliament.
2) The CAO was directed to present them by
the end of December, 2011.
3) Cost of student gone upto Rs. 10,518 in
2010 compared to 2009.
3) This has caused due to more student intake
in 2010.
4) Capital provision of Rs. 9.9 Mn. made use
for recurrent purposes contrary to FR.
4) Directed not to recur.
5) Physical verification of fixed assets had not
been carried out in year 2008 and 2009.
5) The CAO was directed to carry out physical
verification of assets soon.
6) 10 computers had been procured without
following the open tender procedures. It was
stated that they were purchased at same
price which was decided after calling
tenders by the Eastern University.
6) The CAO was directed to call fresh
quotations in future.
7) 43 cheques of Rs. 5,804,719/- written in
favour of several suppliers had been taken
over by the Store keeper and Senior
Assistant Bursar without posting them to the
suppliers and 21 cheques written in 6
months back had been kept in the office
without issuing to the relevant parties in the
year 2010.
7) The CAO was directed to send detailed
report regarding the matter.
8) Rs. 966,000/- incurred for the private
security services in the year 2010 while
permanent security officers were engaged.
8) The CAO Was directed to send a report
explaining the reasons.
REPORT FROM THE COMMITTEE ON PUBLIC ENTERPRISES OF THEPARLIAMENT OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA______________________________________________________________________________
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Major Issues and Problems
Discussed
Comments by the Sub Committee and
Decisions
November 14th
& 15th
2011
Consumer Affairs
Authority
(Ministry of Co-
operatives & Internal
Trade)
Contd.
1) The Committee observed that there is a
large number of member on the Board of
Directors and was of the view that the effect
is very less.
1) The CAO was directed to appoint less
number of members in consultation with the
Hon. Minister.
2) The Committee observed that some
essential elements had not been embodied in
the Corporate Plan prepared for the period
of 2010-2012.
2) The CAO was directed to submit
comprehensive Corporate Plan for the years
of 2011-2013.
3) The Committee observed following
shortcomings with regard to the internal
audit;
i. No internal audit had been done in the
year 2010
ii. Internal Auditor had only been appointed
in January 2011
iii. Action had not been taken to obtain
approval for the supporting staff for the
internal audit
iv. Representative of the Auditor General
was not invited to audit committee
meetings.
3) The CAO was directed to report back to the
Committee after regularizing the said
shortcomings. Treasury was also directed to
follow-up.
4) The post of Director General had been
vacant for 20 months. Interview was held,
and 4 persons including two internal officers
had required qualifications, but applications
are called again without selecting one
person from them. In addition 07 posts had
been vacant from 10 August, 2010 and 07
officers covering the duties on acting basis.
4) The CAO was directed to take immediate
action regarding these matters and to send the
names of officers who are in acting posts.
5) Even though Board members should be
comprised of variety of experiences, some
present members do not have such
qualifications. Out of 08 members appointed
02 do not possess any qualifications.
5) The CAO was directed to consider the fact
when appointing Board members and Hon.
Minister be informed regarding this.
6) Vacancies exist in different categories had
been 104 as at 27 October, 2011, while 17
persons had been recruited on daily paid and
contract basis even though there is no such
provision in the approved cadre. It was
stated that approval for 6 persons had
already been taken.
6) The CAO was directed to recruit employees
for approved posts.
7) A consultant over 60 years of age had been
recruited without the approval of the
Cabinet.
7) The CAO was directed to rectify the
situation.
8) Attendance of the Board members had been
at a low level for the board meetings. It was
stated that only14 members attend regularly.
8) The CAO was directed to submit list of the
names of members who had less interest to
the Hon. Minister.
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Ministry
Major Issues and Problems
Discussed
Comments by the Sub Committee and
Decisions
Consumer Affairs
Authority
Contd.
9) Fines receivable by the authority amounting
to Rs. 1,152,544 had not been recovered. As
this money comes through the Ministry of
justice, they had written to expedite this
payment. The age analysis of the fines
receivable had not been submitted as
requested, in the previous COPE meeting.
9) The CAO was directed to furnish the age
analysis without further delay, and also to
find a mechanism to obtain fines in time.
10) It was noted that even though every trader
shall register with the Authority at Rs.
100,000/- per annum, no one had registered
so far. It was stated that Act is being
amended since this is not practically
possible.
10) The Committee directed to expedite the
process of amending Act.
11) An officer with less qualifications had been
recruited for the post of Director (Finance)
without the formal approval and he had
been confirmed thereafter. Further he had
been placed 2 increments above the relevant
salary scale.
11) The CAO was directed to look into the
matter and report back to the Committee.
12) Media office which is not included in the
cadre had been filled on contract basis to
the media unit established in year 2010 and
despite the payment of monthly hire charge
of Rs 50,000/- for a motor vehicle and
monthly supply of 120 Litres of fuel,
Board had approved unlimited supply of
fuel for him.
12) The Committee seriously considered this
irregularity and directed the CAO to rectify
the situation and to strictly follow the
Treasury Circulars and FR.
13) 11 employees of the Authority had been
paid overtime exceeding the monthly
salary in certain months of 2010 and it
exceeds 75% of the salary in certain
instances. It was stated that these officers
are attached to the media unit.
13) The CAO/AO was informed that they are
responsible for these irregularities ant to send
the names of Media Officer and other 11
employees to the Committee.
14) It was observed that arrival and departure
of 13 employees had not been recorded in
attendance register, but full salaries had
been paid. It was stated that one of them is
an investigation officer and hence his
authorizing letter is considered as the
attendance for him.
14) The CAO/AO was directed to send the
names of 13 officers to the Committee.
15) Stenography service had been procured at
Rs. 263,900/- and Rs. 235,000/- in year
2010 and 2011 respectively. The CAO
stated that this particular stenographer was
attached to the Ministers Office and was
retired under VRS.
15) The CAO was directed to regularize these
appointments after obtaining Treasury
approval.
REPORT FROM THE COMMITTEE ON PUBLIC ENTERPRISES OF THEPARLIAMENT OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA______________________________________________________________________________
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Institution and
Ministry
Major Issues and Problems
Discussed
Comments by the Sub Committee and
Decisions
Consumer Affairs
Authority
16) Motor vehicles had been assigned to 5
Directors who are not entitled to and fuel
allowances had been paid to them in year
2009 contrary to the Treasury Circulars.
16) The CAO was directed to immediately
discontinue this practice and Treasury was
also directed to stop this practice from now
on.
17) There were some irregularities in providing
benefits to the Chairman and the Directors
of the Institution.
17) The Committee emphasized the importance
of appointing staff according to the Para 03
of the Consumer Affairs Authority Act and
directed the CAO to regularize the matter.
18) 07 employees had been deployed in the
Ministry Office by 19 May 2011 and their
deployment had been extended by one year
with effect from 01 June and 01 July had
been approved. Further 06 employees
recruited on contract basis had been
deployed in Nikaweratiya area, though
there is no regional office.
18) The CAO was directed to send a progress
report in on raids monthly and to rectify the
situation.
19) i) Only 15 commodities had been named as
fixed commodities after establishing the
Authority.
ii) The Committee expressed its
dissatisfaction over not taking proper
action with regard to the importation of the
low quality cement to the country and
stated that the Authority had not given
considerable attention for its responsibility.
The CAO sated that now they had taken
action to check the quality of the cement.
iii) The Committee also enquired about
issues of several other fixed commodities.
19) i) The CAO was directed to send the list of
the commodities that are already named as
fixed commodities.
ii) The CAO was directed to send a report
indicating the date on which this cement lot
had been imported and what action had been
taken.
iii) The CAO/AO was informed that they
have authority to check the quality of the
goods without waiting till complaints and
directed to perform duties stipulated in the
Act.
20) Rs. 36,000/- per month had been paid for
cleaning the building till April 2011. The
amount paid for Cleaning Company had
been increased to Rs. 70,000/- per month
on their request.
20) The CAO was directed to send the
agreement to the Committee and AG.
PARLIAMENTARY SERIES NO. 119
______________________________________________________________________________
119
Date/ Name of
Institution and
Ministry
Major Issues and Problems
Discussed
Comments by the Sub Committee and
Decisions
November 15th
2011
National Apprentice &
Industrial Training
Authority (NAITA)
(Ministry of Youth
Affairs & Skills
Development)
Contd.
1) Annual Reports for the years 2009 &2010
had not been presented in Parliament.
1) The CAO was directed to take action to
present them in Parliament before the budget.
2) 73 officials had been appointed without the
approval of Dept. of Management Services.
The CAO stated that they could be absorbed
since the total cadre had now been
approved.
2) The CAO was directed to absorb the rest of
the official when the Scheme of
Recruitment is approved.
3) Committee noted that the highest rate of
34.8 % apprentices who vacated courses
had been recorded in the year 2010. It was
stated that lack of supervisors was the
major cause for this and it was difficult to
recruit suitable staff due to non-attractive
salary scales.
3) The CAO was directed to do the needful to
improve monitoring and to reduce drop-outs.
He was also informed to adopt a
methodology to recruit staff on contract
basis.
4) The depreciation of fixed assets purchased
from grants had not been correctly identified
and the post of Financial Chief had been
vacant.
4) The CAO was directed to rectify the situation.
5) Advances granted to 20 external Institutions
during 1999 to 2008 had not been settled. It
was stated that outstanding balance by 2011
is only Rs. 97,000/-.
5) The CAO was directed to send the details to
the Auditor General.
6) There had been debtor balances over 5 years
amounted to Rs. 3.1 Mn out of which Rs.
2.1 Mn had been over 10 years and proper
action had not been taken to recover the
dues. It was stated that current balance is
only about Rs. 2.5 - 3.0 Lakhs.
6) The CAO was directed to take action to
recover the dues and keep the AG informed.
7) Two officers had been released to the line
Ministry, while one officer had been
released to the external Institution without
obtaining the Cabinet approval and salaries
and allowances had been paid by the
Institution during 2006-2010.
7) The CAO was directed to get written approval
from the Treasury.
8) The Chairman and the Deputy Chairman
had had consumed excess fuel without
obtaining proper approval. However the
present Chairman had performed his duties
without obtaining salaries and allowances
since the year 2010.
8) The CAO was directed to ensure that this
will not happen in the future and appreciated
the present position.
9) Rs. 400/- per year had been charged from a
student for welfare fund by the 3 national
centres without proper approval and no
welfare had been done.
9) The CAO was directed to send a future plan
on farewell activities to the Committee.
REPORT FROM THE COMMITTEE ON PUBLIC ENTERPRISES OF THEPARLIAMENT OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA______________________________________________________________________________
120
Date/ Name of
Institution and
Ministry
Major Issues and Problems
Discussed
Comments by the Sub Committee and
Decisions
National Apprentice &
Industrial Training
Authority (NAITA)
10) Building had been constructed to establish 7
7 training centres without taking over
the ownership of the lands to the Authority.
It was stated that ownership transferring is
being done.
10)The CAO was directed to send details on the
progress.
11)Reports regarding the 7 vehicles accidents
had not been furnished to the AG.
11)The CAO was directed to send legal
documents regarding the investigations done
to the AG.
November 15th
2011
State Engineering
Corporation of SL
(SEC)
(Ministry of Construction,
Engineering Services ,
Housing & Common
Amenities)
Contd.
1) Annual reports for the years 2007, 2008 &
2009 had not been presented in Parliament.
1) The CAO was directed to table them without
further delay.
2) Shortcomings were observed in the
Corporate Plan prepared for the years 2011-
2015.
2) The CAO was directed to prepare it including
the quantitative values of the targets.
3) The Committee enquired about the
unidentified VAT to be settled. The CAO
stated that a tax officer and also a committee
is appointed to look into this matter.
3) The CAO was directed to report the progress
to the Committee.
4) There was an unrecovered debtor balance of
Rs. 335 Mn.
4) The Committee directed to send the details of
this balance.
5) Poor performances had been observed in
following divisions.
i. Mechanical and Electrical division had
been running at a loss in past 10 years.
(Rs. 73.5 Mn.)
ii. Dolomite Pre-Mix Yard at Matale was
also running at a loss during past 13 years
except year 2006. (Rs. 4.8 Mn.)
iii. Bricks and Carpentry manufacturing
Yard( Rs. 10.42 Mn.)
iv. Aluminum Yard at Ratmalana incurred a
loss in year 2010. ( Rs. 2.8 Mn.)
v. The labour cost of the Mechanical and
Electrical Division at Ratmalana had been
338% compared to the income.
5) The CAO was directed to take necessary
steps to overcome the situation.
6) 156 officers had been recruited without
getting approval of the Department of
Management Services and 187 unskilled
employees had made permanent in excess of
the approved cadre. The actual total cadre
exists was 2406 as at 30th
June 2011 where
approved cadre is only 2068.
6) The Committee directed to send explanations
regarding the cadre situation.
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121
Date/ Name of
Institution and
Ministry
Major Issues and Problems
Discussed
Comments by the Sub Committee and
Decisions
State Engineering
Corporation of SL
(SEC)
07) Following observations had been made
regarding some contracts:
i) Losses incurred in 47 contracts during
2007-2010
ii) Loss of Rs. 301.3 Mn .incurred on 64
constructions executed in 2009-2010.
iii) Invoices for the constructions amounted
to Rs. 18.7 Mn. had not been furnished
and bills for the constructions of Rs. 20.2
Mn. had been delayed in 2008-2009.
07) The CAO was directed to take action to
mitigate losses and to send a complete report
to the Committee on these matters.
08) Overpayment of VAT had been done in
2009.
08) The CAO was directed to take actions to
recover the over payment and to correct the
calculations in the current year accounts.
09) Rs. 2,033,006/- had been paid as the
overtime and holiday pay for the drivers in
addition to the hired charges of those
vehicles as per the agreement.
09) The Committee directed to send a report
including the details of hired vehicles, rates
and expenses.
10) Two motor vehicles of the Institution and
other 08 vehicles procured on hire basis
paying a sum of Rs. 1,298,226/- had been
released to the Ministry contrary to the
Public Enterprises Circular.
10) The CAO was directed to send a full report
on this payments and vehicles to the
Committee.
November 15th
2011
Board of Investment
(BOI)
(Ministry of Economic
Development)
Contd.
1) (i) Corporate Plans
(ii) The Committee questioned about the
targets of the institution
(iii) Achievements expected in re
investments of 1290 million of US $ in
2011.
1) (i) The CAO/AO stated that initially there
had been one plan covering the period 2009-
2013. Subsequently another plan had been
prepared for 2011-2015. The Committee
emphasized that the Corporate Plan should be
a rolling plan for a continuous period of time
and questioned how the Institution works
with a number of Corporate Plans which are
getting frequent changes.
(ii) The CAO/AO stated that;
(a) Earn 5% of the GDP of the
country by way of investments., earlier it had
been 2%
(b) Re-organizing BOI sector-wise
(c) Reduction of cost of BOI
(d) Efficiency be enhanced
(iii) In the first nine months 600US $
achievement shown.
REPORT FROM THE COMMITTEE ON PUBLIC ENTERPRISES OF THEPARLIAMENT OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA______________________________________________________________________________
122
Date/ Name of
Institution and
Ministry
Major Issues and Problems
Discussed
Comments by the Sub Committee and
Decisions
2) For the capital and recurrent budget,
initially got the Treasury approval. But for
amendments such approval has not been
obtained.
2) Treasury approval has been requested, but
not yet obtained. Directed to follow-up and
also to send a copy of amended budget.
3) How many zones coming under BOI and
what are the problems undergoing? 3) There are 12 zones and 125000 workers
employed. They have a problem of having
labour, and at present working with the
Samurdhi Authority to overcome this. In
addition they build hostels in Wathupitiwala
and Biyagama. Investors are carrying out a
building project of hostels in Kandy.
4) Labour cost per month.
4) It would depend on the sectors;
For a labourer – 100US $
Semi-skilled labourer – 115 US $
Manager – 200 US $
The Committee was of the view that this cost
is very high and the investments will not be
encouraged.
5) Low rate of investors coming 5) In 2010 there was a decline due to series of
elections held. But in 2011 it has come to a
reasonable amount.
6) What is the period of time taking a company
to be formed? 6) It cannot be generalized, and depend on the
type of the project. Committees’ view was
that, BOI taken a long time when compared
to India and Bangladesh.
7) Out of 37 companies underutilized and the
factories closed, how many workers lost their
jobs, what was the last day of existence, when
the final accounts were submitted during the
year 2010 and 2011?
7) Directed to send a detailed report to the
Committee.
8) Questioned about the Zones went in to
losses. 8) Biyagama, Wathupitiwala, Mirigama in 2007.
This was caused by under underutilization of
projects and closing down of companies.
High expenditure on water was also a main
factor. Directed to send a full report on this.
9) Presentation of Annual reports 09) Last presented report was 2007.2008
prepared. But not sent to the Ministry.
Directed to present all outstanding reports
within one month.
10) Merbok Transactions
10) Now an international arbitration is going on.
11) Vidyodaya Ayurvedic Private Medical
College. 11) Now under litigation.
12) Perth State 12) They have come to an agreement with the
Plantation Corporation to manage this.
Now the land has been taken back and
earning profit. Chairman was directed to
send a report having looked into.
PARLIAMENTARY SERIES NO. 119
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123
Date/ Name of
Institution and
Ministry
Major Issues and Problems
Discussed
Comments by the Sub Committee and
Decisions
Board of Investment
(BOI)
13) Accounts receivable and payable 13) Normal receivables are ground rent charged
from the companies within the Zone and the
annual fee from out of the Zone. If the
Company is closed, it is impossible to
recover and litigation process is started.
14) There had been 249 million of doubtful
debtors.
14). Directed to send a report and provision
could have been made on doubtful debtors.
15) Unit cost of electricity 15) Varied according to the sector. Very roughly
it is 12.5 US $ cents per week.
16) 100 million outstanding to be recovered
from 09 Government institutions.
16) This has been in connection with providing
some caps to the Army. Directed to send a
report.
17) Incoming of investors and signing of
agreement
17) Recently about 30 companies came in
during a week and roughly about 08
agreements were signed on Thursdays of the
week which has been set apart to that
purpose.
18) 142 million not being paid to the
consolidated fund in 2010.
18) As they were not getting any fund from the
Government they have got permission from
the treasury. But they had paid a lump sum.
Directed to send a copy of the letter of the
Treasury.
19) Vehicle loans granted without the necessary
documents
19) Subsequently submitted. Directed to report.
20) PAYE tax 20) Done on a board directive. Directed to get
the approval from the treasury.
21) Violated the Inland Revenue Circular in
2010 in paying PAYE tax.
21) Directed to send explanation to the
Committee.
22) 05 executive staff had been on contract
basis while 54 posts had been vacant.
22) The CAO was directed to send the cadre
position in detail to the Committee.
23) Proper incentive scheme had not been
prepared yet for the staff.
23)The CAO was directed to send a report to the
Committee.
24) Employees had been released to the line
Ministry contrary to the Circulars.
24)The Committee directed to send an
explanation.
25) Motor vehicles had been released to the line
Ministry and spent Rs. 6.9 Mn for repairs
contrary to the Circulars.
25) The CAO was directed to send a report.
26) What are the projects got tax released in
years 2008, 2009 and 2010?
26) The CAO was directed to send a detailed
report about these projects.
REPORT FROM THE COMMITTEE ON PUBLIC ENTERPRISES OF THEPARLIAMENT OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA______________________________________________________________________________
124
Date/ Name of
Institution and
Ministry
Major Issues and Problems
Discussed
Comments by the Sub Committee and
Decisions
November 15th
2011
Central Environmental
Authority
(Ministry of
Environment)
1) Annual Reports for the years 2008, 2009
and 2010 had not been presented in
Parliament.
1) The CAO was directed to expedite the
presentation of said reports in Parliament.
2) The Committee was not satisfied with the
action taken to handle public complaints and
follow up actions on the same.
2) The CAO was directed to take whatever the
actions needed to handle them more
appropriately.
3) It was noted that the 77 vacancies exist in
the Authority. 30 vacancies had been filled
by now. The CAO stated that District and
Divisional Secretaries request
environmental officers from the Authority
as well.
3) The Committees view was that there is no
need of attaching CEA officers in District
Secretariats and Divisional Secretariats and
directed to attach officers where essential
after establishing branch offices of CEA.
4) According to the Corporate Plan 2008-2012
it was the main target to amend the National
Environmental Act. It had not been done so
far.
4) The CAO was directed to expedite the
amendment of Act.
5) Attendance allowances had been paid to
officers contrary to the provisions in Public
Enterprises Circular.
5) The CAO was directed to obtain the Treasury
approval at earliest possible.
PARLIAMENTARY SERIES NO. 119
______________________________________________________________________________
Appendix D
REPORT FROM THE COMMITTEE ON PUBLIC ENTERPRISES OF THEPARLIAMENT OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA______________________________________________________________________________
125
Appendix D
Issues Discussed at the Meetings of the
Sub Committee II (Agriculture & Media) of the
Committee on Public Enterprises
Date/Name of the
Institution and
Ministry
Major Issues/Problems Discussed Comments by the Sub Committee
& Decisions
17th August, 2010
Botanical Garden
Trust Fund
(Ministry of
Economic
Development)
1. Delay in presenting Accounts
to Audit
2. Internal Audit Unit is not
functioning in the Fund
3. Electrically operated gate to
be fixed at the premises of the
Peradeniya Botanical garden
had not been in operation
after spending Rs.1.36 million
4. Only 3 members in the board
of trustee, but as per the Act it
should be 4.
1. Financial statement should
be presented to Audit in time
2. Ministry Internal Audit
should oversee the Accounts
until a new internal Auditor
is appointed
3. Directed the NERD
Institution to expedite the
construction
4. Due to the change of the
Ministry, number of the
members of the Board had
been reduced to 3, directed to
amend the Act accordingly.
18th August, 2010
Sri Lanka
Institute of
Printing
(Ministry of Youth
Affairs)
1. Annual Reports had not been
tabled in Parliament from the
inception
2. Internal Audit Unit is not
functioning in the Institute
3. Organizational chart is not get
registered with the Dept. of
Public Enterprises
1. Action should be taken to
table Annual Reports
immediately
2. To get assistance of the
Ministry Internal Audit
3. This type of delays should be
overcome promptly
PARLIAMENTARY SERIES NO. 119
______________________________________________________________________________
126
Date/Name of the
Institution and
Ministry
Major Issues/Problems Discussed Comments by the Sub Committee
& Decisions
19th August, 2010
Institute of Post
Harvest
Technology
(Ministry of
Agriculture)
1. Discussed the qualifications
of the higher level staff
2. Annual Reports had not been
tabled in Parliament since
2006
3. Action Plan for 2010 had not
been submitted to COPE
4. Vegetables & fruits display
units had been purchased and
sold at a lower cost than
purchased value incurring a
loss of Rs. 1,845,000/- in
2009
5. Rs. 600,000/-had been spent
to repair 20 years old machine
used to produce noodles
6. Assets & Liabilities taken
over from the Paddy
Marketing board had not been
settled in time due to poor
response from the Govt.
valuer
7. It has been observed a
considerable increase in
administrative &
establishment expenses from
2006 to 2008
8. Approved limits for fuel had
exceeded in the year 2008 by
the Chairman, amounting to
Rs. 102,441/-
9. Officers had been appointed
on acting basis without filling
the existing vacancies
1. Directed to send the
qualifications of the all
higher level officials within a
week
2. To table the all outstanding
Annual Reports within next 2
months
3. Action plan should be
submitted to COPE & the
Auditor General
4. Government rules &
regulations should be
followed by the Institution
5. A survey should be done to
find out whether this
machine would be able to
cater the present market
requirement & the working
conditions of the machine
6. The response of the Govt.
Valuer is very unsatisfactory
and directed to settle this
matter within 3 months time
7. Directed to submit a report
justifying the expenses
8. Although it had been used
for official purposes prior
approval should be taken by
the officers, Directed to
obtain covering approval
9. To fill all the vacancies, once
the scheme of recruitment is
approved from the Dept. of
Management Services
REPORT FROM THE COMMITTEE ON PUBLIC ENTERPRISES OF THEPARLIAMENT OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA______________________________________________________________________________
127
Date/Name of the
Institution and
Ministry
Major Issues/Problems Discussed Comments by the Sub Committee
& Decisions
19th August 2010
Land Survey
Council
(Ministry of Land
& Land
Development)
1. Delay in Presentation of
Annual Report for 2009
2. Audit & Management
Committees had not been held
3. Financial targets had not been
included in the Corporate plan
prepared for the period 2010-
2013
4. Payment of arrears of
allowances for the Chairman
& the Vice Chairman had
made a surplus of Rs.
77,408/- in the year 2008, No
proper approval had been
obtained
5. Due to the poor salary scales
of the Council only Actg.
Appointments could be made
to the posts of Secretary & the
Accountant
1. Directed to take action to
present Annual Reports in
time
2. It is essential to hold Audit &
Management Committees
regularly & directed to
furnish the management
report for Audit
3. Corporate Plan has to be
amended & to be more
realistic
4. Explanation given is not
accepted by the Committee
5. Salaries do not match with
the professional
qualifications
PARLIAMENTARY SERIES NO. 119
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128
Date/Name of the
Institution and
Ministry
Major Issues/Problems Discussed Comments by the Sub Committee
& Decisions
20th August,2010
National Aquatic
Resources
Research &
Development
Agency
(Ministry of
Fisheries & Aquatic
Resources
Development)
1. Annual reports had not been
presented to parliament after
2007
2. Debtor balances amounting to
Rs.3,171,594/- had not been
recovered
3. Guide lines in the
establishment code had not
been followed when
promotions & appointments
were given
4. Corporate plan had not been
updated for the year 2010
5. Nine Officers attached to
NARA had been released to
other entities
1. Directed to take immediate
action to present Annual
Reports in Parliament
2. Most of the Institutions had
followed a lethargic way of
recovering debtor balances,
A proper mechanism should
be followed
3. Directed to get further advice
from the Treasury
4. Directed to submit the
updated Corporate Plan
within 3 months
5. To submit a report to the
Committee in this regard
23
rd
September,2010
State Printing
Corporation
(Ministry of Mass
Media &
Information)
1. Delay in submitting Budget
2. Audit & Management
Committees are not held
properly
3. Chief Internal Auditor post
had been vacant since 2007
4. Corporate plan prepared
For the period 2009-2013 had
not been updated
1. Budget should be submitted
prior to the commencement
of the particular year
2. Directed to meet at least
once in every 3 months
3. Directed to appoint a
permanent Chief Internal
Auditor immediately
4. To update the Corporate plan
on yearly basis
5. Committee was of the view
that the Administration of
the Corporation is in better
position when compared
with the other Institutions.
REPORT FROM THE COMMITTEE ON PUBLIC ENTERPRISES OF THEPARLIAMENT OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA______________________________________________________________________________
129
Date/Name of the
Institution and
Ministry
Major Issues/Problems Discussed Comments by the Sub Committee
& Decisions
23
rd September
2010
Colombo
Commercial
Fertilizer Co. Ltd.
(Ministry of
Agriculture)
Contd...
1. The Company had not been
registered under Companies
Act since it operates under a
competent authority
2. Debtor balance of Rs. 60
million had been written off
without Treasury approval
3. An association in
Anuradhapura district had
distributed 41,571.45 M.T. of
fertilizer in contrary to the
recommendations of the
committee
4. Audit & Management
Committees had not been held
for the year 2010
5. Internal Auditor had been
functioning also in the post of
Sales Manager, due to the
permanent post holder was
sent on compulsory leave
6. No approved cadre in the
Company, Scheme of
recruitment is under
preparation
7. Unrealistic budgeting in the
Company
1. Immediate action should be
taken to register the
Company before the 2012
budget
2. The Committee seriously
considered the illegal writing
off of the debtor balances,
since no way to correct it
advised to get the covering
approval & submit a detail
report to the Committee
3. Directed to submit a report to
the Committee before the
commencement of the 2012
Budget
4. The Committee emphasized
the requirement of holding
the Audit & Management
Committee meetings
regularly
5. Internal Auditor’s work
should be independent as to
maintain the transparency
6. Agreed to submit the scheme
of recruitment for Treasury
approval within 6 months
7. Directed to prepare the
Budget for the year 2011
PARLIAMENTARY SERIES NO. 119
______________________________________________________________________________
130
Date/Name of the
Institution and
Ministry
Major Issues/Problems Discussed Comments by the Sub Committee
& Decisions
Colombo
Commercial
Fertilizer Co. Ltd
8. Audit & Management
Committees had not been held
for the year 2010
9. Internal applications were
called for the post of A.O. and
later cancelled the interview
due to the malpractices of the
applicants, appointed
someone else considering
performance & experience
8. To hold the Committee
meetings without further
delay
9. Directed to call fresh
applications for the post
REPORT FROM THE COMMITTEE ON PUBLIC ENTERPRISES OF THEPARLIAMENT OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA______________________________________________________________________________
131
Date/Name of the
Institution and
Ministry
Major Issues/Problems Discussed Comments by the Sub Committee
& Decisions
O6th October,
2010
Sugarcane
Research Institute
(Ministry of
Plantation
Industries)
1. Performance indicators had
not been included in the
Corporate plan for the period
2008 – 2012
2. 2007 – 2009 Annual Reports
had not been tabled in
Parliament
3. Without the legal ownership
of the land, Institute had spent
Rs. 8.61 million to develop it
4. Revaluation of assets is in the
process
5. Discussed about the Meerut
Oven system
1. To update the Corporate plan
in a way of a rolling plan and
submit the new Corporate
plan within one month
2. To present the annual reports
in Parliament before 2012
Budget and 2010 annual
accounts should be tabled
prior to the due date
3. Secretary to the Ministry
should intervene to find a
solution since Mahaweli
Authority, the landowner is
reluctant to transfer the
ownership
4. To finalize the valuation
process before 2010 and
include those figures in
accounts
5. To submit the report to the
Committee in this regard
06th October, 2010
Tertiary &
Vocational
Education
Commission
(Ministry of Youth
Affairs)
1. Annual report for the year
2009 had not been tabled in
Parliament
2. Vocational Education &
Training Plan had been only
completed for the
Sabaragamuwa Province
3. Out of 7 Advisory
Committees established for
various industrial fields only 5
Committees had met
4. After spending Rs. 1.19
million for 14 research
programmes only 10 reports
had been submitted with the
recommendations
1. Directed to take early action
to table the annual report &
the accounts for the year
2010
2. Vocational Education &
Training Plans(VET) should
be completed for other
provinces soon
3. Action should be taken to
convene all 7 Advisory
Committees after appointing
the Board of Directors
4. Action should be taken to get
the balance research reports,
Government funds should be
invested for the betterment of
the Country by implementing
the recommendations where
possible
PARLIAMENTARY SERIES NO. 119
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132
Date/Name of the
Institution and
Ministry
Major Issues/Problems Discussed Comments by the Sub Committee
& Decisions
13th October, 2010
National
Engineering
Research &
Development
Centre – (NERD)
(Ministry of
Technology &
Research)
1. Some objectives had not been
included in the Corporate Plan
2. Two projects worth Rs.
1,429,698/- had not been
implemented due to technical
problems & lack of specific
instructions from the donor
agency
3. NERD had spent only a little
money for research &
development work due to lack
of engineering staff
4. Annual reports from 2003 to
2005 & from 2008 to 2009
had not been tabled in
Parliament
1. Action Plan should be
prepared annually based on
the Corporate Plan
2. Since the money is deposited
in the Ministry Account &
the Central Bank account,
action should be taken to
implement those projects
very soon
3. This situation had occurred
due to the Poor salary scales
to the Engineers
4. Directed to table all
outstanding annual reports
early
14th October, 2010
Sugathadasa
National Sports
Complex
Authority
(Ministry of Sports)
Contd...
1. Corporate Plan & Action Plan
had not been prepared
2. Most of the stadiums had
been running at a loss
3. Out of Rs. 38,145,344/- of
debtor balance, Rs. 25 million
was due from the SL Cricket
Association, and discussions
held were not fruitful.
4. Without staff being absorbed,
R. Premadasa Stadium had
been given on 30 years lease
to SL Cricket Association and
the Salaries to the Staff had to
be paid by the Sports
Complex
1. Directed to prepare the
corporate plan in accordance
with the PED circular
2. A new methodology should
be adopted when stadiums
are given on rent
3. To recover debtor balances
before the end of year 2010
4. To discuss with the Cricket
Association and get it solved
REPORT FROM THE COMMITTEE ON PUBLIC ENTERPRISES OF THEPARLIAMENT OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA______________________________________________________________________________
133
Date/Name of the
Institution and
Ministry
Major Issues/Problems Discussed Comments by the Sub Committee
& Decisions
Sugathadasa
National Sports
Complex
Authority
5. Without obtaining the
ownership, Sports Complex is
using several vehicles
belonging to the other
Institutions
6. Annual Reports for the years
2008 & 2009 had not been
presented to Parliament
7. Audit & Management
Committee had met once for
the year 2010
5. Ownership should get
transferred immediately
6. Early action is needed to
present the Annual Reports
in Parliament
7. Directed to meet once in
every 3 months
3rd
November, 2010
National
Agricultural
Diversification &
Settlement
Authority
(Hadabima
Authority)
(Ministry of
Agriculture)
1. Annual Report for the period
2007 – 2009 had not been
tabled in Parliament
2. 28 employees had been
deployed on contract basis at
sales outlets in Peradeniya, in
addition to the approved
cadre, and they are paid out of
the daily income of the sales
outlets
3. Corporate Plan had been
prepared on yearly basis,
instead of preparing it on long
term basis.
4. Two buildings had been
constructed by the Authority
without the legal ownership of
the lands and later action had
been taken to acquire those
lands
5. Serious fraudulent act had
taken place while distributing
of 14 Persian cattle, neither it
had been given as per the
approved distribution list nor
transferred to Ududumbara
divisional secretariat as per
the requirement
1. Directed to table the Reports
within 2 weeks
2. Directed to see the
possibilities to make them
permanent with the approval
of the Dept. of Management
services
3. Wrong procedure had been
adopted, and the Corporate
plan should be prepared for
the longer period of the
Institution
4. Authority must be vigilant
before the construction had
taken place
5. Legal action recommended
by the Committee against the
Youth Services Officer at
Ududumbara, Divisional
Secretariat & any other
officer involved in this
regard
Directed to submit a report
to the Committee within
one month
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134
Date/Name of the
Institution and
Ministry
Major Issues/Problems Discussed Comments by the Sub Committee
& Decisions
03rd
November,
2010
SL Institute of
Textile Apparel
(Ministry of
Industry &
Commerce)
1. Institute of Textile Apparel
has been established as a
result of the amalgamation of
Textile Training & Service
Center and the Clothing
Industry Training Institute
2. Separate Annual reports had
been presented to Parliament
before amalgamation
3. New Director General will be
appointed by January, 2011
after obtaining approval for
new scheme of recruitment
1. Directed to submit the
winding up accounts early
2. To Table all outstanding
annual reports
3. Action to be taken to expand
the consultancy services &
research facilities of the
Apparel Industry In Sri
Lanka
03rd
November,2010
SL Council for
Agriculture
Research Policy
(Ministry of
Agriculture)
Contd…
1. Corporate Plan had not been
prepared as per the circular
guidelines & some activities
had not been implemented
and not updated annually
2. Identified shortcomings in the
present National Agriculture
Research Policy
3. No Audit & Management
Committees were held for the
year 2010
4. Considerable number of
project reports had not been
furnished as per the Project
agreement
1. A new Corporate Plan is
needed to be prepared and
submit to the Committee
within 2 months
2. Amendment to the Act is
necessary to meet the present
requirement and
improvement of
infrastructure and
communication facilities are
emphasized in the new
policy to be adopted
3. Directed to hold the meetings
without further delay
4. Legal action to be taken
against those who had
breached the agreements and
pointed out those agreements
should be only with the
Research Officers
REPORT FROM THE COMMITTEE ON PUBLIC ENTERPRISES OF THEPARLIAMENT OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA______________________________________________________________________________
135
Date/Name of the
Institution and
Ministry
Major Issues/Problems Discussed Comments by the Sub Committee
& Decisions
SL Council for
Agriculture
Research Policy
5. In contrary to the Act,
Research Officers had been
conducted their own
researches with foreign
donors directly
6. Internal Audit Plan & Audit
reports had not been furnished
to Auditor General
7. Annual reports for the year
2009 had not been tabled in
Parliament
8. To obtain the foreign funds,
the executive director of the
council had signed
agreements with donor
agencies without treasury
approval
5. Directed to submit a report
in respect of all irregular
projects and to take action to
stop projects in such nature
6. Directed to furnish all such
reports to AG in future
7. To table all outstanding
reports in Parliament
8. Take action to stop such mal-
practices immediately
08th November,
2010
Official Languages
Commission
(Ministry of
Official Languages
& Social
Integration)
Contd..
1. .Main objectives had not been
included in the Corporate plan
for the years 2010-2012
2. Annual reports for 2004-2008
had not been presented to
Parliament
3. Fund received from the
foreign donors had not been
included in the Financial
statement
4. Normal practice of the
Commission is to remit the
income from the Government
& non Governmental
Organizations in a deposit
account which had not been
reflected in the Commission’s
accounts
1. To reformulate a new
Corporate plan incorporating
the main objectives of the
Commission
2. Early action is needed to
present the Annual report
3. All funds from the foreign
donors should come through
the External Resources
Department and should be
included in the financial
statement
4. Accounting policy of the
Commission should be
revised, present practice
indicates a serious lapse of
the accounting system,
directed to submit a report
regarding all the income
received from the year 2005
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136
Date/Name of the
Institution and
Ministry
Major Issues/Problems Discussed Comments by the Sub Committee
& Decisions
Official Languages
Commission
5. A special allowance of Rs.
624,390/- had been paid for
the years 2006, 2007 & 2009
on pending approval
6. Allocation of Rs. 2.3 million
had not been utilized for some
programmes as planned by the
Commission
5. An illegal payment had been
done by the Commission,
Either to obtain the covering
approval or to recover from
the officers concern
6. Programmes were not held
due to the non functioning of
the Board of Governors
08th November,
2010
Arther C. Clarke
Institute for
Modern
Technologies
(Ministry of
Technology &
Research)
1. The researches had been
delayed due to existence of
46 vacancies in the Institute.
The salaries & cadre
Committee had turned down
the request of increasing the
salaries
2. Audit & Management
Committee had not been
appointed for the current year
due to the unawareness of the
composition
3. Observed the delays in the
incubator project
4. Annual reports had not been
tabled for the years
2004,2005,2008 & 2009
1. Obstacle to recruit staff was
the low remuneration paid to
them. Self generated funds
had been paid as allowances
to the staff to overcome this
situation which was
appreciated by the
Committee
2. Directed to hold the meetings
as soon as possible
3. pointed out the importance of
having collaboration with the
health sector
4. To table the Annual Reports
immediately
REPORT FROM THE COMMITTEE ON PUBLIC ENTERPRISES OF THEPARLIAMENT OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA______________________________________________________________________________
137
Date/Name of the
Institution and
Ministry
Major Issues/Problems Discussed Comments by the Sub Committee
& Decisions
08th November,
2010
Disaster
Management
Centre
(Ministry of
Disaster
Management)
1. Corporate plan for the year
2010-2014 had not been
approved by the Council
2. Annual reports from 2007-
2009 had not been tabled
3. Audit & Management
Committees had not been held
due to non functioning of the
Director Board, participated
in the Ministerial Committees
4. Advance of Rs. 4 million had
been erroneously accounted
as for the National Safety Day
expenses out of which a
portion had been spent for
another project
5. National Disaster
Management Plan & the
National Emergency
Operating Plan had been
prepared and waiting for the
concurrence of the Council
1. Directed to get the approval
when the council meets in
December 2010
2. Directed to take action to
table those Annual Reports
including the 2010 Report
3. To appoint Audit &
Management Committees
after amending the ACT
4. Directed to maintain separate
accounts for separate
projects otherwise it
misleads the situation
5. Directed to submit copies of
all these reports to the AG
10th
November,2010
National Council
for Elders
(Ministry of Social
Services)
Contd...
1. Contradiction between the
Council & the Management
Services Department in
respect of the name of the
council, which made delays
in promotions and the
recruitments for 5 years
2. long delay in presenting 2005-
2009 Annual reports in
Parliament
3. No Internal Audit unit is
functioning in the Council
4. Audit & Management
Committee had not been
1. Directed to discuses with the
higher officials and get the
scheme of recruitment
finalized.
2. Annual reports should be
tabled in Parliament at the
prescribed period of time
3. To get the assistance of the
Ministry Internal Audit
4. Audit & Management
Committee should be
PARLIAMENTARY SERIES NO. 119
______________________________________________________________________________
138
Date/Name of the
Institution and
Ministry
Major Issues/Problems Discussed Comments by the Sub Committee
& Decisions
National Council
for Elders
appointed
5. Corporate plan had not been
updated for the period 2004-
2008
6. A Fixed Assets Register had
not been maintained
7. Around 8 lakhs of elders
Identity cards had been issued
by the Council
appointed after appointments
to the Director Board
5. A New Corporate Plan
including all activities should
be prepared for the period
2011 – 2016
6. Fixed Assets register should
be audited & submit to the
Committee within 3 months
7. Methodology should be
adopted to revalidate the
identify cards annually
10th November,
2010
Sri Lanka Press
Council
(Ministry of Mass
Media &
information)
Contd...
1. Annual Report for 2009 &
2010 had not been tabled in
Parliament
2. No Internal Audit unit in the
council
3. Audit & Management
Committee had met only once
for the year 2009
4. Even though the Council had
sent reminders to some News
papers to get registered or
renewed license, and poor
response received from them
5. Complaints had been received
by the general public which
are under review
6. Observed that the Director,
Information had not
participated in the Board
meetings
1. Annual reports should be
submitted to Parliament
within the stipulated time
frame
2. Ministry Internal Audit
oversees the functions
3. Be ensure to meet once in
every three months
4. Directed to take action
against those Institutions &
revise the registration fee
5. Action should be taken to
investigate & settle those
complaints within three
months time
6. Directed to participate in the
Board meetings in future
REPORT FROM THE COMMITTEE ON PUBLIC ENTERPRISES OF THEPARLIAMENT OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA______________________________________________________________________________
139
Date/Name of the
Institution and
Ministry
Major Issues/Problems Discussed Comments by the Sub Committee
& Decisions
Sri Lanka Press
Council
7. Rs. 1.6 million had been in
fixed deposit accounts
without the Treasury approval
8. Committee emphasized that
some news items written by
journalists would harm the
general public & the country
7. Directed to obtain the
Treasury approval
8. To enhance the standard &
the quality of the journalism,
necessity of setting up a
government institute to train
journalists is identified
03rd
December,
2010
Human Resource
Development
Council
(Ministry of Youth
Affairs)
Contd…
1. Audit & Management
Committees had met only
once in the year 2010
2. Form 2005 Annual reports
had not presented to
Parliament
3. Action had been taken to
change the titles of some
skilled job categories
4. Receipts & payments
amounting to Rs. 6,758,149/-
spent for conducting capacity
Development programmes
had not been disclosed in the
accounts
5. A consultant serving on
contract basis in the Council
had obtained Rs. 264,475/- as
salaries & allowances while
working in another company
1. To meet at least once in
every three months time
2. Before 10th
December, 2010
directed to present all
outstanding annual reports in
Parliament
3. Make aware of the general
public regarding the changes
of the job titles
4. Shortcomings occurred due
to absence of professional
Accountant in the Council
5. To submit a report to the
Committee
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140
Date/Name of the
Institution and
Ministry
Major Issues/Problems Discussed Comments by the Sub Committee
& Decisions
Human Resource
Development
Council
6. Rs. 15,051,075/- had been
given to another Govt.
Institution to train 3780
persons with the consent of
the Chairman violating the
tender procedure
7. Ministry of Vocational &
Technical Training had
provided Rs. 1.5 million to
improve the awareness
creation of the school leavers
out of which Rs. 1,487,032/-
had been spent for stage
decorations, lightening &
publicity
8. Rs. 1,545,765/- had been
spent on the preparation of the
hand book on construction
industries, only the draft
English version submitted to
Audit
6. Since no progress report
submitted by that Institution
directed to submit a report to
the COPE
7. Objective had not been
achieved by the council
directed to submit a report to
the COPE regarding that
8. Directed to submit a report to
COPE
May 23 rd
2011
Textile Quota
Board
( Ministry of
Industry &
Commerce)
1. Present position of the Board
is enquired.
2. Annual reports since 2006
had not been presented in
Parliament
It was observed that out of
the total contractual amount
of Rs.921,265/- a sum of
Rs.552,709 had been paid to a
private audit firm to introduce
an electronic monitoring
system where the contractor
has failed to supply the
service
1. As per the Gazette
notification of April 2010
Government had decided to
wind up the Textile Quota
Board.
2. The Committee directed to
prepare all the outstanding
reports and to present in
Parliament without
further delay
The Committee was
informed that it had been
decided to convert the
system in order to facilitate
the activities of the
institution.
REPORT FROM THE COMMITTEE ON PUBLIC ENTERPRISES OF THEPARLIAMENT OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA______________________________________________________________________________
141
Date/Name of the
Institution and
Ministry
Major Issues/Problems Discussed Comments by the Sub Committee
& Decisions
May 23
rd 2011
Sri Lanka
National Freedom
from Hunger
Campaign
( Ministry of
Agriculture)
1. No annual reports had been
presented in Parliament after
1999
2. Corporate Plan for the period
2011-2013 had not been
approved by the Board of
Directors due to short
comings
1. Directed the CAO/AO to
table completed reports in
Parliament within a period of
one month.
2. Directed to submit the
corrected one for approval
May 23 rd
2011
Manthai Salt Ltd.
( Ministry of
Industry &
Commerce
1. The Committee observed the
following shortcomings.
• Audited accounts for the
period 2009/2010 had not
been presented to the Auditor
General
• Financial Accounts for the
period 2010/2011 had not
been prepared.
• Annual Reports from the year
2008 had not been presented
in Parliament.
2. A cash cheque worth Rs. 2
million issued by the
Company as a donation in
favour of the Ministry of
Industry & Commerce had not
been received by the Ministry.
The Committee was made aware that
this has been done on the instructions
given by the former Chairman of the
Company.
1. Action should be taken to
present all the outstanding
Annual Reports in
Parliament early.
2. Directed to submit a report to
the Committee in this regard
and hand over the matter to
the fraud Bureau for further
investigation
PARLIAMENTARY SERIES NO. 119
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142
Date/Name of the
Institution and
Ministry
Major Issues/Problems Discussed Comments by the Sub Committee
& Decisions
May 24 th
2011
&
September 13th
2011
Lanka Fabrics
Limited
( Ministry of State
Resources &
Enterprise
Development)
1. There had been a debtor
balance of Rs.3.9 million and
a credit balance of Rs.2.8
million and as a result of
setting off of debtor balance
against the credit balance only
Rs. 01 million debtor balance
was remaining
2. The Committee enquired
action taken regarding the
following matters.
• Purchase of Handlooms
valued at Rs.6.5 millions from
the private sector violating
Government procurement
procedure on the Chairman’s
influence
• Cash collection of show
rooms being taken away by
the chairman for private
purposes
• Improper use of petty cash
imprest by the chairman for
private purposes
• The loan amounting to Rs.8
million obtained from the
SME Bank not being properly
utilized.
3. Amalgamation of Lanka
Fabrics Ltd. with Lak Sala as per
the Cabinet decision.
1. To write off the amounts due
from the 2 tsunami victims
after obtaining necessary
approval.
2. No action had been taken
regarding these issues.
Directed to hand over these
allegations to the Fraud
Bureau and submit a report
within 2 weeks.
Lanka Fabrics would be re-
summoned within 3 months to
review the progress.
3. As It is not viable to maintain
Lanka Fabrics with its objectives &
available resources, the Cabinet had
approved a VRS in respect of the 5
officers and with the willingness of
the other 3 officers, directed the
Treasury to submit a Cabinet paper
seeking approval to absorb those 3
officers to the Ministry of Industries
for which Lanka Fabrics was earlier
attached to.
REPORT FROM THE COMMITTEE ON PUBLIC ENTERPRISES OF THEPARLIAMENT OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA______________________________________________________________________________
143
Date/Name of the
Institution and
Ministry
Major Issues/Problems Discussed Comments by the Sub Committee
& Decisions
May 24 th
2011
National
Secretariat of
Persons with
Disabilities
( Ministry of Social
Services)
1. Following shortcomings
were observed by the
Committee.
• Corporate Plan, had not been
prepared
• No internal audit division had
been functioning.
• Audit & Management
Committee meetings had not
been held regularly.
• Certain appointments which
had been made without the
approval of the Dept. of
Management Services.
As per the Cabinet decision ,8% of
the income of Supiri Wasana
Sampatha had to be given to the
institution for the benefit of
persons with disabilities.
2. The Committee brought to
the notice of the CAO/AO
that the supporting documents
on the following expenses had
not been furnished to the
audit.
• Donation of Rs.8,851,994/-
sent to the District Secretariat-
Jaffna
• Rs.9,800,408/- given away for
the repairs of the houses of
the disabled persons.
Rs.21,998,424/-given away
for construction of houses
1. To take immediate action in
order to overcome these
shortcomings.
2. The CAO/AO was directed
to look into this matter and
do the needful.
PARLIAMENTARY SERIES NO. 119
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144
Date/Name of the
Institution and
Ministry
Major Issues/Problems Discussed Comments by the Sub Committee
& Decisions
May 24th
2011
National Institute
of Social
Development
( Ministry of Social
Services)
1. Annual reports for the year
2008 and 2009 had not been
tabled in Parliament.
2. No Internal Audit division in
the Institute
1. To take early action to table
those reports together with
that for 2010, in Parliament.
2. Carry out the Internal Audit
functions by the Ministry
May 30th
2011
Industrial
Technology
Institute
( Ministry of
Technology &
Research)
1. It was observed that the
institute had tabled Annual
Reports only up to the year
2008.
2. Following shortcomings had
been observed in the
Corporate Plan for the Period
2009-2013
• Not updated considering the
current trends
• Organizational Chart with all
the posts not included.
• Operating results of three
preceding years not analyzed.
3. The committee noted that 04
officers employed in a project
had been paid special
allowances amounting to Rs.
478,214/- without obtaining
the treasury approval.
4. It was observed that an
amount of Rs.723, 257 had
been incurred as welfare
expenditure of the officers
without the approval of the
Dept. of the Public
Enterprises.
1. To expedite the tabling of
Annual Reports for the years
2009 and 2010 in Parliament.
2. To prepare a fresh Corporate
Plan for the period 2011-
2015 taking the new projects
and researches into
consideration.
3. As per the CAO/ AO’s
explanation, these
allowances had been paid in
accordance with the Public
Finance Circular No.380
4. The Committee stressed the
importance of obtaining the
approval for the purposes as
such.
REPORT FROM THE COMMITTEE ON PUBLIC ENTERPRISES OF THEPARLIAMENT OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA______________________________________________________________________________
145
Date/Name of the
Institution and
Ministry
Major Issues/Problems Discussed Comments by the Sub Committee
& Decisions
May 31st 2011
Sri Lanka
Institute of
Tourism and Hotel
Management
( Ministry of
Economic
Development)
1. Delay in the presentation of
Annual Reports in Parliament
2. Corporate Plan had not been
prepared.
1. The CAO/ AO was directed
to present all the outstanding
annual reports in Parliament
2. Directed to submit the
Corporate Plan for the period
2011-2016 to the Committee.
May 31st 2011
Sri Lanka
Tourism
Development
Authority
( Ministry of
Economic
Development)
1. Annual reports for the year
2008 and 2009 had not been
tabled in Parliament.
2. The Committee stressed the
fact that as the performance
indicators were not available
in the Corporate Plan for the
period 2009-2011, it had been
unable to evaluate the
activities.
3. Internal Adit Programme had
net been submitted to the
Auditor- General. The post of
Internal Auditor was vacant.
4. Audit & Management
Committee had not been held
regularly.
5. Enquired whether any action
had been taken to recover
miscellaneous debtors of
Rs.11 million and Rs.12
million for the years 2008 and
2009 respectively.
As the CAO/AO explained,
that by April 2011 there was
only Rs.18 million to be
recovered.
1. The CAO / AO was directed
to expedite the process
without delay.
2. To submit the revised
Corporate Plan without
further delay
3. Agreed to submit the Audit
Programme to the Auditor
General, once the vacant post
of Internal Auditor is filled.
4. Directed to hold the meetings
as prescribed in the PED
Circular.
5. The Committee directed to
submit a full report
indicating the age analysis on
this.
PARLIAMENTARY SERIES NO. 119
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Date/Name of the
Institution and
Ministry
Major Issues/Problems Discussed Comments by the Sub Committee
& Decisions
September 13th
2011
Paranthan
Chemicals Company Ltd.
(Ministry of State
Resources &
Enterprise
Development)
1. Corporate Plan had not been
prepared by the Institute.
2. Approval of the Dept. of
Management Services had not
been obtained for the staff
cadre.
3. The profits of the Company
had been on the gradual
decline.
4. Production activities of the
company are queried.
5. The Committee observed that
the lorry bearing No. WP- LH
7916 had been obtained on
the basis of monthly rental of
Rs. 173,000 on a 3 year lease
agreement, and this vehicle
had been registered under the
name of the present Chairman
of the Company.
1. As the AO stated that the
Corporate Plan for the period
2012 – 2014 had been
prepared and submitted to
the line Ministry, the
Committee directed the
CAO/AO to submit same to
the Committee and the
Auditor-General
2. The CAO/AO agreed to
submit the revised cadre with
the approval of the Board of
Directors, to the Dept. of
Management Services for
approval.
3. As per the Management that
there had been certain
difficulties in the past and
although their income had
gone down as a result, up to
June 2011, the Company had
been able to obtain a profit of
Rs. 8 million
4. Production process of the
Company was stopped due to
terrorist activities, and at
present company is in
progress.
5. Directed the CAO to look
into this matter and to submit
a report indicating whether
proper tender procedure had
been adopted and the
chairman had been instructed
to rectify this matter since he
had violated the Company
Act.
REPORT FROM THE COMMITTEE ON PUBLIC ENTERPRISES OF THEPARLIAMENT OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA______________________________________________________________________________
147
Date/Name of the
Institution and
Ministry
Major Issues/Problems Discussed Comments by the Sub Committee
& Decisions
September 16
th
2011
Sri Lanka
Accreditation
Board for
Conformity
Assessment
( Ministry of
Technology &
Research)
1. The Committee queried about
the not holding the Audit &
Management Committee
meetings.
2. No permanent staff in the
Internal Audit, and also half
yearly audit reports had not
been furnished to the Audit as
per the Finance Act 38 of
1971.
3. Corporate Plan for the period
2011 – 2015 had not been
prepared in terms of the PED
Circular No. 12 of 2nd
June,
2003.
4. Asia pacific Accreditation
Corporation had pointed out
33 shortcomings of the Board.
5. Training programmes had
not been conducted as
targeted in the Action Plan.
6. Audit opinion had not been
included in the Annual
Reports.
1. To hold at least one meeting
in every three months time
2. Delay in submitting audit
reports, and agreed to submit
them early.
3. Directed the CAO/AO to
take action to update it
verifying the shortcomings
pointed out by the
Committee.
4. As per the CAO/AO there
had been only 03 major
issues, and those had been
corrected. Board had
obtained the Membership of
the Asia Pacific
Accreditation Corporation &
International Accreditation
Corporation.
5. It has been revealed that, due
to the shortage of staff, the
Board could not conduct the
training programmes.
6. This situation should be
corrected in future.
PARLIAMENTARY SERIES NO. 119
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148
Date/Name of the
Institution and
Ministry
Major Issues/Problems Discussed Comments by the Sub Committee
& Decisions
September 16th
2011
Sri Lanka Cashew
Corporation
( Ministry of Minor
Export Crop
Promotion)
1. 2008 & 2009 Annual Reports
had not been tabled in
Parliament.
2. Corporate Plan for the period
2009 – 2013 had not been
prepared according to the
PED/12 Circular.
3. Internal audit reports had not
been furnished to the audit
and the Internal Audit unit is
not functioning properly.
4. The Committee observed that
a loss of Rs. 5,621,590 had
been incurred due to fire
broke out in the Haggala &
Mahaoya seed gardens and in
the Moneragala Estate, and
also serious damages had
been caused to the seed
nursery and the cultivated
land.
5. Cashew yield had been
dropped when compared with
that of private sector.
6. Considered on possible by-
products allied with the
cashew fruit.
1. Directed to take early action
to present them in Parliament
2. The CAO/AO was directed
to revise the Corporate Plan
as explained by the Auditor-
General and to submit to the
Committee and the Auditor
General
3. Directed to submit the report
very early and also to
streamline the functioning of
the Internal Audit
4. As per the explanation, due
to wind fire such a loss must
have occurred and further
stated that over the past
period, 100 acres of land in
Batticaloa was also
destroyed by wind fire.
5. Taken various steps in this
regard.
6. Preparation of cashew wine
had been already started. It
was said more funds need
to focus on other products.
REPORT FROM THE COMMITTEE ON PUBLIC ENTERPRISES OF THEPARLIAMENT OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA______________________________________________________________________________
149
Date/Name of the
Institution and
Ministry
Major Issues/Problems Discussed Comments by the Sub Committee
& Decisions
September 16th
2011
West Coast Pvt
Ltd.
(Ministry of Power
& Energy)
1. No permanent Chairman in
the Company.
2. All members of the Director
Board had not been present
for the COPE meeting.
Secretary to the Ministry of
Power & Energy explained that,
Attorney General had given a
ruling that no provision in the
Standing Orders to summon
them.
1. Earlier Chairman had retired
and a new Chairman is yet to
be appointed.
2. If the majority of shares are
owned by the Government,
such institutions could be
summoned before COPE.
October 14th
2011
National Housing
Development
Authority
&
National
Equipment and
Machinery
Organization
(NEMO)
Ministry of
Construction,
Engineering
Services, Housing
& Common
Amenities
1. Annual Reports for the years
2005, 2007, 2008 & 2009 had
not been tabled in Parliament.
2. Procurement Plan had not
been prepared.
3. Following shortcomings were
observed in the corporate plan
• Objectives as per the Act
had not been included
• How the targets could be
achieved was not made
clear
1. Directed to take early action
to table all the Annual
reports gone in to arrears and
the Annual Report for 2010
before the end of 2011.
2. To take action to submit
early
3. Directed to develop the
Corporate Plan as explained
by the Committee and to
prepare the Action Plan
based on the Corporate Plan.
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150
Date/Name of the
Institution and
Ministry
Major Issues/Problems Discussed Comments by the Sub Committee
& Decisions
National Housing
Development
Authority
&
National
Equipment and
Machinery
Organization
(NEMO)
Contd...
4. Sale of property at Liberty
Plaza to OVDC Institution
5. Land at Kirimandala
Mawatha, Narahenpita had
been sold to an Eco Housing
Project for Rs. 75 million in
2004 on Govt. valuation &
due to some problems another
valuation was taken in 2007
i.e of Rs. 121.5 million, in
which Director Board & the
Cabinet approval had been
obtained
6. Authority had incurred losses
continuously during the past 5
years.
7. Large number of
underutilized lands owned by
the Authority.
4. Matter had been referred to
the CID as per the previous
COPE directive; however
CID has informed no
criminal offence had taken
place, therefore the Ministry
had referred this to the
Attorney General. It has been
revealed that, the former
Chairman & the Director
Board had decided the value
without consulting the Chief
Valuer.
5. As per the COPE directive
Authority had not submitted
the required information,
directed to submit ; valuation
obtained earlier on this land,
the directive given to obtain
new valuation and the report
so received, and the cabinet
approval to sell the land
with all other necessary
documents.
6. Authority had faced a risky
situation due to incurring
losses, directed the
Management to pay more
attention on this.
7. To use those lands in a
manner to obtain revenue to
the Authority and submit a
detailed report regarding the
lands belonging to the
Authority island wide.
REPORT FROM THE COMMITTEE ON PUBLIC ENTERPRISES OF THEPARLIAMENT OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA______________________________________________________________________________
151
Date/Name of the
Institution and
Ministry
Major Issues/Problems Discussed Comments by the Sub Committee
& Decisions
National Housing
Development
Authority
&
National
Equipment and
Machinery
Organization
(NEMO)
8. NEMO also had incurred
losses during the past 5 years.
9. An estimated loss of Rs.
1,000 million had incurred as
a result of not following good
management practices, with
regard to the housing project
at Darley Road
8. Decision had been taken to
amalgamate NEMO with the
State Engineering
Corporation as a separate
division.
9. Directed to send a report on
this.
October 14th
,2011
State Development
& Construction
Corporation
(Ministry of
Construction,
Engineering
Services, Housing
& Common
Amenities)
Contd…
1. Corporation had submitted a
new Corporate Plan very
recently to the Auditor
General.
2. Construction revenue had not
been prepared in accordance
with the SL Accounting
standards.
3. Annual reports from the year
2007 had not been tabled in
Parliament.
1. After going through the
document Auditor General
would give the comments.
2. Auditor General was not
satisfied with the prepared
Accounts, directed to discuss
with the AG for further
clarification.
3. Directed to table all
outstanding reports before
the end of the year.
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152
Date/Name of the
Institution and
Ministry
Major Issues/Problems Discussed Comments by the Sub Committee
& Decisions
State Development
& Construction
Corporation
4. Due to non availability of
original receipts of the
deposits made by the
Corporation in external
Institutions, amounting to Rs.
2,755,878 in 2009 & Rs.
4,204,247 in 2010, it had been
doubtful to trace them.
5. Rent of Rs. 9.2 million and
Rs. 27 million in Devcoshowa
Company .
4. A team of officials had been
appointed to investigate the
receipts & to rectify the
matter.
5. Out of Rs. 9.2 million, Rs.
7.2 million had been
received as dividends.
Management has agreed to
obtain Rs. 27 million, once
the Liquidation had taken
place
REPORT FROM THE COMMITTEE ON PUBLIC ENTERPRISES OF THEPARLIAMENT OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA______________________________________________________________________________
153
Date/Name of the
Institution and
Ministry
Major Issues/Problems Discussed Comments by the Sub Committee
& Decisions
17th October,2011
Public Utilities
Commission
(Ministry of
Finance &
Planning)
1. Annual Reports had not been
tabled for the year 2008.
2. Internal Audit unit had not
been established. Post of
Internal Auditor had fallen
vacant.
3. 04 vacancies had been filled
without the approval of the
Salaries & Cadre Commission
and 18 officers had been paid
on the same grounds. The
CAO/AO stated that they had
done so, as per the provisions
laid down in the Act.
4. Legal position of the
Commission as a regulator of
water, electricity & petroleum
industries was enquired by the
Committee.
1. To expedite the presentation
of reports
2. Due to non availability of an
Internal Auditor, this unit
had not been established and
agreed to hold the meetings
after recruitment had done.
3. Commission should be
abide-by the Management
Services Circulars even
though there is a provision.
4. At present the Commission
has the Authority over the
Electricity Industry and
amendment to the Acts
should be carried out to have
the regulatory powers of
water & petroleum industries
PARLIAMENTARY SERIES NO. 119
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154
Date/Name of the
Institution and
Ministry
Major Issues/Problems Discussed Comments by the Sub Committee
& Decisions
October 17th
2011
National Livestock
Development
Board
(Ministry of
Livestock & Rural
Community
Development)
1. Annual Reports for the years
2008 & 2009 had not been
tabled.
2. Out of the 32 farms, 15 farms
had incurred a loss of
Rs.80,861,214/-.
3. Trade debtor balance up to
2010 had been Rs. 15 million
4. Enquired the position on the
shortage of food & cash
amounting to Rs.900,000/-
5. Dishonored cheques
amounted to Rs. 02 million
1. To take action to table all
outstanding Annual Reports
in Parliament
2. Most of the farms incurred
losses are in the dry zone
areas. Directed to take action
to make them profitable.
3. It has been revealed that Rs.
9 million debtor balances
have to be recovered
including the bad debts.
Directed to write off the
balances which could not be
traced after taking necessary
approval.
4. This fraud had taken place
over a period of time &
NLDB had handed over this
matter to the Legal
Authorities.
5. Matter has been handed over
to the CID.
6. The Committee
appreciated the high
standards maintained by
the new Management,
although there had been
lapses in the past.
REPORT FROM THE COMMITTEE ON PUBLIC ENTERPRISES OF THEPARLIAMENT OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA______________________________________________________________________________
155
Date/Name of the
Institution and
Ministry
Major Issues/Problems Discussed Comments by the Sub Committee
& Decisions
October 17th
2011
Institute of
Technology
Ministry of Higher
Education
1. Annual reports for the years
2009 & 2010 had not been
tabled in Parliament.
2. Audit & Management
Committees had not been held
for the year 2011
3. A Number of shortcomings
were observed in the
corporate plan for the period
2011-2015 and it had not been
approved by the Board of
Directors.
4. Differences had been
observed in the General
Reserve Account, Capital
grant Account, and the Fund
Account
5. Students intake had been
increased only from 350 to
360 in the year 2010
6. A large amount of Capital
grant had been underutilized.
1. To take early action to table
both reports
2. Directed to hold meetings
quarterly
3. Directed to prepare the
Corporate Plan in a way of a
rolling Plan and to revise it
annually
4. Directed to reconcile the
differences in the 2011
accounts
5. As per the AO, with the
present facilities available
Institute could not increase
the student intake
6. Directed to make use of
grants in full.
PARLIAMENTARY SERIES NO. 119
______________________________________________________________________________
Appendix E
REPORT FROM THE COMMITTEE ON PUBLIC ENTERPRISES OF THEPARLIAMENT OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA______________________________________________________________________________
156
Appendix E
Issues discussed at the meetings of the Sub Committee III (Education & Health)
of the Committee on Public Enterprises
Date/ Name of
Institution and Ministry
Major Issues and Problems
Discussed
Comments by the Sub Committee and
Decisions
July 22nd
2010
Institute of Indigenous
Medicine
(Ministry of Higher
Education)
1) Student drop out rate being increased. 1) Directed the Institute to discuss with the
Ministry of Higher Education, University Grants
Commission and University of Colombo to find
a solution and advised them to revise the
curriculum in accordance with the global
market.
2) A sum of Rs. 712,812 obtained from the WHO,
had been retained in a current account from 2006
to 2009.
2) The Committee was dissatisfied over the
situation and directed to submit a report.
3) UGC granted Rs. 2 million and Rs. 500,000 in
two instances for development of IT unit and
construct counters respectively but the institution
had not fulfilled the objectives.
3) The Committee directed the institute to
correct the situation and to report back to the
Committee.
4) Rs. 496,250 being incurred as lawyers fee paid
to private lawyers without getting the services of
the Attorney General’s Department, on certain
court cases.
4) Full report was called from the CAO on this
matter.
July 22nd
2010
Sri Lanka Ayurvedic
Drugs Corporation
( Ministry of
Indigenous Medicine )
1) The Committee observed that the net profit of
the Corporation had been decreasing gradually.
1) The Committee suggested adopting a new
methodology to increase the income of the
regional sales outlets.
2) Recovery of debts was unsatisfactory. Some
debts had been existing since 1999.
2) The Committee was not satisfied about the
situation and directed to certain corrective
measures to be taken to streamline the position.
3) The Committee considered the present position
of the accounting package which is being used by
the Corporation prepared by a private company on
a payment of a large some of money.
3) The Committee was of the view that the
situation should be corrected and directed them
to report back to the Committee with the
agreement between the Corporation and
Software company to see whether the company
had acted accordingly.
August 10th
2010
Sri Lanka Institute of
Advanced
Technological
Education
( Ministry of Higher
Education )
1) Institution had taken the value of a land and
buildings thereon of which the legal ownership
had not been vested to them, into their accounts
1) The Committee directed the CAO/AO to
regularize this matter.
2) The Committee noted that the institution had
recruited 3 Accountants, on an adhoc way, without
getting the required written approval from the
Treasury.
2) The Committee stressed that the verbal
approval can’t be treated as valid, advised the
CAO to look into this matter and obtain the
written approval.
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157
Date/ Name of
Institution and
Ministry
Major Issues and Problems
Discussed
Comments by the Sub Committee and
Decisions
August 11th
2010
National Transport
Medical Institute
( Ministry of
Transport)
1) The Committee noted that financial authority
had not been delegated to the Officials from the
year 2007.
1) Directed CAO/AO to act in accordance with
the financial regulations.
2) Organizational chart had not been registered
with the approval for the scheme of recruitment
not obtained.
2) The Committee directed the CAO/AO to
regularize this and to get the approval from the
Treasury.
3) Recovery of Rs. 415,000 and Rs. 3,847,091
from Metropolitan Bus company and the Kalutara
Driving School, not being done.
3) No action has been taken to recover the
money.
4) Asset Register had not been updated.
4) Directed to update the register.
5) The board of survey reports and the reports
pertaining to the value of stocks of the head office
and branches, not being submitted to the Audit.
5) Attention of the CAO/AO was drawn in this.
August 11th
2010
Postgraduate Institute
of Archeology
( Ministry of Higher
Education )
1) The Committee observed that there had been
variances between the budgeted figures and the
actual figures.
1) The Committee stated that the Institute could
have made this in order, by a supplementary
estimate or having a separate vote for this kind
of unexpected expenses.
2) The Committee noted that the shortages of
books were occurred in the library.
2) The Committee enquires what action had
been taken by the Institute. The CAO/ AO stated
that they had planned to computerize.
3) There had been a delay in releasing examination
results.
3) The Committee was not satisfied about the
situation and directed the CAO/AO to adopt a
new methodology.
September 15th
2010
Homeopathic Medical
Council
( Ministry of
Indigenous Medicine )
1) The Committee had observed the following
major short comings of the Council.
• Audit & Management Committee had not
been appointed.
• Annual reports had not been tabled in
Parliament from the inception
• Corporate Plan, Annual Action Plan &
budget had not been prepared
.
1) The Committee directed to discuss all the
matters with the Hon. Minister concern and
advised to rectify the shortcomings.
REPORT FROM THE COMMITTEE ON PUBLIC ENTERPRISES OF THEPARLIAMENT OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA______________________________________________________________________________
158
Date/ Name of
Institution and
Ministry
Major Issues and Problems
Discussed
Comments by the Sub Committee and
Decisions
September 21st 2010
Postgraduate Institute
of Medicine
( Ministry of Higher
Education )
1) The Committee noted that the Fixed Assets
Register was not properly updated.
1) The Committee directed to update the Fixed
Assets Register in accordance with the Sri
Lanka Accounting Standards.
2) The Committee noted that the Inventory items
valued at Rs. 8.7 million purchased by the institute
had been issued to external parties.
2) The Committee observed that the physical
verification was not done so far.
3) Without obtaining the approval from the
Treasury the Institute had invested money in fixed
deposits.
3) The Committee stressed their dissatisfaction
over it and advised to take requisite approval
before deposit money.
September 21st 2010
National Science
Foundation
( Ministry of
Technology &
Research )
1) The Institute had not taken action to fill the 59
vacancies owing to the lack of knowledge on
circular instructions.
1) The Committee was of the view that this was
a clear negligence of the Treasury representative
on the Board of directors and stressed that
he/she should have enlightened the institution
properly.
2) A contract worth Rs. 1.6 million for the
renovation of the sewerage system had been
granted without signing an agreement.
2) The Committee was dissatisfied over the
situation and CAO/AO agreed that such
shortcomings would not occur in the future.
3) Without following proper procurement
procedures, the institution had hired two motor
vehicles.
3) Satisfactory explanation was not given.
4) Rs. 24.8 million which had been spent for 186
projects.
4) The Committee observed that the follow up
action on research grants had not been adequate
and the respective ledger had not been updated
and computerized.
5) After obtaining research grants of Rs. 586,160
two lecturers had vacated posts and gone abroad
without refunding the money.
5) According to the signed agreement, they are
permitted to hand over the research to other
person in the team, but in this case, even that
was not happened. The CAO/AO agreed to
introduce new clauses into the agreements to
overcome such situations.
6) Two projects involving US $ 78,000 for the
improvement of the management of the coastal
system. The CAO/AO informed due to the
problem of co-ordination these projects were
halfway suspended and funds had to be returned to
the donor countries.
6) The Committee noted and advised the
CAO/AO that the officials had to be more
responsible and should take actions to minimize
these types of shortcomings.
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______________________________________________________________________________
159
Date/ Name of
Institution and
Ministry
Major Issues and Problems
Discussed
Comments by the Sub Committee and
Decisions
September 21st 2010
Provident Fund for
Buddhist & Pali
University
( Ministry of Higher
Education )
1) EPF benefits had not been paid within three
months to some of the employees, and noted that
they had been invested EPF money in the fixed
deposits and interest had been remitted after
deducting the withholding tax. Whereas the
interest should be deducted subject to providing
tax report.
1) The Committee directed the CAO/AO to
submit a report to the Committee within two
weeks time regarding this matter.
September 28th
2010
Postgraduate Institute
of English
( Ministry of Higher
Education)
1) Only one student had been able to complete MA
degree course.
1) The Committee directed the UGC Chairman
to discuss with the Vice Chancellor, Secretary to
the Ministry and other relevant officials and
ensure to adopt a new model, and also several
information were called for.
2) Contrary to the Establishment code a senior
Asst. Registrar had been paid Rs. 150,000 for
covering the duties of an Asst. Registrar.
2) The Committee was of the view that the PGIE
should have taken approval from the UGC for
such payments.
September 28th
2010
University of Colombo
School of Computing
( Ministry of Higher
Education)
1) Annual report for 2008 and 2009 had not been
presented in Parliament.
1) Directed to expedite.
2) Underutilization of funds received under SIDA,
Ph.D programme Rs. 51,999,948.
2) Only Rs. 26,019,570 had been spent
subsequently this moneys had been spent on the
relevant objectives.
September 28th
2010
University of Colombo
( Ministry of Higher
Education )
1) 83% of work of the proposed building for
clinical medicine of the faculty of Medicine had
been completed.
1) The Dean of the Medical Faculty showed his
dissatisfaction regarding the construction. The
Committee directed the CAO/AO to submit a
report regarding this matter.
2) The Committee noted that the Rs.677, 575,541
had been invested in state banks without obtaining
the Treasury approval.
2) The Committee wanted UGC Chairman to
have a discussion with the Treasury officials and
the Secretary to the Ministry regarding this
matter.
3) Annual Report for 2005 to 2008 not presented. 3) Directed to expedite.
4) Moneys not paid back by the officers went
abroad on educational purposes, breaching the
agreements entered into.
4) Directed to report with more information
September 28th
2010
Universities Provident
Fund/ Universities
Pension Fund
( Ministry of Higher
Education )
1) Universities Provident Fund had incurred a loss
of Rs. 332,789 due to investing of money in a
private bank.
1) The CAO/AO explained that they had a net
profit of Rs. 1 million. But the Committee was
of the view that, had they deposited money in
the fixed deposits in the state banks they would
have had more profit than this.
2) The Committee observed that the Provident
Fund had erroneously considered the other
allowances for as computation of contributions.
2) The CAO/AO stated that already they had
presented a Cabinet Memorandum to rectify the
error.
REPORT FROM THE COMMITTEE ON PUBLIC ENTERPRISES OF THEPARLIAMENT OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA______________________________________________________________________________
160
Date/ Name of
Institution and
Ministry
Major Issues and Problems
Discussed
Comments by the Sub Committee and
Decisions
October 1st 2010
National Youth
Services Council
( Ministry of Youth
Affairs)
1) Difference of Rs. 14,670,645 between the fixed
asset register and the subsidiary books and the not
submission of detailed schedules in respect of
fixed assets valued at Rs. 124,217,913 made to
the audit.
1) The Committee directed to submit a report
regarding this matter with copy to the Auditor
General.
2) Outstanding balances of Rs. 2,508,406
remaining for a long period.
2) The Committee directed to take action to
recover as much as possible and to get the
Attorney General’s opinion in this regard.
3) The Committee noted that the Buildings valued
at Rs. 88.2 million had been constructed on lands
not belonging to the council.
3) The Committee directed to take steps to get
the ownership of the lands immediately.
4) Investment of Rs. 4,032,360 had been made in
the Youth Services Company Ltd.
4) The Committee noted that they had not got
any benefit out of this investment.
October 1st 2010
&
September
14 th
2011
State
Pharmaceuticals
Manufacturing
Corporation
( Ministry of Health )
1) The Committee noted that the outstanding
debtor balance is Rs. 156,082,438 and out of that
Rs. 2,421,582 remained outstanding for 3 to 5
years.
1) The CAO/AO brought to the notice to the
Committee that the Ministry of Health had
agreed to settle Rs.2.3 million within two
months.
2). Data Base system installed for stock control of
the Corporation spending Rs. 13,744,174 had not
been properly functioning.
2). The CAO/AO stated that the supplier had
agreed to install a new version free of charge
October 12th
2010
J.R.Jayawardana Center
for Historical Research,
Archives and Library
( Presidential
Secretariat)
1) The Committee discussed about the Corporate
Plan , objectives, and functions of the Center.
1) The Committee directed to submit a
Corporate Plan, even though its objectives are
very limited.
2) The Committee observed that the Center had
not complied with the accepted Tender
Procedures.
2) The CAO agreed to look into this matter.
3) Rs. 9.7 million had been invested in Pramuka
Bank in 2002, but neither the interest nor the
principal amount had been able to be received by
the Center. The CAO stated that it had been loss to
the Center.
The Committee observed that Rs. 57.8 million had
been invested in non-governmental financial
institutions in the year 2008 in contrary to the
circular No. PED/33. The CAO/AO stated that due
to high interest rates, center had invested money.
3) The Committee considered this as a loss to
the Center.
Directed the CAO to invest these moneys in a
State Bank.
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161
Date/ Name of
Institution and
Ministry
Major Issues and Problems
Discussed
Comments by the Sub Committee and
Decisions
October 12th
2010
Mahapola Higher
Education Scholarship
Trust Fund
( Presidential
Secretariat)
1) The Committee questioned about the investment
of Rs. 4 billion in National Wealth Corporation
Company. Out of which no dividend received. But
the CAO stated that they had received nearly a
bonus of Rs.300 million.
1) The Committee wanted a report with regard
to the establishment of the National Wealth
Corporation and their transactions.
2) Find a methodology to recover the moneys
given to the students by way of grant when they
are employed.
2) Directed the CAO to look into this.
October 12th
2010
University of Visual &
Performing Arts
( Ministry of Higher
Education )
1) The Committee observed that out of
Rs.205 M and Rs.193 M provided for the
construction of the hostel only Rs. 5.9 M had been
spent for pre-preparation. The construction work
had not yet been started.
1) The Tenders had been called for and contracts
would be awarded end of this year. Committee
considered this as a serious delay.
2) The Committee observed that settlement of
advance amounting to Rs. 648,144 had been
delayed.
2) The CAO/AO brought to the notice of the
Committee that they had recovered majority and
there had been a balance of Rs. 59,000 / - to be
settled and this could be settled at the end of this
year.
3) 391 students qualified for the entrance not being
enrolled up to 30th
September.
3) Due to closure of University for various
reasons this has happened. Theses students will
also be enrolled in 2010.
April 8 th
2011
National Institute of
Co-operative
Development
( Ministry of Co-
operative & Internal
Trade)
1) The Committee observed that the construction
of the Auditorium initiated in 2001, paying Rs.2.2
million to a consultant, had not been completed
yet.
1) Directed to submit a full report to the
Committee very early, including also as to why
legal action had not been taken against the
Consultant.
April 8 th
2011
National Institute of
Language Education &
Training
( Ministry of National
Languages & Social
Integration)
1) Questioned as to whether any action had been
taken against the former chairman who had
violated rules and regulations.
1) Directed to take action based on the
investigation report.
2) Enquired about the present position of the
Corporate Plan
2) The Committee wanted the CAO/AO to send
the updated Corporate plan to the Committee.
3) The Committee questioned the presentation of
Annual Reports for the period 2008-2010 in
Parliament.
3) The Committee directed the CAO/AO to
streamline the presentation of the annual reports.
4) Auditor General pointed out that the Co-
operation rendered by the Institution towards the
officers of the Auditor General’s Department is
very unsatisfactory. The Committee was very
serious on this.
4) Disciplinary action should be taken against
the officers responsible for this matter.
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Major Issues and Problems
Discussed
Comments by the Sub Committee and
Decisions
April 8 th
2011
Gem & Jewellery
Research & Training
Institute
( Ministry of
Environment)
1) The Committee enquired as to what actions had
been taken with regard to the act of fraud
committed by a Senior Manager.
1) It has been revealed that the responsible
officer had been interdicted and actions had
been already taken to file a case against him.
1) The Committee raised the following matters.
• Out of Rs.36 million of treasury grants
only a very low percentage had been
utilized. .
• Additional fuel claimed by the Chairman
of the Institution contrary to the Para 02
of the Public Enterprises Circular No.50
of 28 July, 2008.
• The salaries of the Staff being increased
by the Chairman without the approval of
the Department of Management Services.
• The director General of the Institute had
taken a number of duty leave, without
forwarding the programme.
1) The Institute has ignored and disregarded the
Government Circulars and directed to adhere to
the Government Circulars instructions.
April 8 th
2011
Central Cultural Fund
( Ministry of Culture &
the Arts )
1) Observed that the Annual Reports for the years
2005, 2008,2009 and 2010 had not been presented
in Parliament
1) Directed to present all the outstanding reports
and to present in Parliament without further
delay.
2) Enquired as to why 1330 cheques for the value
of Rs.72,851,419 had been written when the bank
had no sufficient money and as to why action had
not been taken on cheques issued that had not been
presented for payment for over 06 months..
2) The Committee seriously considered this as a
clear violation of financial regulations.
April 8 th
2011
Institute of
Construction Training
& Development
( Ministry of
Construction
Engineering Services,
Housing and Common
Amenities)
1) Annual Reports since 2007, had not been
presented in Parliament .
1) Directed to present all the outstanding reports
in Parliament without further delay.
2) Actions had not been taken to recover
outstanding balances from NEMO, CHPB and
other institutions amounting to Rs.114.5 million,
Rs.4.1 million and Rs.2.5 million respectively.
2) Directed to submit a full report in this regard.
However the CAO stated that recovery of debt
from NEMO is doubtful.
3) Actions had not been taken to recover VAT
receivables amounting to Rs.1,128,270 from the
Dept. of Inland Revenue. Explanation is that even
though it was reminded, the Dept. of Inland
Revenue evades, the payment.
3) Responsibility of recovering dues should be
assigned to the treasury representative on the
board.
4) Due to unavailability of the original receipts
with the Institute, it was doubtful, to recover Rs.
1,722,563 of deposits made with external
Institutions.
4) Directed to discuss with the Treasury and get
cleared.
April 8 th
2011
Thurusaviya Fund
( Ministry of Plantation
Industries)
1) Even though the Corporate plan for the period
2011-2015 had been submitted, it had not been
compatible with the budget and also the Action
Plan is not in line with the Corporate Plan.
No Corporate Plan for the previous year had been
prepared.
1) The Committee pointed out that as the
institute was continuously running at a loss.
Existence of a proper Corporate Plan is very
vital.
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Date/ Name of
Institution and
Ministry
Major Issues and Problems
Discussed
Comments by the Sub Committee and
Decisions
April 8 th
2011
National Institute of
Plantation Management
( Ministry of Plantation
Industries)
1) Action plan for 2010 was not compatible with
either the Corporate plan or the budget and
moreover, the institute had been unable to achieve
some of the targets in the previous Corporate Plan.
1) A proper Corporate Plan should be prepared.
2) Non existence of internal audit division in the
institute and the non-receipt of internal audit report
by the Auditor General.
2) Audit is done by the internal audit of the
ministry and CAO/AO was directed to send the
reports to the Auditor General in time.
3) New strategies of Tea plucking introduced to
the workers in the field, is questioned.
3) Tea pluckers need to be trained ensuring the
durability of tea bushes.
4) Reduction in number of courses and the number
of students participated in 2009.
Reason for reduction of courses was due to
shortage of staff. As the industry was in a problem
due to world economic crisis, the industrialists did
not want to enroll these employees in training
programme.
April 8 th
2011
Tea Research Institute
of Sri Lanka
( Ministry of Plantation
Industries)
1) Corporate Plan had not been reviewed since
2008 in terms of the section 5:1:3 of the Circular
No.PED 12 of 02 nd June 2003 and the Action
Plan had not been prepared in order to meet the
targets in the Corporate Plan and Annual budget
also had not been prepared in line with the Action
Plan.
1) The CAO/AO agreed to take necessary steps
to revise the Corporate Plan and the annual
budget.
2). A sum of Rs.23,121,329 outstanding , caused
by breach of agreements by the officers who went
abroad.
2).The Committee directed the CAO/AO to
write off the amounts from the books after
obtaining the approval from the treasury.
3) Legal action had not been taken against the
external parties encroached an extent of 17.675
hectares of land belonging to the Tea Research
Institute.
3) Since these lands were being cultivated by
these people over generations, the Committee
directed to submit a detailed report within a
period of one month.
April 29 th
2011
Skills Development
Fund Limited
( Ministry of Youth
Affairs & Skills
Development
1) The Committee observed the following
shortcomings.
• Expenditure incurred on skills
development had been at a very low level.
• Number of Board Meeting held had been
decreased.
• No difference in the training programmes/
work shops held by the fund.
• The Audit & Management Committee
had not been conducted properly.
1) To set up an Advisory Board to prepare a
comprehensive report indicating future
programmes, and submit to COPE within one
month.
April 29 th
2011
Lady Lochore Loan
Fund
( Ministry of Finance
& Planning)
Contd…
Lady Lochore Loan
1) Following shortcomings were observed in the
fund
• Corporate Plans, Action Plans had not
been submitted to the audit for 2009 and
2010
• Delay in submitting financial statements
to the Audit.
• Non performing loan balances for over
10 years
1) Corrective measures to be taken.
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Major Issues and Problems
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Comments by the Sub Committee and
Decisions
Fund
• Number of vacancies not filled
2) Main objective of the Fund is to provide short
term loans to relieve indebtedness of the
Government officers
2) Priority should be given to the employees
who draw lower salaries and to extend this loan
scheme to other districts too.
April 29 th
2011
Information &
Communication
Technology Agency of
Sri Lanka
( Ministry of Tele
Communication &
Information
Technology)
1) Enquired about the presentation of annual
reports to Parliament. As a practice, ICTA submits
Annual Reports to Registrar of companies and
General Treasury.
1) All the Institutions funded by the Treasury,
should present their Annual Reports in
Parliament. The Committee directed to prepare a
comprehensive report obtaining advice from the
Ministry of Finance regarding the presentation
of annual reports in Parliament.
2) Corporate plans had not been submitted. 2) The Committee wanted the CAO/AO to
prepare Corporate plans for the period 2010-
2015 indicating the programme of work to be
implemented in the next couple of years.
April 29 th
2011
Sri Lanka Handicrafts
Board
( Ministry of State
Resources & Enterprise
Development)
1)The Committee observed that the Bambalapitiya
Show Room had been closed and sold to a private
party without obtaining the approval and the
buyer had been carrying out his business in the
premises without settling the balance payment of
Rs.2.1 million.
1)The Committee directed the CAO/AO to
prepare a comprehensive report with regard to
this transaction, to the Committee within two
weeks time.
2) Required number of the Audit & Management
Committee meetings had not been held in the year
2010.
3) Directed to hold required number of
Committee meetings as per PED Circular No.12
4) No Annual Reports after 2005 had been
presented in Parliament.
4) The CAO/AO stated that the reports upto year
2009 had already been prepared and would be
presented in Parliament as early as possible.
5) Number of unanswered audit queries. 5) Internal Auditor and the Accountant are
responsible for answering audit queries in time.
6) Out of the total carder, 52% had been in the
management level and 17% engage in sales duties,
affecting the work.
6) Emphasize the requirement of preparing a
new organization chart and carder to overcome
the situation, VRS should be introduced to the
rest.
April 29 th
2011
Ceylon Ceramics
Corporation
( Ministry of State
Resources & Enterprise
Development)
1) The Committee enquired the current position of
the institution
1) It had been decided by the Government to
lease out all the factories of the Corporation and
that the institution would be abolished at the end
of the restructuring process and compensation
also would be paid, to the existing staff.
2) Questioned about the total debtor balance of the
Corporation.
2) Rs.26 millions had to be recovered and all the
dues for creditors had been settled.
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Date/ Name of
Institution and
Ministry
Major Issues and Problems
Discussed
Comments by the Sub Committee and
Decisions
April 29 th
2011
National Insurance
Trust Fund
( Ministry of Finance
& Planning)
1) Several shortcomings were observed in the
Corporate Plan prepared for the period 2010 –
2014.
1) Corporate Plan should be reviewed and
amended to give realistic picture.
2) A loan of Rs. 537 million granted by the strike,
riot & civil commotion & terrorism fund under
concessionary terms to the Galadari Hotel Ltd.,
and the interest thereon remained without being
recovered over a long period of time.
2) It has been revealed that this loan had been
provided with by the National Insurance
Corporation at that time, and the Bank of
Ceylon had issued parata execution to the
Galadari Hotel Ltd., since the Bank of Ceylon
had been failed to recover this loan from the
Galadari Hotel.
June 17 th
2011
National Crafts Council
( Ministry of
Traditional Industries &
Small Enterprise
Development)
1) Out of the total amount of financial provisions
received from the Treasury only a small amount
had been utilized for the Craft Development,
which is one of the objectives of the Council.
1) Over the past years the Council had spent a
bigger part of the money allocated to it, for the
payment of salaries. But from 2011 an additional
amount of Rs.10 million had been allocated for
craft development.
2) It was observed that the training division had
been operated in a building rented out for a
monthly rental of Rs.24,000/- contrary to the
Cabinet decision of 23.12.2008.
3) Now they have built, their own building
3) Council is continuously running at a loss. 3) Mainly depend on the Treasury allocation
while making a small income by selling their
products and rendering service.
4) No Internal Audit unit is functioning and the
post of the Internal Auditor has fallen vacant.
4) Directed to recruit and Internal Auditor, early.
The Committee expressed its dissatisfaction
over the way of answering audit queries both in
verbally and in writing by the Council.
June 17 th
2011
Selacine Television
Institute
( Ministry of Mass
Media & Information)
Contd…
1) Legal framework of the Institution was
questioned by the Committee.
1) Cabinet of Ministers has decided to transform
the Institution to a limited liability Company,
but no action had been taken by the Institution
after submitting Articles of Association to
Attorney General’s Department in 2009. A
report has to be submitted within a month
indicating the future plans.
2) Annual Reports had not been tabled in
Parliament since 2006.
2) Although the Annual Reports prior to the year
2009 had not been prepared, the Annual Report
for 2009 was under preparation for presentation
in Parliament.
3) The Committee observed the following
shortcomings.
• Delay in submitting financial statements
• A register of fixed assets not being
maintained.
• Transactions valued at Rs.22,814,944 ,
Rs.26,187,747 & Rs.36,688,374 in the
years 2005,2006 and 2007 respectively
3) Directed to take action to correct them.
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Major Issues and Problems
Discussed
Comments by the Sub Committee and
Decisions
Selacine Television
Institute
could not be vouched due to lack of
evidence.
• The approval not obtained from the Dept.
of Management Services for the Staff
Cadre.
June 17 th
2011
Northsea Limited
( Ministry of
Traditional Industries &
Small Enterprise
Development)
1) The Committee queried about the expansion of
the company’s activities.
1) Cabinet had approved an amount of Rs. 152
million for the Development and Expansion of
Northsea Ltd., by which they could increase the
production by 300 M.tons of fishing nets per
annum, and also make 32,000 Nos. of people
from fishing community benefited.
2) An amount of Rs.5.5 million had been borrowed
from the Paranthan Chemicals, Paddy Marketing
Board, GA etc. and enquired the reason. Explained
that during the period 2001-2009 , as Northsea was
running at a loss, this amount had been borrowed
for a Tsunami Development Programme and all
the details had been furnished to the Ministry for
writing off this amount.
2) Directed to obtain the Treasury approval
before writing off.
June 17 th
2011
Rakna Arakshana
Lanka Limited
( Ministry of Defence)
1) The following shortcomings were noted in the
Corporate Plan and the Action Plan
• Corporate Plan prepared for the period
2007-2012 had not been in accordance
with the PED Circular No.12
• The organizational chart had not been
included in the Corporate Plan
1) Directed to revise the Corporate Plan.
2) Although the Government has granted Rs.05
million to the Company neither shares nor
dividends had been declared to date on this grant.
3) Directed to do the needful. The Committee
commended the good performance of the
Company.
June 17 th
2011
National Design Centre
( Ministry of
Traditional Industries &
Small Enterprise
Development)
1) Certain short comings had been observed in the
Corporate Plan and the Action Plan.
1) Directed to submit revised copies of the
Corporate Plan and the Action Plan as pointed
out by the Auditor General within two weeks.
2) It was observed that a loss of Rs.335,000/- had
been incurred on purchase of a Diesel Cab as the
lowest tender had not been accepted.
2) As the CAO/ AO stated that the technical
committee had rejected the lowest tender as the
tenderer had failed to provide the required
specifications.
3) Rs.4,018,738 and Rs.4,527,967 being receivable
and payable had been disclosing in accounts
without being settled for last 5 years and enquired
the reason for that.
3) The committee directed to see the possibility
to recover dues as much as possible before
writing off and to submit report to the committee
within 03 weeks time.
4) Laboratory in the Nattarampotha Project had
been idling due to lack of staff.
4) Directed to take appropriate action to recruit
required staff to overcome such difficulties.
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Date/ Name of
Institution and
Ministry
Major Issues and Problems
Discussed
Comments by the Sub Committee and
Decisions
August 26 th
2011
Tea Small Holdings
Development Authority
( Ministry of Plantation
Industries)
1) Following shortcomings were observed in the
Corporate Plan prepared for the period 2010 –
2014.
(i) Some of the objectives of the Authority had not
been included in the Corporate Plan
(ii) Objectives indicated in the Corporate Plan had
not been included in the Action Plan.
1) Take action to prepare a fresh Corporate Plan,
taking the future targets into consideration.
2) The Committee noted that out of the
miscellaneous debtor balance of Rs. 108,825,873
as at 31.12.2010 an amount of Rs.88,212,038 had
still been outstanding. and Rs. 74,001,948 out of
that outstanding amount had been due from the
Tea Shakthi Fund.
2) With the approval of the Board of Directors,
the Authority had written to the Treasury for
their approval to write off only a part of that
amount, and that advice of the Attorney General
had also been sought to take legal action to
recover the rest of the amount.
3) Mobilization advances to be recovered as at
31.12.2010 had been Rs. 12,968,728.
3) The Committee directed the CAO/AO to take
action to report with regard to these two
contractors to the ICTAD of the Ministry of
Construction, Engineering Services, Housing
and Common Amenities, explaining the matter,
and to report to the Committee on the action
taken by the ICTAD about these two contractors
4)The Committee noted that out of Rs. 25 million
granted as loans to buy colour separation machines
to 5 factories in the private sector and 3 factories
of the Tea Shakthi Fund in 1998, Rs. 21,640,455
remained unsettled as at 31.12.2010.
4) Directed to take legal action against these
factories.
5) Action had not been taken to recover Rs.
9,873,192 from the Tea Small Holdings
Development societies granted to purchase
vehicles on hire purchase basis.
5) Negotiations are going on.
August 26 th
2011
National Book
Development Board of
Sri Lanka
( Ministry of
Education)
Contd…
1) Cabinet has decided to amalgamate National
Book Development Board with the National
Library & Documentation Services Board
1) To explore the necessity of the existence of
the Board, the Secretary of Ministry of
Education had been directed by the Cabinet to
submit a detail report of action of the Board
2) The Committee also noted the following
shortcomings of the National Book Development
Board.
(a) The Board of Directors had not met for a long
time,
(b) The Corporate Plan had not been prepared,
(c) The building in which the books had been
stored, had not been properly maintained causing
serious damages to the books due to natural
causes.
2) Directed to streamline the above
discrepancies.
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Major Issues and Problems
Discussed
Comments by the Sub Committee and
Decisions
National Book
Development Board of
Sri Lanka
(d) Action had not been taken to distribute the
books among the schools.
(e) National Book Policy had not been formulated,
(f) Clear answers to the audit queries had not been
submitted.
August 26 th
2011
Civil Aviation
Authority
( Ministry of Civil
Aviation)
1) Since the Authority is governed by 2 Acts,
enquired the reason for that.
1) Act No. 34 of 2002 and the Act No. 14 of
2010 are interconnected; Authority had to
function in accordance with the provisions laid
down in both.
2) Why Sri Lanka should not have a separate
entity to conduct aircraft accidents Investigations.
2) Since Sri Lanka is too small to have a
separate entity directed to find the ways and
means to implement such an entity.
3). A sum of Rs. 321,194,081 had been invested in
Treasury bills and term deposits in 39 instances
without obtaining the requisite approval and
enquired the source of Income.
3). As per the CAO/AO the Authority receive
income from 03 main sources;
(a) Overseas Sales Surcharge, i.e. the amount of
US $ 60 received for each ticket sold outside Sri
Lanka.
(b) 2.5% being retained by the Authority from
the Embarkation levy.
(c) The interest received on investing cash
received from the above two instances
4). The Committee observed that as per the
Finance Act of 1971, the net surplus of the
Authority had to be credited to the Consolidated
Fund whereas the Authority had never done that
from the inception, and the surplus as at
31.12.2010 had been Rs. 609,650,657
4). The Committee directed the CAO/AO to
obtain maximum use of the money when
construction is in progress and also to do a cost
analysis before purchasing the air craft and to
obtain approval from the Treasury explaining all
their future plans.
August 26 th
2011
Tea Shakthi Fund
( Ministry of Plantation
Industries)
Contd…
1) The Corporate Plan for the period of 2008-2012
had not been compatible with the objectives and
the Action Plan was not in accordance with the
Corporate Plan. A new Corporate Plan for the
period of 2010 -2014, is now underway. The
Committee was dissatisfied with the procedure
adopted by the Fund when preparing the Corporate
Plan.
1) Report to be sent regarding the procedure,
followed when preparing the new Corporate
Plan.
2) The Committee observed that Annual reports
from Year 2005 to 2009 had not been tabled in
Parliament.
2) Report on the preparation and presentation of
the Annual Reports from year 2005 -2009.
3) According to the Auditor General, the
Committee observed that there was a large amount
of accounting irregularities that had been taken
place in the Fund.
3)Directed the CAO/AO to take action to rectify
all these deficiencies, with the assistance of the
officials of the Auditor General’s Department.
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Ministry
Major Issues and Problems
Discussed
Comments by the Sub Committee and
Decisions
Tea Shakthi Fund
The Committee also wanted the CAO to discuss
with the Hon. Minister about the functions and
the Shortcomings of the Fund and have a policy
decision whether to continue this Fund as a
separate entity or to amalgamate with the Tea
Small Holdings Development Authority and
report to the Committee.
September 09 th
2011
Sri Lanka
Sustainable Energy
Authority
( Ministry of Power &
Energy )
1) The Committee observed that two vehicles had
been reported lost. The AO stated that theses
vehicles had handed over to the line Ministry with
the written evidence. Ministry informed that these
two vehicles are not found in the Ministry.
1) Directed to submit a detailed report and if
theses vehicles are not found in the Ministry
premises to make a complaint to the police.
2) The Committee noted that Rs. 94,251,955 to be
paid to the CEB had not been shown in the
Accounts. The CAO/AO stated that these
transactions not reflect in the Accounts, as the
Sustainable Energy Fund considered as a separate
financial body.
1) Even though it is a separate entity, if this is a
liability of the Authority this amount should be
reflected in the balance sheet. The CAO/AO
agreed to correct it. Directed the CAO/AO to
submit detailed report with regard to the
Sustainable Energy Fund and Sustainable
Energy Guarantee Fund.
3) Capital Grant adjustments amounting to Rs.
15,000,000 and project expenditure amounting to
Rs. 167.77 Mn shown in financial statement could
not be vouched due to the non-availability of
proper documentation.
3) Directed to submit all relevant information
pertaining to this transaction to the Audit.
Progress of this matter to be reported to the
Committee.
September 09 th
2011
Ceylon Fertilizer
Co.Ltd.
( Ministry of Agrarian
Services and Wild Life)
1) The Committee observed that a sum of Rs.
15,391,201 had been spent during the period 1997
– 2001 for construction of Bio Diversification
Centre at Ambuluwawa, where the Board of
Directors had decided to write off this amount in 6
years, as this land does not belong to the company,
and also the Treasury approval had not been
obtained in this regard.
1) The Committee directed the CAO/AO to
discuss this matter with the Treasury, the
Ministry of Agriculture and the Ministry of
Cultural Affairs and take action to sort out this
matter.
2) The Committee observed that a debtor balance
of Rs. 8,807,311 had been written off by the
Company without obtaining the Treasury approval.
2)The approval of the Treasury had not been
received even though a request made to that
effect.
3) The Committee noted that the amount
receivable from the authorized dealers as at
31.3.2011 had been Rs. 23,217,583 out of which
Rs. 9,002,484 had remained for more than 9 years.
3) Had been referred to the Attorney General.
4) The Committee noted that the amounts to be
recovered from the Govt. Institutions as at
31.3.2011 had been Rs. 145,398,893 out of which
Rs. 49,727,858 had remained for more than 9
years.
4) The Committee directed the CAO/AO to
submit a report to the Committee indicating the
amount to be written off from the Govt.
Institutions, and the steps taken by the Company
to recover these outstanding balances.
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Major Issues and Problems
Discussed
Comments by the Sub Committee and
Decisions
September
14 th
2011
Sri Jayawardenapura
General Hospital
( Ministry of Health)
1) Enquired about the action that had been taken
against the officers who committed the fraudulent
action on professional fees amounting to Rs.
1,661,950. The CAO/AO stated that hospital
carried out a preliminary inquiry and handed over
the case to the CID for further action.
1) The Committee directed the CAO/AO to
report on the findings of the investigation.
2) No representation from the Auditor General’s
Department in the Audit & Management
Committee.
2) Directed to have a representation from the
Audit.
3) The Committee noted that there had been non
moving stocks value of Rs. 16,700,623.The
CAO/AO stated that these equipment had been
received from the inception and now not in usable
condition.
3) The Committee directed the CAO/AO to
appoint a committee to look into this and arrive
at a proper decision.
4)Recovery of professional fee from the
consultants. Proposals have been made to this
effect and the consultants have not agreed and two
of them have resigned from the Board on this
issue.
Fraud committed by an officer. Now the case has
been handed over to the CID
4) Directed to introduce a mechanism having
consulted the respective parties.
Directed to report on the findings
September 15 th
2011
National Film
Corporation
( Ministry of Mass
Media & Information)
Contd…
1).The Committee queried about Annual Report
for the past years.
1) Annual Report for 2009 had been submitted
to the Cabinet for approval, and agreed to
complete the 2010.
2) Although actions had been taken to submit the
Corporate Plans for 2012 -2015 a number of
shortcoming were pointed out.
2) Directed to correct it.
3) The Committee observed the following
shortcomings/weaknesses in the National Film
Corporation.
(a) Delays in presentation of Annual Financial
Statements
(b) Delays in replying to the audit queries,
(c) Responsibilities not being assigned to the
officials to carry out the duties,
(d) Collection of debts being in a very
unsatisfactory situation.
3) The CAO was directed to take early action to
rectify these shortcomings except the recovery
of loans.
4). Loan amounting to Rs.500,000 had been
granted by the Corporation in the year 2009 to a
cinema hall when there had been a sum of Rs.
404,719 due from them since the year 2002.
4). Directed to take legal action against the
Cinema hall.
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Major Issues and Problems
Discussed
Comments by the Sub Committee and
Decisions
National Film
Corporation
5).The Treasury Representative informed the
Committee that Rs. 50 million had been approved,
but the Corporation had not submitted their
Investment Plan to the Treasury to release these
funds.
5).The CAO/AO was directed to take early steps
to submit the plan.
September 15 th
2011
Ceylon Fishery
Harbours Corporation
( Ministry of Fisheries
& Aquatic Resources
Development)
1). Objectives indicated in the Act of in
Corporation had not been included in the
Corporate Plan prepared for the period 2011 –
2015, and also Action Plan had not been prepared
based on the Corporate Plan.
1). Directed to submit the Corporate Plan and
Action Plan to the Committee as well as to the
Auditor General after obtaining the approval of
the Board
2). Corporation had paid Rs. 2,791,215 as a 60%
advance to a private company in July 2007, to
supply 8 tanks valued each at Rs. 5,095,075, to the
Corporation. The tanks had not been supplied yet,
and also the files relating to the transaction had
not been furnished to audit.
2) This matter had been already referred to the
CID and the Attorney General. The Committee
directed the CAO to hold an impartial inquiry
and to take disciplinary action against the
officers involved, and also to submit a detailed
report to the Committee.
3). Action had not been taken to recover the
amount of Rs. 2,209,251 given on credit basis for
fuel. Corporation had filed 44 court cases, out of
which 34 had been with regard to recovery of
payments.
The shortcomings pointed out by the Committee at
the previous COPE meeting had not been
corrected. Opinion of the Auditor General had
been a disclaimer. Accounting statements to be
withdrawn due to shortcomings.
3) The Committee directed the CAO/AO to
furnish a summary of the 44 court cases and the
action to be taken in this regard to the
Committee within 3 weeks time.
Directed to take corrective action very early.
4) Hire charges had not been levied for loading
sand to the lorries, thus the Corporation had
incurred loss around Rs. 21,000,000.
4) Action had been to recover that amount and
the Corporation had already started levying the
hiring charges from the lorries
5) No effective duties had been carried out, even
after spending Rs. 224 million for the construction
at the Chillaw fishery Harbour.
5). To submit a comprehensive report on this
harbour to the Committee.
September 15 th
2011
National Institute of
Fisheries & Nautical
Engineering
( Ministry of Youth
Affairs & Skills
Development)
Contd…
1). Corporate Plan prepared for the period 2010 –
2013 had not been approved by the Board of
Directors.
2) Directed the CAO/AO to prepare the Action
Plan in line with the Corporate Plan, and after
obtaining the approval of the council, to submit
both documents to the Committee as well as the
Auditor General.
2)Audit & Management Committee had met only
once in the year 2011.
2) Directed the CAO/AO to see that it is met at
least quarterly, and to discuss all audit queries at
the meeting, before submitting the replies to the
audit.
REPORT FROM THE COMMITTEE ON PUBLIC ENTERPRISES OF THEPARLIAMENT OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA______________________________________________________________________________
172
Date/ Name of
Institution and
Ministry
Major Issues and Problems
Discussed
Comments by the Sub Committee and
Decisions
National Institute of
Fisheries & Nautical
Engineering
3) Audit opinion was a disclaimer for period 2006-
2010
3) Directed to consult the Auditor General.
4) Enquired the current position with regard to Rs.
6,712,171 to be recovered from the student as
course fee and hostel charges.
5) Rs. 80,000/- had been paid to a Fisheries
Training Asst. to follow a Postgraduate course,
where he had vacated the post, after following the
course.
4) Action had been taken to obtain the approval
to write off Rs.5.8 million out of the total
amount. Directed the CAO/AO to obtain
approval from the Treasury too.
5) To take action to recover this amount from
the guarantors, and report back to the Committee
September 15 th
2011
Sri Lanka Standards
Institute
( Ministry of
Technology &
Research)
1). The Committee observed that the 2008 & 2009
Annual Reports had not been tabled in Parliament.
1). Directed to take action to table 2010 Annual
Reports in Parliament, along with the backlog.
2). The Committee enquired as to why the Audit &
Management Committee had not been appointed
for the year 2010.
2). The Committee directed the CAO/AO to
hold the Audit & Management Committee
meetings at least once in every three months
time.
3). The cement imported by the Lucky Company
during the period 31st July, 2007 to 1
st July 2011,
were not in compliance with the SLS
specifications but had been released to the market
on 47 occasions.
3). The CAO/AO stated that the SLSI issued the
SLS certificate to this Company only in the year
2008, and that they had taken action to suspend
their SLS certificate in the year 2010.
September
15th
2011
Marine Environment
Protection Authority
( Ministry of
Environment)
1). Observed that the Corporate Plan prepared for
the period 2009 – 2013 had not been approved by
the Board of Directors.
1). Directed to submit all the information with
regard to the above Corporate Plan to the
Committee within two weeks.
2). Out of the approved cadre of 141, the actual
cadre had been only 87, and enquired the reasons
for not filling the vacancies.
2) Directed to fill the vacancies.
3) Out of Rs. 15.6 million received as fines by the
Authority, a sum of Rs. 11.6 million had been
transferred to the non-current liabilities while Rs. 4
million had been utilized for staff loan fund,
contrary to the Marine Pollution Prevention Act.
3). With the approval of the Director Board, the
Authority had used this money for an essential
purpose, and wanted the CAO to obtain treasury
approval.
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173
Date/ Name of
Institution and
Ministry
Major Issues and Problems
Discussed
Comments by the Sub Committee and
Decisions
September
15 th
2011
National Child
Protection Authority
( Ministry of Child
Development &
Women’s Affairs)
1) Construction of a Resource Center in
Kurunegala had been awarded to a contractor
without obtaining the TEC report and entering into
an agreement; the contractor had stopped the
contract half way. The AO stated that this had
been awarded by an error and work to the value of
only Rs. 82,880/- had to be completed.
1) The Committee directed to submit a detailed
report on the above construction work and also
to obtain a report from the Divisional Engineer
on this construction.
2) The Committee discussed about the Children
who affected from the Tsunami. Out of total No.
of 2661 Children in 10 districts only 264 had been
provided the Foster Parent facility, in terms of the
Tsunami( Special Provision) Act No. 16 of 2005
2) Committee directed to submit a report
including relevant information of the 264
Children, action taken and the present position
of them. Names and the addresses of the balance
2397 Children on the basis of the Divisional
Secretariat and the present position of these
children.
3) Of funds received for various projects Rs.
4,189,374 had been remained unutilized at
31.12.2008.
3) The Committee directed to submit a report
regarding projects - Dialogue Housing Project,
Tsunami Scholarship Assistance, Office of the
High Commissioner for Australia, UNICEF
Child & Youth Centre, ISPCAN Project, Office
of the British High Commission and the USA
University of Kelaniya.
4) National Policy on prevention of Child Abuse. 4) Its being prepared and the Child protection
act is also being amended.
5) Assets amounting to Rs. 19,471,699 which were
fully depreciated as at 01.01.2011, being used
without doing a revaluation.
5) Committee had been appointed to revaluate,
and such valuation would be taken to accounts.
September
15 th
2011
National Aquaculture
Development Authority
( Ministry of Fisheries
& Aquatic Resources
Development)
1) Assets amounting to Rs. 641,175 had not been
brought to the Head Office when the Authority
was shifted to Pelawatta.
1) The Committee directed to submit a detailed
report with regard to this matter.
2) Balances of assets and liabilities amounting to
Rs. 672,700,188 could not be satisfactorily
vouched / verified or accepted in audit due to non
availability of necessary documents
Auditor General stated that it should be recorded
in the inventory register, when the Authority
brings an asset.
2) The Committee directed the CAO /AO to
follow these instructions properly.
3) There had been an outstanding loan balance of
Rs.17,245 ,513 and Rs. 2,017, 679 for more than 2
and 5 years respectively.
3) Directed the CAO/AO to do an age analysis
and take necessary steps to recover.
REPORT FROM THE COMMITTEE ON PUBLIC ENTERPRISES OF THEPARLIAMENT OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA______________________________________________________________________________
174
Date/ Name of
Institution and
Ministry
Major Issues and Problems
Discussed
Comments by the Sub Committee and
Decisions
October 13th
2011
Cooperative Wholesale
Establishment
( Ministry of Co-
operatives & Internal
Trade)
1) Only one Audit & Management Committee
meeting held in the year 2011. 1) Directed the CAO/AO to see that the
Committee meets at least once in every months’
time.
2) Auditor General had disclaimed the accounts
for last 5 to 6 years, even in 2010 accounts they
had not taken any action to rectify this situation.
The Auditor General added that 10 audit queries
had been issued in the year 2010, but none of the
queries had been replied by the CWE. Assistance
given to the Audit officers by the CWE is very
low.
2) The Committee directed the CAO/AO to
summon the Board and review all these queries
and to submit clear answers to the audit.
3) The Committee observed
i. a large number of properties not economically
utilized
ii. Rs. 4397 million of bonds to be matured in
2016 in addition Rs. 4,063 million liabilities
reflecting in the financial statements but these
bonds not reflected in the accounts too.
iii. 88 employees not properly deployed.
3) Directed to rectify all these matters and to
make aware the Hon. Minister.
October 13th
2011
STC General Trading
Company Ltd.
( Ministry of
Co-operatives &
Internal Trade )
1) Committee enquired the debtor balance and the
CAO stated that as at today balance is Rs. 209
million.
1) Directed to take every possible steps to
recover the debtors.
2) Observed that the accounts for the years
2009/2010, 2010/2011 had not been rendered to
the audit.
2) Directed to submit the accounts to the audit
before 30th
April 2012.
3) The Committee questioned about the revenue.
The CAO stated that revenue had gone up to Rs.
150 million per month.
3) The Committee was of the view that the
progress of the STC had been satisfactory.
October 18th
2011
State Trading ( Co-
operative Wholesale)
Establishment
Company Ltd.
( Ministry of
Co-operatives &
Internal Trade )
1) Considering the performances, of the institute
the Committee observed that the institute had an
operational loss of Rs. 3.2 million and Rs. 3.1
million in 2010 and 2011 respectively.
Auditor General also pointed out that the going
concern of the Company is at a risk level.
1) The Committee suggested considering all
these facts, that this company may be
amalgamated with the Co-operative Wholesale
Establishment.
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175
Date/ Name of
Institution and
Ministry
Major Issues and Problems
Discussed
Comments by the Sub Committee and
Decisions
October 18th
2011
Employees Trust Fund
Board
( Ministry of Finance &
Planning)
1) Registration of self employed personnel in the
ETF was discussed under section 18 of the Act.
The AO stated that they had entered into an
agreement with the Samurdhi Authority in this
regard.
1) The Committee directed the CAO/AO to see
whether they could expand this scheme, and to
submit a report to the Committee.
2)Contrary to the Treasury Circulars the ETF
Board had paid to the staff Rs. 69.5 million and
Rs. 39.9 million as incentive allowance and
holiday pay respectively.
2) Directed the CAO/AO to rectify this issue.
3) A sum of Rs. 29,293,850 invested in Korea –
Ceylon footwear Company, Magpak and the
Veyangoda Textiles Company had been lost due to
the liquidation of those company.
3) These investment had been a loss to the
institution.
October 18th
2011
State Pharmaceuticals
Corporation
( Ministry of Health)
1) Discussed the pricing formula of drugs, the
CAO /AO stated that up to 2001 ,the Consumer
Affairs Authority had been regulating fixing
prices, but the practice had come to an end since
2001.
1) Directed the CAO/AO to submit a report
including the information what measures
adopted by the SPC to introduce the price
control and the rules and regulations adopted by
the Consumer Affairs Authority and as to how
this practice had ended.
2) Observed that out of stock of 135 million tablets
of Ferrous Sulpahte, 74 million tablets had been
issued to the patients through Medical Supplies
Dept. at a time, National Drugs Assurance
Laboratory had confirmed that the drug was
substandard.
The CAO/AO stated that in certain instances the
MSD had completed issuing of the drugs to the
hospitals before reaching the quality assurance
report and also the SPC doesn’t have enough
laboratory facility to check each and every
consignment.
2) Directed to discuss this issue with Hon.
Minister and other relevant authorities.
3) Corporation paid Rs. 5.4 million and Rs. 4.1
million respectively for the years 2008 and 2009
PAYE tax of the employees.
3) To Correct the situation after discussing with
the Treasury officials.
4) Out dated and substandard drugs worth
Rs.43,743,265 and Rs. 22,907,940 being written
off.
4) Suppliers who supply low quality drugs be
black listed.
October 20th
2011
Palmyra Development
Board
( Ministry of
Traditional Industries &
Small Enterprise
Development )
1) Discussed about the Corporate Plan, Action
Plan, Procurement Plan and the Budget too.
1) Directed the CAO/AO to rectify all these
shortcomings pointed out.
2) Observed that Rs. 16.9 million had been
incurred on plantation of seed, but progress had
not been made available.
2) Directed to submit the necessary information
to the Committee and Audit too.
REPORT FROM THE COMMITTEE ON PUBLIC ENTERPRISES OF THEPARLIAMENT OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA______________________________________________________________________________
176
Date/ Name of
Institution and
Ministry
Major Issues and Problems
Discussed
Comments by the Sub Committee and
Decisions
Palmyra Development
Board
Contd.
3) Capital grant has been spent in recurrent
projects for Palmyra handicraft training.
3) Directed to have separate allocation for this
projects
4) Due to non availability of records, 29 items in
the accounts amounting to Rs. 98,855,051 could
not be satisfactorily vouched.
October 20th
2011
National Library &
Documentation
Services Board
( Ministry of
Education )
1) Observed, that due to accounting deficiencies,
Auditor General is unable to express an opinion.
i. 77 posts including the Accountant post had been
vacant.
ii. 2009 accounts had been in a weak position and
2010 accounts had not been submitted to the audit
ii. Director General had been acting for over a
period of one year.
iii. Corporate Plan, Action Plan and the Budget
had not been prepared in accordance with the
Treasury circulars.
The CAO admitted the lapses and agreed to take
early action to rectify those matters.
1) The Committee showed their dissatisfaction
on the performance and the status of the
institution and directed the CAO to regularize all
theses matters.
PARLIAMENTARY SERIES NO. 119
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