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Wednesday, February 28, 2024

Plunder and squander of public funds

[Photo: Restrictions to NGOs; but hundreds of Foundations in the name of Ministers are gathering contributions …]

Financial Regulations were referred to as the ‘Bible’ of the public service while Administrative Regulations were no less hallowed. Today, unbeknown to the citizenry, key members of the ruling administration are making a mockery of both.

Vital processes are being overruled and overridden, often by persons who have neither legal nor legitimate right to deal with public funds. They seem to enjoy “special” political patronage that lets them circumvent the Ministry of Finance, the Cabinet of Ministers and even Parliament in deciding how the taxpayers’ money should be spent, or truth be told, frittered away. The public must hold them to account; but obviously they cannot.

The Sunday Times (Political Commentary) of August 10, 2014, exclusively exposed how the Monitoring MP for the External Affairs Ministry is contracting US lobby firms on behalf of the Government. The companies have cost the country millions of dollars but the transactions came to light only through mandatory filings in the US.

The disclosures, made by lobby firms under the US Foreign Agents Registration Act, show that the Monitoring MP gave his personal address in documents. The premises at Dudley Senanayake Mawatha, Colombo 8, are now occupied by the Korean International Cooperation Agency but had earlier housed Cosmos Aviation, of which the MP is a director. Americans can access this information on the web.

By contrast, the taxpaying Sri Lankan public know nothing. They don’t know that lobby firms were hired to do the job of an embassy; why particular agencies were favoured over others; the basis for terminating the contracts with earlier companies and their performance appraisals; if Cabinet had been notified and its approval obtained; whether budgets had been predetermined and approved by Parliament; how and why an MP was chosen to act for the Government and not the country’s diplomatic mission and so on. This week the Political Editor refers to contracts entered to in the US by the Central Bank. The information comes from the US where this information is public. Not so here. Why not?

The Sri Lankan public must demand to know. The fact that an official address was not listed in transactions purportedly made on behalf of the State is not only irregular but raises reasonable suspicion of wrongdoing. Perhaps the Government MP had felt due process was unnecessary in a situation where the rulebook was brazenly flouted. හැන්ද අතේ තියෙනකොට කාගෙන් අහන්නද ?  ’(Who is there to ask permission to be served when the spoon is in your hand) is a pithy local saying to describe what’s going on.

The example of how Industry and Commerce Minister Rishad Bathiudeen repeatedly approaches foreign governments for money, circumventing the Ministry of Finance and Planning is a textbook case of sheer disregard for standard financial regulations. He has written directly to the leaders of Pakistan, Saudi Arabia, Bahrain and Kazakhstan seeking funds to build houses for displaced Muslims in the North. He secured a payment of US$1 million from Pakistan and is expecting more contributions.

The Minister defends his actions by saying the money was channelled via the External Resources Department to the Ministry of Economic Development for implementation of housing projects. He contends that there is nothing wrong with him or anyone else canvassing for funds so long as it ends up with the Government.

But the Government, which turns a blind eye to Minister Bathiudeen’s actions, takes an opposing stance when the Northern Provincial Council wants to seek its own funding to develop the North. In no uncertain terms is that allowed. Imagine a situation where every provincial council in the country did the same, leave alone every one of the 70 Ministers, 40 Deputy Ministers and MPs selecting their pet projects regardless of what the national priorities were, overlooking accepted procedure, bypassing the relevant Ministry and approaching foreign Governments and agencies for financing?

The Government has taken fresh interest in funds entering the country for certain non-governmental organisations (NGOs) and threatened that the law will be amended to give authorities the right to review NGO financing. But hidden away from the eyes of any monitoring agency, hundreds of Foundations — set up through Private Members’ Bills in Parliament and in the name of certain Ministers — are gathering contributions and carrying out “projects”. It is not known how much of their collections go towards genuine causes and how much is “lost in the pipeline”. They are, quite simply, operaTting within a lacuna, a grey area. Neither the NGO Secretariat, nor Parliament nor the External Resources Department is responsible for how much money comes to them, from where or what it is used for. Perhaps this is why the number of such groups has increased dramatically in recent years.

If the three-page circular Treasury Secretary P.B. Jayasundera wrote in June is any indication, the Ministry of Finance and Planning is already in a pickle. The letter was addressed to administrative heads of ministries, provincial councils, departments, local government institutions, public corporations, statutory boards and district secretariats. It was also sent to all development partners.

The Head of the Government Treasury warns them against formulating project proposals for obtaining foreign funds without following the due process, including prior consultations with his ministry. It is a violation of the Foreign Loan Act which precludes any government agency from dealing directly with foreign agencies in formulating project proposals or in the latter stages of project implementation without Treasury approval.

The circular points to a systematic problem that was grave enough for the Treasury to step in. Everyone in power and place – some Ministers, fly-by-night businessmen with influence to the “top echelons”, ever ready for a shady deal, even corporation chairmen, it would seem, were “chasing projects” and it was throwing national planning off kilter. Curbing this waywardness has become all the more crucial because Sri Lanka, after achieving middle income status, has a limited pool of resources to tap. What is available must be carefully matched with national priorities, something tasked to the Ministry of Finance and Planning.

But when it comes to public finances, it is becoming more commonplace now for a few with carte blanche licence to decide how the money should be begged or borrowed, and spent, no questions asked — and no questions answered, either
The Sunday Times Editorial


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