COPE First Report - 7th Parliament, 1st Session

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

PARLIAMENTARY SERIES NO. 119

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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


� 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


� 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


∗ 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


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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4

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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6

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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8

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


• 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.


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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.


______________________________________________________________________________

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.


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.


______________________________________________________________________________

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


Appendix A


______________________________________________________________________________

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


18


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


______________________________________________________________________________

19


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


20


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


______________________________________________________________________________

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


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


______________________________________________________________________________

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


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


______________________________________________________________________________

Appendix B


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.


to send replies within two

months.


______________________________________________________________________________

26

Date/Name of

the Institute

& Ministry


Identified


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.


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.


27

Date/Name of

the Institute

& Ministry


Identified


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.


in regarding all these

projects.


______________________________________________________________________________

28

Date/Name of

the Institute

& Ministry


Identified


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.


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.


29

Date/Name of

the Institute

& Ministry


Identified


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.


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


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.


______________________________________________________________________________

30

Date/Name of

the Institute

& Ministry


Identified


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.


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.


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.


31

Date/Name of

the Institute

& Ministry


Identified


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.


to see whether the filling

of these vacancies is

necessary if the

amalgamation of the

Institutions takes place.


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.


present all the outstanding

reports without further

delay.


get the issue solved with

the Ministry of

Agriculture.


submit a report on the

present position of this

issue within two weeks.


______________________________________________________________________________

32

Date/Name of

the Institute

& Ministry


Identified


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.


which was paid to 04 employees

who had been released to other

institutions had not been

reimbursed.


to take action to rectify

these shortcomings.


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.


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.


to submit a detailed report

on this within one month

time.


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.


assist the University when

the Corporate Plan is

prepared.


33

Date/Name of

the Institute

& Ministry


Identified


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.


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.


for the year 2010 had met only

twice.

3. A significant delay ranging from

01 to 03 years was observed in

completing researches.


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.


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.


______________________________________________________________________________

34

Date/Name of

the Institute

& Ministry


Identified


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.


take the assets back.


necessary approval to write

off this balance.

3. The CAO stated that legal

action would be taken.


35

Date/Name of

the Institute

& Ministry


Identified


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.


take remedial action to

settle these transactions.


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.


______________________________________________________________________________

36

Date/Name of

the Institute

& Ministry


Identified


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.



reports including 2009 as

early as possible.


to follow the guidelines

given in the Public

Enterprises Circular No.

12, when preparing the

Action Plan.


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


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.


37

Date/Name of

the Institute

& Ministry


Identified


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.


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.


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.


______________________________________________________________________________

38

Date/Name of

the Institute

& Ministry


Identified


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.


action would be taken to

settle the dues to get the

service of the auditors

again.


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


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.


39

Date/Name of

the Institute

& Ministry


Identified


the COPE

Rajarata

University of

Sri Lanka


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


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.


______________________________________________________________________________

40

Date/Name of

the Institute

& Ministry


Identified


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.


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.


report stating the action that

can be taken to improve the

Embilipitiya and

Valchchenai factories.


41

Date/Name of

the Institute

& Ministry


Identified


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.


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.


proper approval from the

Treasury to write off the

unrecoverable out standings.


______________________________________________________________________________

42

Date/Name of

the Institute

& Ministry


Identified


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.


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


report with regard to the

profits made from the year

1992 together with the

Management agreement

with the Wayamba

Plantations Ltd.


43

Date/Name of

the Institute

& Ministry


Identified


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.


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.


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.



difficult to recruit new

personnel for the existing

salary scales.


______________________________________________________________________________

44

Date/Name of

the Institute

& Ministry


Identified


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.


such reports without further

delay.

The Committee expressed

its dissatisfaction on this.


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.


45

Date/Name of

the Institute

& Ministry


Identified


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.


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.


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.


______________________________________________________________________________

46

Date/Name of

the Institute

& Ministry


Identified


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.


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.


CAO/AO to revise the

Corporate Plan including

new goals and to prepare the

Action Plan and the budget



47

Date/Name of

the Institute

& Ministry


Identified


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.


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.


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.


______________________________________________________________________________

48

Date/Name of

the Institute

& Ministry


Identified


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.


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.


49

Date/Name of

the Institute

& Ministry


Identified


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.


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.


CAO/AO to submit a report

regarding this matter.

6. Rector concerned had been

interdicted and the

investigations were under

way.


______________________________________________________________________________

50

Date/Name of

the Institute

& Ministry


Identified


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.


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.


Institution was transformed

to University of

Technology.

2. Action would be taken to

present both the reports in

Parliament very early.


informed that action would

be taken to acquire these

assets very early.


51

Date/Name of

the Institute

& Ministry


Identified


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.


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.


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


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.


send a report on this matter

within 03 months time.


CAO/ AO to get the existing

regulations changed in order

to make the activities of

Universities a success.

3.The Committee appreciates

the situation.


______________________________________________________________________________

52

Date/Name of

the Institute

& Ministry


Identified


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.


53

Date/Name of

the Institute

& Ministry


Identified


the COPE

Sri Lanka

Cricket

Contd...


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


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,


______________________________________________________________________________

54

Date/Name of

the Institute

& Ministry


Identified


the COPE

Sri Lanka

Cricket

Contd...


how the contracts were given to the

companies.

10. Payment of Rs. 650,000/- to

some officers was questioned.


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.


55

Date/Name of

the Institute

& Ministry


Identified


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.


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.


______________________________________________________________________________

56

Date/Name of

the Institute

& Ministry


Identified


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


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.


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….


the Annual Report for the year


Parliament.



to take early action to table

that in Parliament.



57

Date/Name of

the Institute

& Ministry


Identified


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.


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.


why the investments of the

Institute had gradually been cut

down.


vision and the objectives indicated

in the Corporate Plan had been

contradictory to those specified in


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.


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.


informed that at a discussion

had with H.E. the President

it had been decided to


______________________________________________________________________________

58

Date/Name of

the Institute

& Ministry


Identified


the COPE

Sri Lanka

Foundation

the Sri Lanka Foundation Act.


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.


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


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.


59

Date/Name of

the Institute

& Ministry


Identified


the COPE

Bank of

Ceylon

Contd...


Bank had granted Rs. 150 million

to Mahinda Offset Printers as a loan


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.


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.


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.


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.


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.


______________________________________________________________________________

60

Date/Name of

the Institute

& Ministry


Identified


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…


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.


why the 2009 Annual Report had

not been presented in Parliament.

1. Directed to prepare the

Corporate Plan as explained

by the Committee


2009 Annual Report had

been submitted to the


61

Date/Name of

the Institute

& Ministry


Identified


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


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…


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.


______________________________________________________________________________

62

Date/Name of

the Institute

& Ministry


Identified


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...


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.


following shortcomings in the

Foreign Employment Agency

Company (Pvt) Ltd, a subsidiary

company of the Foreign

Employment Bureau.


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.


CAO/AO to report on this

and to discuss with the

Hon.Minister with regard to

the necessasity to continue

with this agency.


63

Date/Name of

the Institute

& Ministry


Identified


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.


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.


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.


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.


the CAO/AO to explain

the position to the Auditor-

General.


______________________________________________________________________________

64

Date/Name of

the Institute

& Ministry


Identified


the COPE

August 23 ,

2011

Ceylon

Petroleum

Corporation

Ministry of

Petroleum

Industries

Contd...

1. The Committee queried about the

tabling of Annual Report.


why the vacancies had not been

filled.


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


CAO/AO to take action to

obtain Bank Guarantees

whenever essential.


65

Date/Name of

the Institute

& Ministry


Identified


the COPE

Ceylon

Petroleum

Corporation


there had been some transactions

taken place with some foreign

companies.


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


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


______________________________________________________________________________

66

Date/Name of

the Institute

& Ministry


Identified


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.



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.


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


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,


67

Date/Name of

the Institute

& Ministry


Identified


the COPE

State Timber

Corporation.


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.


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.


______________________________________________________________________________

68

Date/Name of

the Institute

& Ministry


Identified


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.


the CAO/AO to submit a

report on staff vacancies

and the recruitment

procedures to the

Committee.


69

Date/Name of

the Institute

& Ministry


Identified


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.


proper evidence to the audit

as well as the Committee

within two weeks time.


______________________________________________________________________________

70

Date/Name of

the Institute

& Ministry


Identified


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.


71

Date/Name of

the Institute

& Ministry


Identified


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.


the Annual Reports for 2008,

2009 and 2010 had not been

tabled in Parliament.


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


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


______________________________________________________________________________

72

Date/Name of

the Institute

& Ministry


Identified


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


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.


as early as possible.


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.


73

Date/Name of

the Institute

& Ministry


Identified


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.


______________________________________________________________________________

74

Date/Name of

the Institute

& Ministry


Identified


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.


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



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,


as early as possible.


revaluation process is under

way.


action has been taken to


75

Date/Name of

the Institute

& Ministry


Identified


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.


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.


______________________________________________________________________________

76

Date/Name of

the Institute

& Ministry


Identified


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.


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.


informed that it is expected

to implement some courses

after the completion of

construction work of the

Oluwil Port.


Authority had involved

with these construction

works upon Cabinet

decisions and for the


77

Date/Name of

the Institute

& Ministry


Identified


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



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.


informed that this had

happened during the



______________________________________________________________________________

78

Date/Name of

the Institute

& Ministry


Identified


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 .


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.


Cabinet approval.


79

Date/Name of

the Institute

& Ministry


Identified


the COPE

October 13,

2011

National

Building

Research

Organization

Ministry of

Disaster

Management

1. There are 27 vacancies in the

approved carder of 223.


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.


report on the abandoned

buildings and the others.


______________________________________________________________________________

80

Date/Name of

the Institute

& Ministry


Identified


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.


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.


81

Date/Name of

the Institute

& Ministry


Identified


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.


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.


names of the advertising

firms and the amount paid to

each firm from year 2009 to

2011.


______________________________________________________________________________

82

Date/Name of

the Institute

& Ministry


Identified


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

.


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.


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.


83

Date/Name of

the Institute

& Ministry


Identified


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


submit a comprehensive

report on this matter.

October 20,

2011

University of

Kelaniya

Ministry of

Higher

Education


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.


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


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.


______________________________________________________________________________

84

Date/Name of

the Institute

& Ministry


Identified


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.


informed that the party had

agreed to settle this amount

in installments and by then

Rs. 17 lakhs had been

recovered.


85

Date/Name of

the Institute

& Ministry


Identified


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.


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.


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.


annual reports in

Parliament.

2. Requests had been made to

settle the dues.


______________________________________________________________________________

86

Date/Name of

the Institute

& Ministry


Identified


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.


carder paying the attention

to the salaries of the

professionals when the

carder is revised by the

Dept. of Management

Services.


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.


action to recover the

amount that could be

recovered and, with the

necessary approval, to write

off the rest.


87

Date/Name of

the Institute

& Ministry


Identified


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.


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.


report on the acquisition of

lands.

5. Such a situation had arisen

as the Authority is acting in

contrary to its objectives.


______________________________________________________________________________

88

Date/Name of

the Institute

& Ministry


Identified


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.


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.


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


89

Date/Name of

the Institute

& Ministry


Identified


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/-


explanations for all such

resources.


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/-.


plan.


institute is in the process of

finding a suitable place to

build the institution.


______________________________________________________________________________

90

Date/Name of

the Institute

& Ministry


Identified


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.


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.


91

Date/Name of

the Institute

& Ministry


Identified


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...



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.


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.


Corporate plan.


management letter of given

by the auditors.


informed that most of the

loans are now being settled.


detailed report on these

outstanding.


______________________________________________________________________________

92

Date/Name of

the Institute

& Ministry


Identified


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.


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.


Police investigation is

underway and the


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.


to take early action against

this person and report back

to the Committee within

one month


93

Date/Name of

the Institute

& Ministry


Identified


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.


submit a report on how

much was given to the

Maga Neguma companies

and other outside

companies with or without

tenders.


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.


______________________________________________________________________________

94

Date/Name of

the Institute

& Ministry


Identified


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


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.


Appendix C


______________________________________________________________________________

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.


96

Date/Name of

Institution and

Ministry


Discussed


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.


______________________________________________________________________________

97

Date/Name of

Institution and

Ministry


Discussed


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


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.


98

Date/Name of

Institution and

Ministry


Discussed


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.


______________________________________________________________________________

99

Date/Name of

Institution and

Ministry


Discussed


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.


100

Date/Name of

Institution and

Ministry


Discussed


Sep. 21st 2010

Sri Lanka Accounting

& Auditing Standards

Monitoring Board


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


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.


______________________________________________________________________________

101

Date/Name of

Institution and

Ministry


Discussed


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.


102

Date/Name of

Institution and

Ministry


Discussed


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


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.


______________________________________________________________________________

103

Date/Name of

Institution and

Ministry


Discussed


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.


104

Date/Name of

Institution and

Ministry


Discussed


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


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.


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.


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.


______________________________________________________________________________

105

Date/ Name of

Institution and

Ministry


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


(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.


106

Date/ Name of

Institution and

Ministry


Discussed


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.


______________________________________________________________________________

107

Date/ Name of

Institution and

Ministry


Discussed


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


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.


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.


108

Date/ Name of

Institution and

Ministry


Discussed


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


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.


______________________________________________________________________________

109

Date/ Name of

Institution and

Ministry


Discussed


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.


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.


110

Date/ Name of

Institution and

Ministry


Discussed


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.


shortcomings in the Company.

(a) The Institution had not been constituted in

terms of the Company’s Act,


action to correct these shortcomings.


______________________________________________________________________________

111

Date/ Name of

Institution and

Ministry


Discussed


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.


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


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)


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.


112

Date/ Name of

Institution and

Ministry


Discussed


Decisions

September 19th

2011

Housing Development

Finance Corporation

(HDFC) Bank


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


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.


______________________________________________________________________________

113

Date/ Name of

Institution and

Ministry


Discussed


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.


114

Date/ Name of

Institution and

Ministry


Discussed


Decisions

November 14th

2011

SL Export Credit

Insurance Corporation


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


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.


______________________________________________________________________________

115

Date/ Name of

Institution and

Ministry


Discussed


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


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.


116

Date/ Name of

Institution and

Ministry


Discussed


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.


______________________________________________________________________________

117

Date/ Name of

Institution and

Ministry


Discussed


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.


118

Date/ Name of

Institution and

Ministry


Discussed


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.


______________________________________________________________________________

119

Date/ Name of

Institution and

Ministry


Discussed


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



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.


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.


120

Date/ Name of

Institution and

Ministry


Discussed


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.


______________________________________________________________________________

121

Date/ Name of

Institution and

Ministry


Discussed


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.


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)


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.


122

Date/ Name of

Institution and

Ministry


Discussed


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.


______________________________________________________________________________

123

Date/ Name of

Institution and

Ministry


Discussed


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.


124

Date/ Name of

Institution and

Ministry


Discussed


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.


______________________________________________________________________________

Appendix D


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


______________________________________________________________________________

126

Date/Name of the

Institution and

Ministry


& Decisions

19th August, 2010

Institute of Post

Harvest

Technology

(Ministry of

Agriculture)

1. Discussed the qualifications

of the higher level staff


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


127

Date/Name of the

Institution and

Ministry


& 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


______________________________________________________________________________

128

Date/Name of the

Institution and

Ministry


& 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


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


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.


129

Date/Name of the

Institution and

Ministry


& 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



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


Budget for the year 2011


______________________________________________________________________________

130

Date/Name of the

Institution and

Ministry


& Decisions

Colombo

Commercial

Fertilizer Co. Ltd



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


131

Date/Name of the

Institution and

Ministry


& 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


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


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


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


______________________________________________________________________________

132

Date/Name of the

Institution and

Ministry


& 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


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


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


133

Date/Name of the

Institution and

Ministry


& 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


presented to Parliament


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


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


______________________________________________________________________________

134

Date/Name of the

Institution and

Ministry


& 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


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…


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


135

Date/Name of the

Institution and

Ministry


& 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


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


______________________________________________________________________________

136

Date/Name of the

Institution and

Ministry


& 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


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


as soon as possible

3. pointed out the importance of

having collaboration with the

health sector

4. To table the Annual Reports

immediately


137

Date/Name of the

Institution and

Ministry


& 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



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


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


Committee should be


______________________________________________________________________________

138

Date/Name of the

Institution and

Ministry


& 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 &


Parliament

2. No Internal Audit unit in the

council


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


investigate & settle those

complaints within three

months time

6. Directed to participate in the

Board meetings in future


139

Date/Name of the

Institution and

Ministry


& 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…


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


______________________________________________________________________________

140

Date/Name of the

Institution and

Ministry


& 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


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.


prepare all the outstanding

reports and to present in

Parliament without

further delay

The Committee was


decided to convert the

system in order to facilitate

the activities of the

institution.


141

Date/Name of the

Institution and

Ministry


& 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


Directors due to short

comings

1. Directed the CAO/AO to

table completed reports in

Parliament within a period of

one month.


corrected one for approval

May 23 rd

2011

Manthai Salt Ltd.

( Ministry of

Industry &

Commerce


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.



Annual Reports in

Parliament early.


the Committee in this regard

and hand over the matter to

the fraud Bureau for further

investigation


______________________________________________________________________________

142

Date/Name of the

Institution and

Ministry


& 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.


143

Date/Name of the

Institution and

Ministry


& 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.


to look into this matter and

do the needful.


______________________________________________________________________________

144

Date/Name of the

Institution and

Ministry


& Decisions

May 24th

2011

National Institute

of Social

Development

( Ministry of Social

Services)




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)


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


importance of obtaining the

approval for the purposes as

such.


145

Date/Name of the

Institution and

Ministry


& 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


prepared.

1. The CAO/ AO was directed

to present all the outstanding

annual reports in Parliament



2011-2016 to the Committee.

May 31st 2011

Sri Lanka

Tourism

Development

Authority

( Ministry of

Economic

Development)





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.


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.


as prescribed in the PED

Circular.


submit a full report

indicating the age analysis on

this.


______________________________________________________________________________

146

Date/Name of the

Institution and

Ministry


& Decisions

September 13th

2011

Paranthan

Chemicals Company Ltd.

(Ministry of State

Resources &

Enterprise

Development)


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.


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


2012 – 2014 had been

prepared and submitted to

the line Ministry, the


CAO/AO to submit same to

the Committee and the

Auditor-General


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.


147

Date/Name of the

Institution and

Ministry


& Decisions

September 16

th

2011

Sri Lanka

Accreditation

Board for

Conformity

Assessment

( Ministry of

Technology &

Research)


the not holding the Audit &


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.



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.


______________________________________________________________________________

148

Date/Name of the

Institution and

Ministry


& Decisions

September 16th

2011

Sri Lanka Cashew

Corporation

( Ministry of Minor

Export Crop

Promotion)

1. 2008 & 2009 Annual Reports


Parliament.



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.


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.


to present them in Parliament


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.


149

Date/Name of the

Institution and

Ministry


& 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


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


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



______________________________________________________________________________

150

Date/Name of the

Institution and

Ministry


& 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.


151

Date/Name of the

Institution and

Ministry


& 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


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.


______________________________________________________________________________

152

Date/Name of the

Institution and

Ministry


& 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


153

Date/Name of the

Institution and

Ministry


& Decisions

17th October,2011

Public Utilities

Commission

(Ministry of

Finance &

Planning)


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


______________________________________________________________________________

154

Date/Name of the

Institution and

Ministry


& Decisions

October 17th

2011

National Livestock

Development

Board

(Ministry of

Livestock & Rural

Community

Development)



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.


155

Date/Name of the

Institution and

Ministry


& Decisions

October 17th

2011

Institute of

Technology

Ministry of Higher

Education

1. Annual reports for the years





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


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


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.


______________________________________________________________________________

Appendix E


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


Discussed


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.


______________________________________________________________________________

157

Date/ Name of

Institution and

Ministry


Discussed


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.


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


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.


158

Date/ Name of

Institution and

Ministry


Discussed


Decisions

September 21st 2010


of Medicine


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.


______________________________________________________________________________

159

Date/ Name of

Institution and

Ministry


Discussed


Decisions

September 21st 2010

Provident Fund for

Buddhist & Pali

University


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.


submit a report to the Committee within two

weeks time regarding this matter.

September 28th

2010


of English


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


School of Computing


Education)

1) Annual report for 2008 and 2009 had not been


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



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


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.


160

Date/ Name of

Institution and

Ministry


Discussed


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.


______________________________________________________________________________

161

Date/ Name of

Institution and

Ministry


Discussed


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


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


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.


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.


162

Date/ Name of

Institution and

Ministry


Discussed


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.


______________________________________________________________________________

163

Date/ Name of

Institution and

Ministry


Discussed


Decisions

April 8 th

2011


Plantation Management


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


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


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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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


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


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


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.


______________________________________________________________________________

165

Date/ Name of

Institution and

Ministry


Discussed


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.


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.


166

Date/ Name of

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Ministry


Discussed


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


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


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.


______________________________________________________________________________

167

Date/ Name of

Institution and

Ministry


Discussed


Decisions

August 26 th

2011

Tea Small Holdings



Industries)

1) Following shortcomings were observed in the


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.


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.


168

Date/ Name of

Institution and

Ministry


Discussed


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


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.


______________________________________________________________________________

169

Date/ Name of

Institution and

Ministry


Discussed


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


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.


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.


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.


170

Date/ Name of

Institution and

Ministry


Discussed


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.


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.


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.


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.


______________________________________________________________________________

171

Date/ Name of

Institution and

Ministry


Discussed


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


2015, and also Action Plan had not been prepared


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


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.


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


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.


172

Date/ Name of

Institution and

Ministry


Discussed


Decisions


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.


______________________________________________________________________________

173

Date/ Name of

Institution and

Ministry


Discussed


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


( 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.


174

Date/ Name of

Institution and

Ministry


Discussed


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.


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


Discussed


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


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.


176

Date/ Name of

Institution and

Ministry


Discussed


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.


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Documents

COPE First Report - 7th Parliament, 1st Session