By R.M.B Senanayake –
Are there adequate laws to hold the Ex-President and Ministers accountable for financial malpractices
Although there is much hype about corruption and the need to bring to book the corrupt Ministers, the Ex-President and his family; under what laws can they be financially accountable? In the case of fraud or embezzlement of funds there is the Penal Code and the common law offences. But is there a law governing or regulating financial management or financial accountability in the State?
The prevailing Financial Regulations are those coming down from colonial times when the scope of government was much less and where the power to spend money was entirely with the Secretaries (called Permanent Secretaries then). They were designated the Chief Accounting Officers of the Ministries which constituted a cluster of departments engaged in closely related functions. The Heads of the Departments were designated as Accounting Officers for their departments. The Ministers were not referred to in the Financial Regulations. The financial powers which included the decisions to buy goods and services and award contracts were vested only with Secretaries and Heads of Departments. They were expected to call for competitive tenders’ or quotations before making any purchases of goods or services. The tender procedure required them to select the best tenderer. These officials were permanent officials of the public service, selected on merit and not political appointments by the President or the Minister. So they had the independence to act according to the principles laid down in the Financial Regulations. The situation changed after 1956 and the constitutional changes of 1972. Effective power even in financial matters came to be exercised by the Ministers and the President instead of the Secretaries who were now their creatures. I remember once when I served in the former Ministry of Food the then Permanent Secretary K. Alvapillai writing a minute to the then Minister J.R Jayewerdene that financial matters relating to rice purchases were not his function but that of the Permanent Secretary.
But after 1972 the President and the Ministers took control of financial matters despite there being no law which gave them such powers which continued to be vested with the Permanent Secretaries and the Heads of Departments. They gave oral instructions to them which they expected them to carry out. They had to give no reasons for their directions which were always oral when the long colonial tradition was that all decisions be recorded in a file as a minute. So a situation arose where power was exercised without responsibility. The Ministers were not made responsible for the financial management of the departments under the Ministry.
The World Bank in the 1990s recommended a draft law called the Public Finance Act of 2002 fixing the responsibility on the Minister of Finance for over-all financial management including the Corporations and the Treasury was to assist him.
The draft law was not passed by the prevailing government or its successors and I believe it is in cold storage. The JVP should look into this matter and insist that the law should be passed for it lays down clearly the financial responsibility of the Ministers.
In the absence of such a law I wonder to what extent the ex-President who functioned as the Minister of Finance and the other Ministers could be held responsible and accountable for financial mismanagement, misuse of public funds and financial irregularities like the violations of tender procedures or disregarding the need for tenders altogether. The ex-President and the Ministers seem to have disregarded several Financial Regulations.
Our crisis is primarily one of first principles and the present hue and cry on corruption will not especially lend itself to holding the Ministers or the ex-President liable unless there have been embezzlement of public funds as in the case of Helping Hambantota where the funds received for tsunami relief were credited to the ex-President’s personal bank account. The actual workings of our political institutions and the propriety of their financial operations, areas are of vital importance just as the constitutional nature of the system of government- whether Executive Presidential or the Westminster system of Cabinet Government under a Prime Minister who is only the first among equals and is fully answerable to Parliament. The JVP should go into this matter in addition to reporting the undue wealth and corruption allegations to the Commission on Bribery and Corruption. It is good that the draft audit Commission law is to be passed. It is necessary to fish out the draft Public Finance Act of 2002 prepared by the World Bank and find out what happened to it