By R.M.B Senanayake –
The Division of Financial Responsibility and Accountability between the Minister and his officials must be in the law
Good governance is seen by economists as a key factor in ensuring national development and prosperity. It must find expression through indicators like reliability, predictability and accountability of decision-making. It involves such factors as the rule of law, transparency, accountability and public service ethics.
Accountability can be understood in two senses. In a narrow, technical sense it refers to the duty of the head of a department to account as ‘accounting officer’ to his or her Minister, the Auditor-General, and finally the Public Accounts Committee. At a basic level accountability means ‘to give an account’ of actions or policies, or ‘to account for’ spending and so forth. On a wider understanding accountability can be said to require a person to explain and justify – against criteria of some kind – their decisions or actions (D Oliver ‘Law, Politics and Accountability’ (1994) Public Law 238 at 246). It also requires that the person goes on to make amends for any fault or error and takes steps to prevent its recurrence in the future.
What is the position regarding these matters in our country today? There has been a total institutional collapse in them over the years since 1956. We need to restore the institutions and laws to ensure accountability
Last Sunday I referred to the important provisions of the Public Finance Act 2002 prepared by the World Bank which was not passed by the then government or the succeeding governments. Consider the controversy regarding the bank account maintained by the former Defence Secretary which credited the revenue from land sales to the account and also held a large amount of money exceeding what the Treasury normally allows departments to hold. These matters are laid down in the above draft law. The controversy arises because these matters are not laid down by law.
Law versus Convention. Which should it be?
Many matters in the British system of government are governed by conventions rather than laws. So even the financial accountability of Ministers is governed by convention. During the colonial period we followed this British tradition and gave financial powers to the Secretaries and Heads of Departments. These officers then had a personal responsibility for the propriety and regularity of the public finances for which they are answerable; for the keeping of proper accounts; for prudent and economical administration; for the avoidance of waste and extravagance; and for the efficient and effective use of all the available resources.” (D.E Smith). The Chief Accounting Officer is personally responsible, in areas for which the minister himself also remains responsible for it is still accepted that the elected minister controls the bureaucracy and is also answerable in Parliament for their actions. Such are the conventions in the UK. But conventions don’t work except in Britain and not even in countries with Anglo-Saxon traditions like Australia or Canada. So it is necessary to examine the position regarding financial accountability in other countries following the Westminster System like Australia, Canada, the UK and New Zealand.
Following convention, the respective responsibilities of the Minister and the officials were not made law in Britain. The same anomalous position remains in our system of government today as well. But this division of responsibility between the Minister and his Secretary and Heads of Departments must be clearly demarcated. It has not been left to Conventions even in countries like Australia, New Zealand and Canada. They have been laid down by law or at least by a Code of Conduct which is binding and enforceable by Parliament. There is the Canadian Financial Administration Act which delineates the respective responsibilities of the Minister and the officials. It lays down the Accountability of Accounting officers within the framework of ministerial accountability in section 16. In Canada, senior public servants, who are the heads of government ministries or departments, are given the title of Deputy Ministers. They still, however, receive their authority through elected ministers who are appointed by the Prime Minister with authority. While traditionally senior public servants are seen as carrying out acts in the name of the minister, they also have responsibilities under administrative law. Deputy Ministers in Canada are therefore not accountable to Ministers in all matters; they may also receive their own power and responsibility through the Canadian Financial Administration Act and are directly accountable for them.
Ministers Role in Financial matters
Some Canadian researchers suggest that Canadian Ministers take a more hands on role in managing their ministries than in other comparable democracies. In Sri Lanka Ministers do the same but covertly. They interfere in financial decisions that according to the Financial Regulations issued by the Treasury should be left to the officials and officials are powerless to resist them for under a politicized system of appointments to the public service they owe their appointments to the Minister or Prime Minister and are beholden to them. So if a Minister or Prime Minister wants to decide matters which constitute financial irregularities it is not only the official but also the Minister who should be held accountable. We must introduce such a provision by law to ensure good governance. For this, a law is necessary. Otherwise the talk about good governance is empty rhetoric. Haven’t there been allegations against previous Presidents and Ministers? What happened to them? Were they ever punished under the law for such irregularities? At most they were found guilty by Commissions of Inquiry and deprived of their civic rights by a Parliamentary Resolution. The Commissions packed not with impartial Judges but men known to be partial, were often accused of prejudice and seeking political revenge.
The Canadian Parliament in the 1970’s considered recommendations to transfer control and responsibility for departmental budget matters from ministers to senior public servants as prevails in Sri Lanka. It was thought that this would take out the political element from financial accountability and also make accountability more easily managed. The arguments against this move were just that decisions must be political if the voting public is to have any control over public management. It was also considered that if holding a public servant to account was given to a parliamentary committee, such as the Public Accounts Committee, as in our country, non-political enforcement of the responsibility was unlikely. Alternatively the recommendations were not implemented as Minister Wijedasa Rajapakhse knows about the detailed reports on financial irregularities he submitted as the Chairman of COPE a few years back.
A review of the principle of Ministerial responsibility in a contemporary context is therefore needed. Ministerial responsibility has become a great deal more complex than it was when most parliamentary democracies were established. Reconsideration of Ministerial responsibility is therefore necessary for it cannot be left to conventions of the British Constitution which is an unwritten Constitution. Prime Minister Howard of Australia published a guide to Ministerial responsibility. Prime Minister Rudd, in 2008, revised chapter 5 of this document, the Guide on Key Elements of Ministerial Responsibility (these standards were re-released by the Gillard Government in 2010). The new standards introduced obligations in dealing with lobbyists, investment disclosures, a bar on some lobbying activity for a period of time after serving as a minister, and a ban on fundraising. It did not, however, introduce any changes to the types of failures that Ministers should be accountable for.
Alternatively there may be a code of Conduct for Ministers which may or may not be enacted as a law. The Code might declare that:
- Ministers are answerable for all acts and omissions of persons and organizations acting under prerogative, legislative or contractual authority assigned to them. This means that Ministers are personally responsible for their own acts and omissions, and those of their staff and department heads.
- Ignorance of a matter does not excuse the minister, and ministers should have systems in place to ensure they are kept informed.
- Ministers must respond to questions about their responsibilities in Parliament, and use freedom of information law in a way that does not hinder appropriate public disclosure. This includes facilitating the attendance of their personal or departmental staff at parliamentary committees when requested. The Code should ideally be enforced by, or subject to the review, of an independent commissioner, such as a Parliamentary Ethics or Integrity Commissioner. In addition to non-political enforcement of a code of conduct, there are other elements of Ministerial responsibility for the Parliament to consider.
An effective Code of Conduct enacted into law is better. It needs to set out clearly and transparently the responsibilities of ministers. Such a set of principles serves to guide the activities of Ministers, and provide a set of agreed benchmarks to which the public can hold ministers. The principles should be set out in a public document and then incorporated into legislation. This is what the World Bank document “The Public Finance Act 2002 did. Most of the matters laid down in the Financial Regulations issued by the Treasury which are not considered as binding on Ministers are included as law. This seems to be the way forward.