By R.M.B Senanayake –
Allocation of Funds to the Provincial Councils should be on rational objective criteria
I refer to the news item “Wiggy asks for more” referring to the request of the Northern Provincial Council for more funds. It is time to consider a rational basis f allocation of funds to the Provincial Councils of the country. There is danger otherwise that in funding Provincial Councils kissing will go by favor and there may be discrimination against the PCs which have members of the Opposition parties. In the case of the Northern and Eastern Province unless funds are allocated on a rational basis there could be allegations of discrimination on grounds of ethnicity and religion. When the Provincial Councils were established there was also set up a statutory body called the Finance Commission.
The Finance Commission is to consist of the following Members
(a) The Governor of the Central Bank of Sri Lanka;
(b) The Secretary to the Treasury; and
(c) Three other members to represent the three major communities each of whom shall be a person who has distinguished himself, or held high office, in the field of finance, law, administration, business or learning.
The Finance Commission is charged with the task of recommending to the Government the basis of allocation of funds to meet the needs of the Provinces. The 13th Amendment which established the Provincial Councils set up the Finance Commission to carry out the allocation of funds to the Provincial Councils.
The Commission is responsible for the allocation of funds to the Provincial Councils based on such plans and budgets reviewed and evaluated by the Commission. Under the 13th Amendment the Commission recommends to His Excellency the President annually the principals on which funds allocated for the Provincial Councils by the Central Government should be apportioned among the Provinces. The Finance Commission is also expected to monitor the activities of the Provincial Councils to ensure the optimization of the usage of such funds allocated so that planned benefits will accrue to the province and its people”.
“The Government shall, on the recommendation of and in consultation with, the Commission, allocate from the Annual Budget, such funds as are adequate for the purpose of meeting the needs of the Provinces.
It shall be the duty of the Commission to make recommendations to the President as to –
(a) The principles on which such funds as are granted annually by the Government for the use of Provinces, should be apportioned between the various Provinces; and
(b) Any other matter referred to the Commission by the President relating to Provincial finance.”
The Commission is required to follow certain guidelines in allocating funds to the Provinces. It is required to do with the objective achieving balanced regional development in the country, and shall accordingly take into account-
(a) The population of each Province;
(b) The per capita income of each Province
(c) The need progressively, to reduce social and economic disparities; and
(d) The need progressively, to reduce the difference between the per capita income of each Province and the highest per capita income among the Provinces.
The President shall cause every recommendation made by the Finance Commission under the Article to be laid before Parliament, and shall notify Parliament as to the action taken thereon.
No Court or Tribunal shall inquire in to, or pronounce on, or in any manner entertain, determine or rule upon, any question relating to the adequacy of such funds, or any recommendation made, or principle formulated by the Commission.
I wonder whether the Finance Commission is carrying out its functions. I went to the website of the Commission but could not download its pages.
If the Finance Commission is functioning should not table its reports in Parliament? There is a danger that if funds are not allocated by the Finance Commission according to the principles set out in the law then the Ministers of the Central Government would allocate funds arbitrarily to them and create a problem of discrimination.
Hitherto development was centralized and funds were deployed by the Central Government on projects that the central; government decided on. But with the setting up of Provincial Councils funds are required to be deployed by the PCs. If the central government and the provincial councils were both engaged in development expenditure at the provinces there could be duplication. So the allocation of funds to the Provincial Councils and the expenditure at the district and provincial level is best done through the Provincial Councils. Te central government should confine itself to national projects which have to be defined rigorously.
In this structure legislated for by Parliament it is difficult to envisage a role for allocating funds to Members of Parliament to be spent in their electorates. They are for one thing not recognized entities for expenditure since they are individuals elected to be legislators not members of the Executive branch of the State. How can Parliament hold these MPs accountable for the expenditure from such allocations? Won’t this give rise to conflicts of interest? How can their expenditure from these grants be audited? Does the Auditor General audit the expenditure of the funds allocated to the MPs? If not how can public funds be monitored? The practice of doling out public funds to Members of Parliament to spend in their electorates is not a practice in any democratic country. The MPs are elected to be legislators not members of the Executive to be entrusted with public funds. Are they bound by the Financial Regulations of the Government? If so how are they to be held accountable? Are their reports to Parliament on how they spend these allocations? This practice of allocating money to MPs to be spent in their electorates must be stopped. The Auditor General should be required to audit the accounts. The funds for development should be channeled through the established institutions; like the Provincial Councils and the Pradesiya Sabhas not MPs who are elected to be legislators. Let’s get back to sound financial practices as in other democracies