By C. Ramachandra FCA
I refer to the press conference given by the Auditor General Gamini Wijesinghe on 7 February, before the Local Government elections, where he thought fit to inform the public of the shortcomings in the Treasury.
I believe this is the first time an AG addressed the media to discuss the affairs of a client. If he had compiled a report on the falsification of accounts in the Treasury over the past decade, he should have tabled it in Parliament first and not made a media circus of it.
Please consider the following facts.
1. According to my knowledge, a professional auditor cannot disclose the affairs of a client, unless required to do so by a court of law.
2. The Auditor General is accountable to report to Parliament, under and in terms of the Constitution. I have not observed any previous Auditors General addressing the media.
3. Such an incredible difference between 10 trillion and one trillion just cannot be, as monies come via banking channels and thus get accounted for.
4. IMF and foreign credit agencies carry out incisive due diligence of the data. If this was the case, they would have reported so, even if the difference was a lot less. They had not done so.
5. If the Fiscal Management (Responsibility) Act No. 3 of 2003 is correctly processed, then it has to disclose the level of borrowings, including those of government corporations and companies. I believe such reports had not been properly processed.
6. An unqualified Audit Certification (year 2005 had been adversely qualified) had been given on the government accounts for year 2006 by a previous Auditor General P.A. Pematilaka, notwithstanding an adverse special report under Article 154 (6) of the Constitution by the former Auditor General in July, 2006, whereas P.A. Pematilaka had been Director General State Accounts at the Treasury until October, 2006, and could not have audited his own accounts.
7. On a challenge of the Appropriation Bill in 2008, the Supreme Court directed that the government borrowings be disclosed, and thus a second schedule of borrowings, was included in the Appropriation Bill.
8. The debt service (capital and interest) had not been shown in the Appropriation Bill previously.
9. In recent years, debt service (capital and interest) had been almost equal to gross income, thus borrowings financed, expenditures, investments, and losses (eg: hedging deals).
10. Hence, a proper accounting, including debt service (capital and interest) and losses should have been done and that would have shown the correct position, without such a pronouncement of an incredible difference, creating panic.
11. Such pronouncement by the Auditor General, with media hype, will disturb Lenders to the Government and even shake the confidence of depositors of state banks and adversely affect Foreign Direct Investments, which he should know.
12. Also the Auditor General had made such public pronouncement particularly at a time of an election, which may be interpreted as a violation of election laws by a high ranking public servant.
13. The Auditor General is also a Member of the Council of the Institute of Chartered Accountants of Sri Lanka, who have failed to take any disciplinary action against miscreant auditors in instances of complicit frauds, as had been pronounced upon by the Supreme Court.
I understand that a political party has reported the AG to the Commissioner of Elections for using this press conference to ridicule previous finance ministers of the country in order to obtain narrow political mileage. I am also aware that a complaint has been lodged with the Institute of Chartered Accountants in respect of the conduct of the AG.