Managing public finances, establishing good governance and creating a better public service

The nation needs to develop and execute guiding principles in areas such as financial discipline, industrial growth, resource management, transport, housing, education, employment for improving the quality of life of people and so on

By Lacille de Silva

Since independence, we have not been able to make a tangible improvement in the public sector. At the same time, due to petty political gains, the last Government too, though it was no longer tenable to inflate the public sector, expanded the number of ministries and departments and the cadre of positions without radically re-structuring the public sector meaningfully. 

The Constitution of the Democratic Socialist Republic of Sri Lanka together with numerous Acts passed by Parliament from time to time have set out specifically the required guidelines, the powers, the privileges and the legal foundation of the country. Was it that there are enough laws in the country but we have been dreadfully short of good people to fill the positions of authority and execute policies for the benefit of the people?

Didn’t the immoral, inconsiderate and opportunistic politicians and public officers disregard laws, etc. for personal gain? Why did career officers too fail to stand firm and discharge their duties and responsibilities without fear or favour in compliance with all the existing rules, regulations, etc.? 

According to the Constitution, Secretaries and others in senior positions now hold these appointments at the pleasure of the State. Haven’t the rulers therefore selected persons who had never worked in the public sector without sufficient capability, suitability, qualifications, etc. for the top posts?

On the other hand, corrupt politicians abuse their positions of public trust and authority. They engage themselves dishonestly for private gain and did nothing to eliminate corruption. Didn’t they create a notoriously corrupt country? Let me add that the cost of grand corruption in Sri Lanka has retracted economic growth and development. 

The National Movement for Consumer Rights Protection has requested the President and the Prime Minister by their letter dated 3 September that due to an ongoing inquiry by PRECIFAC, Rishard Bathiudeen should not continuously hold the same Ministry until the inquiries are over. Shouldn’t the Government consider this proposal favourably in the name of good governance? Why is the Government ‘feigning ignorance’ about it? Perhaps owing to these reasons there is a belief that the best business in the country is politics.

Various deficiencies 

As we know, there had been a healthy economy and a relatively strong institutional framework at independence. If so, what happened several decades after? The former Auditor General S.C. Mayadunne, a decade ago, in a report sent to the Speaker to be tabled in Parliament had raised various deficiencies such as neglect of duties, responsibilities, lack of supervision, etc. 

He had specifically highlighted that the responsibilities of the secretaries to ministries, secretary to the Treasury and the respective heads of departments, as accounting officers, had not discharged their primary duties satisfactorily. They preferred the old and archaic methods without reforms. Did they do that purely because their loyalty to those in power paid personal benefits? The new breed of senior state officers therefore wanted to be in the ‘good books’ of the politicians.

In the past, Courts had also taken up the position “It is common knowledge that various forms of bribery and corruption are rampant”. Courts had held the view that “administrators should be held responsible for the decisions they take”. 

Public officers are required to perform numerous duties in the interest of the people. Have they done all that as desired? If they had failed to do so, why shouldn’t the present regime take steps to investigate such extravagances, abuses, simply because the previous regimes had failed to hold them accountable for such exploitations? 

Now that a new Government has been elected, initiating probes into such abuse of power, etc. would no doubt be a deterrent too to prevent such recurrences in future. Can the Government be happy that they are on the right path against corruption with ingenuity?

Traditions, policies and ideals 

Furthermore, if the public service needs to be upgraded to serve the people, I have no doubt a greater commitment with sincerity is required to elevate it from its present deplorable state. Shouldn’t we therefore re-commit ourselves so that that traditions, policies and ideals that had been maintained by our predecessors in the past could be honoured, respected and observed by the new generation of public officers too? 

These are:

a. Accountability (A Constitutional requirement)

Article 52 (2): “The Secretary to a Ministry shall, subject to the direction and control of his Minister, exercise supervision over the departments of government and other institutions in charge of the Minister”. This necessitates the Ministers to be accountable for the success or failures of the Ministries they have been given. Secretaries to Ministries are also accountable to the citizens under this provision in the Constitution. 

b. Neutrality

In terms of Articles 32, 53, 61, 107, 165 every public officer, judicial officer and every other person who takes up employment is required under the existing law to take an official oath and subscribe the affirmation set out in the Fourth Schedule. It says “I will faithfully perform the duties and discharge the functions of the office of …. in accordance with the Constitution of the DSRSL”. Let me add, neutrality covers – political neutrality, fairness to public officers and the public and even equality of treatment. Equality demands fair and equal treatment to everyone without discrimination.

c. Transparency

The need to be transparent dictates that the members of the public are entitled to have access to operation and activities of the Public Sector. The new law approved by Parliament recently, the Right to Information Act, also strengthens this particular right of the citizen.

d. Due regard for public interest

Public Officers are servants of the General Public. Their conduct therefore should be characterised by courtesy, humility, respect for every person with due regard for the public interest. 

In terms of FR. 200 the final responsibility of ensuring that a proper system and adequate authority exist for all disbursements of public money rest with the Chief Accounting Officers (Secretaries to Ministries) and Accounting Officers as laid down in the financial regulations. 

In addition, FR. 126 requires the Treasury to maintain control and supervision over Government finance. Accordingly, it is the duty of the Treasury to set up a satisfactory system of financial administration that fulfils standards in regard to accounting, security and responsibility, which is performed in two ways:

a. By regulations, directives, and instructions that are generally acceptable; and

b. By instructing or advising Chief Accounting Officers of any special measures necessary in particular circumstances

In regard to losses sustained by the government, FR. 315 (3) specifically states a loss by reason of neglect or wilful fault on the part of any officer, in the custody or disposal of public money, stores, etc., the person will be liable to be surcharged with the amount. Why should public officers be reluctant to work on Boards, Corporations etc. if they had not acted contrary to laws, etc.?

COPE in several Reports had highlighted losses amounting to billions due to serious financial deficiencies owing to mismanagement in Ceylon Petroleum Corporation, SriLankan Airlines, Ceylon Electricity Board, etc. during the previous regime. The loss the country suffered through the hedging deal, VAT scam, etc. had been considered to be in billions. Do you know all this had exceeded far beyond the recurrent expenditure for education, health, and transport, etc.? 

Protection of public property 

The respected former Central Bank Deputy Governor had said all that misuse, abuse, etc. led to “a violation of public property”. Officers involved in public financial management are required to essentially comply with the Financial Regulations of the Democratic Socialist Republic of Sri Lanka. Article 28 (d) in the Constitution specifies – the fundamental duties and obligations of a citizen are “to preserve and protect and to combat misuse and waste of public property”. 

Furthermore, the Penal Code of Sri Lanka and the Act No. 12 of 1982 Offences against Public Property specifically provides that anyone is liable, whether a public servant or otherwise for offences such as mischief, theft, robbery, misappropriation or criminal breach of trust, cheating, forgery or falsification and attempt to commit any one of the above offences on any public property.

Do you know if an officer causes a loss to the Government owing to lack of knowledge or ignorance even, they cannot be excused for infringement or for non-compliance? It is, therefore, their duty to acquaint themselves with all the relevant circulars, etc. and protect public property although a large number of public officers, including citizens have not done so during the past several decades. The relevant act describes public property is – “property of the government, any department, statutory board, public corporation, bank, co-operative society or co-operative union”. 

There had been instances in the past decades where such officers had been personally held liable and disciplinarily dealt with for committing losses, errors or non-compliances. Why do they fail to initiate disciplinary action against such wrongdoers now? How did the culture of impunity come about in our country?

Commissions and omissions

The officers who have been appointed to serve on numerous boards are duty bound to inform the Treasury, if at any time, it appears to them that the assets of the Board/Corporation are dwindling due to mismanagement, inefficiency, etc. The report must in general cover areas – the nature and the extent of losses, the causes of the losses, the steps, if any, which are being taken by the Board/Corporation to prevent further such losses or to recoup the losses incurred.

If the board of directors fail to comply with the necessary financial regulations, circulars and other requirements, knowingly or unknowingly, they would then be held responsible. If they had authorised or permitted such losses, etc. to continue, it is nothing but correct to hold them responsible or answerable. Various acts of commissions and omissions on the part of Treasury representatives in numerous boards, corporations, etc. had been detrimental to the country. Aren’t they therefore responsible because they have been appointed by the Treasury to look after the interests of the Government of Sri Lanka?

Aren’t they paid several thousand for each sitting at a board meeting? Haven’t they broken or abused the public’s trust? Let me add that it is also the tardiness that is now in question. A senior public officer jested that some members had opened the mouth only to eat a piece of cake at these meetings! Why didn’t the Treasury send letters to the relevant officers to explain the reasons for their failure to act in keeping with the relevant laws?

May I also produce a pertinent extract from the findings in the Supreme Court Judgement of 4 June 2008 in SC FR Application No. 158/2007 annulling as a wrongful, unlawful and illegal the privatisation of the Sri Lanka Insurance Corporation Ltd. – “It is sufficient to say that the conscience of this Court is shocked by the manner in which the Senior Public Officers had handled the sale of a pivotal asset of the State, which belongs to the people of this country.”

Administration to fulfil the aspirations of the people 

However, the main objective of the administrative change of the Government too is to enhance productivity, increase efficiency. It will also be necessary that salaries of public officers need to be made more attractive. The Report of the Shelton Wanasinghe Administrative Reform Committee had proposed a “lean public service with a fat salary”. The lower grades in the public sector cannot make ends meet and they easily resort to bribery and corruption. The police are a case in point. Nevertheless, higher grades comfortably engage themselves in personal aggrandisement. Shouldn’t all that be stopped?

Shouldn’t the Government ensure a paradigm shift to create a “culture of excellence”? Shouldn’t we ensure values such as quality, productivity, cost-consciousness, timeliness and customer-oriented-ness?

I have no doubt we have good laws, appropriate institutions, etc. in order to make this the best-run democracy in this part of the globe. The nation now needs to develop and execute guiding principles in areas such as financial discipline, industrial growth, resource management, transport, housing, education, employment for improving the quality of life of people, etc. 

A UN team of experts in 1969 recommended the setting up of the Ministry of Public Administration to ensure efficient and effective public service including regional administration to fulfil the aspirations of the people. Have we been successful thereafter? No!