COPA flags Rs. 167 m cooperative fund loss, demands action on stalled loan recoveries

Thursday, 14 May 2026 00:04 - - {{hitsCtrl.values.hits}}

Officials say loan repayments stopped post-2015 after corporation began incurring losses
COPA finds over Rs. 31 m remains unrecovered from 28 Cooperative Societies that obtained loans from Cooperative Development Fund with repayment delays ranging from 12 to 59 years
Instructs officials to expedite drafting of a new Cooperative Act
Questions implementation of Rs. 50 m poultry initiative

Parliament’s Committee on Public Accounts (COPA) has raised serious concerns over financial irregularities and long-outstanding loan recoveries at the Department of Cooperative Development, flagging losses of over Rs. 167 million and ordering fresh action on delayed reforms.

The Department was summoned before COPA to review the National Audit Office triennial audit reports covering 2021 to 2023, the 2024 Auditor General’s report, and the institution’s current performance.

Although COPA Chairman and MP Kabir Hashim had informed the committee of his absence, the session was chaired by MP Chandana Suriyarachchi.

During proceedings, the Committee revisited recommendations made at its 5 August 2021 meeting and uncovered what it described as a major lapse involving a Rs. 167 million loss linked to a loan issued in 2013 from surplus funds of the Cooperative Development Department to the Building Materials Corporation.

Audit officials revealed that the funds had been released outside existing cooperative regulations. Department officials told the Committee that loan repayments had stopped after 2015 after the corporation began incurring losses.

Following deliberations, COPA decided to formally report the matter to Parliament for further action.

The Committee also heard that over Rs. 31 million remains unrecovered from 28 Cooperative Societies that had obtained loans from the Cooperative Development Fund, with repayment delays ranging from 12 to 59 years.

Officials explained that direct recovery action had become difficult because 22 of the 28 societies are registered under provincial cooperative authorities, limiting the department’s legal authority to intervene.

In response, the Committee instructed officials to expedite the drafting of a new Cooperative Act and include stronger legal provisions to recover outstanding public funds without further delay.

COPA also questioned the implementation of the Government’s Rs. 50 million poultry initiative, launched in 2024 to distribute one-day-old chicks to entrepreneurs as part of efforts to address the egg shortage.

Although the program was originally planned for nationwide implementation, the Committee was informed it had only been carried out in seven Divisional Secretariat areas in Gampaha.

The Acting Chairman directed officials to submit a comprehensive report explaining the limited rollout and reasons for the deviation from the original plan.

Several MPs, including Dr. M. L. A. M. Hizbullah, Dr. Janaka Senaratne, K. Ilankumaran, Ajantha Gammaddege, Chanaka Madugoda, Lal Premanath, T. K. Jayasundara, Sundaralingam Pradeep, Sunil Ratnasiri and a group of officials were present at the session alongside senior departmental officials.