ISSN: 1391 - 0531
Sunday December 16, 2007
Vol. 42 - No 29

Audit exposes misdeeds of corporations

An audit report of 20 Government corporations released recently has revealed several instances of accounting deficiencies and non-compliance with laws, rules, regulations and management decisions resulting in losses amounting to millions of rupees to the country.

The corporations audited by the Auditor General’s Department included the National Housing Development Authority (NHDA), the Sri Lanka Rupavahini Corporation (SLRC), the State Printing Corporation (SPC), the Mahapola Scholarship Trust Fund among others.

Some of the instances highlighted in the audit report with regards to the SLRC state that even though instructions had been issued for the collection of cash in advance for the telecasting of advertisements of candidates of the local government elections for 2006, Rs. 14,079,562 remained to be recovered due to telecasting of advertisements on credit basis.

It also noted that tsunami aid amounting to Rs. 23,301,814 had not been credited to the Treasury Fund. In the NHDA, the AG said it was observed during the course of a field inspection that the doors, windows and the wire netting of the security fence of the building complex (now abandoned) constructed in a land at Orugodawatte belonging to the Urban Development Authority (UDA), had been removed by thieves. The entire expenditure of Rs. 43.6 million incurred on this project by the Authority had become a fruitless expenditure.

In the Mahapola Higher Education Scholarships Trust Fund, the audit found that an attempt to set up a lottery to collect funds for scholarships had turned into a another financial fiasco. It said that two management agreements were entered into with two private companies by the Mahapola Higher Education Scholarship Trust Fund in November 2003 for starting a new lottery for the purpose of collection of money for the Fund.

The expenditure incurred by the Trust Fund in connection with this lottery up to December 31, 2006 amounted to Rs. 679,266. Nevertheless, no income whatsoever had been received by the Trust Fund from the lottery up to that date.

According to the agreement between the Fund and another company, that company has guaranteed a minimum lottery income of Rs 400,000,000 annually during the first three years. Nevertheless, no income had been received whatsoever by the Trust Fund from the conduct of the lottery.

The agreement entered into between the private company and the Mahapola Trust Fund had been terminated ex-parte by the said company, according to the audit report. However the same company had by a letter dated February 29, 2007 informed the Trust Fund that it should be paid a sum of US $ 14,425,000 out of the future earnings of the Trust Fund to the company due to the agreement being terminated. The matter remains unresolved.

The other institutions subject to audit include the Ayurveda Medical Council, the Sri Lanka Institute of Printing, Sri Lanka Ayurveda Drugs Corporation, Ceylon Hotels Corporation, Central Freight Bureau of Sri Lanka, The Public Service Mutual Provident Fund and the Energy Conservation Fund.

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