FRAUD: Postal dept. loses Rs. 30 million

  • Documents burned before audit nProcedures not followed in awarding contrac
By Damith Wickremasekara

No action has been taken against persons responsible for the loss of an estimated Rs. 30 million caused to the Postal Department. Three months after a top level inquiry revealed a fraud which deprived the government of an estimated revenue of Rs. 30 million in the disposal of business mail –a system adopted for institutions such as the Telecom, mobile phone companies and banks to send their bulk mail. No action has been taken against those responsible.

Cover of the investigation report The agreement signed by K.A.S. Senadheera

A two-member committee investigated into whether proper procedures had been followed in awarding a contract to a private company -Toppan Forms (Colombo) Ltd- for the disposal of business mail, whether the department had suffered a loss by introducing the system and as to who was responsible.

The Committee in its report said the Secretary to the Ministry of Posts had only endorsed a proposal made by the Acting Post Master General Shervin Senadheera. No authority had been received either from the Ministry or from the Cabinet to implement the proposal.

The report points out that under the proposal, postal rates had been reduced. Such a decision needs Finance Ministry approval and the sanction of Parliament which needed to be gazetted. It goes on to add that between the period 2003 and 2007 government may have suffered a loss of Rs. 30 million. All documents pertaining to that period are reported to have been burned without being submitted for audit.
During a sudden check, investigators discovered a number of letters officially provided by Toppan Forms had exceeded the numbers actually stamped and distributed by the Postal Department. It was revealed that on the day the investigation was carried out, the department had suffered a loss of Rs. 236,430/-.

The Postal Department had failed to take a count of the numbers of letters and had instead depended on a list provided by Toppan Forms. The report said actual losses could not be calculated as a faulty system had been followed.

Former Acting PMG Shervin

The Committee recommended the Criminal Investigations Department and Bribery Commission investigate the matter and initiate action to recover the loss. The report held Mr. Senadheera responsible for introducing the system without approval and charged two other officers with aiding and abetting.

The report charged there was suspicion the contract entered into between the Postal Department and Topan Forms was illegal. The report also recommended that the Public Service Commission be informed and action initiated against Mr. Senadheera and two other officers.

Post Master General M.K.V Dissanayaka told The Sunday Times that he had sent a letter to the Public Service Commission (PSC), but the letter had been returned. The letter has now been submitted to the Secretary Ministry of Posts.

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