Auditor General S. Swarnajothi yesterday said that action hadn’t been taken on his annual report, which revealed major shortcomings in the State financial sector, even though it had been submitted to Parliament late last year.

Responding to The Island queries, at a press briefing yesterday, Swarnajothi said that his findings should be taken as constructive criticism with tangible action to rectify faults.

He acknowledged that the Draft National Audit Bill which would add strength the State Audit was still with the Legal Draftsman. He said that he couldn’t give a date when it would be ready. He was confident that the new Bill would strengthen the Auditor General who now lacks the authority to take corrective measures.

The press briefing had been called by the Finance Ministry to announce a two-day National Conference on ‘New Public Financial Management and Accountability’ of public sector accountants and auditors, at the auditorium of the Institute of Public Finance and Development Accountancy (IPFDA).

Swarnajothi said that good governance would largely depend on a good public financial management system. Admitting shortcomings in the internal audit process he emphasized the importance of improving the skills of public sector accountants and auditors.

In his report, the AG severely criticized the Finance Ministry and several other institutions including the armed forces and the Health Ministry. He pointed out that the absence of clearly defined and well formulated accountability arrangements had resulted in 93 government-owned companies incorporated under the Companies Act and six regional development banks Act involving taxpayers’ money from AG’s scrutiny. He said that the oversight of about Rs. 20,989 million had been poor and the Department of Public Enterprises of the Treasury hadn’t been even identified the percentage of share holding in respect of 26 companies with an investment of Rs. 7,548 million. Private audit firms had carried out audit without his supervision and the annual reports of these companies hadn’t been tabled in Parliament.

V. Kanagasabapathy, President of IPFDA and Financial Management Advisor, Finance Ministry said that they were aware of contentious issues. Swarnajothi said that issues raised by him in 2007 annual report could be discussed at the national conference scheduled to take place on March 20 and 21.

Asked whether rapidly deteriorating Sri Lankan accounting standards as revealed by successive AGs and parliamentary watch dog committees, COPE and PAC could be rectified by having conferences and workshops, Kanagasabapathy said that the situation couldn’t be improved overnight.

Swarnajothi declined to comment on the recent landmark Supreme Court judgments on several major government-private sector transactions including the privatization of the Lanka Marine Services Limited.