One trillion rupee EPF before PAC for first time in six years!

* Bigger misappropriations at EPF than NSB-TFC fiasco, says Harsha

* Family, friends head public enterprises but not held accountable, says Eran


For the first time in six years, the Employees’ Provident Fund (EPF) will come before parliamentary oversight committee, the Public Accounts Committee (PAC), this week, as opposition law makers decry the lack of governance and transparency with family and friends of the incumbent heading public enterprises but not being held accountable.

"This is a small victory for the people. The EPF will come before the PAC this week (Wednesday, Feb 07) for the first time in six years. We believe that misappropriations at the EPF are bigger than the recent fiasco involving the National Savings Bank’s purchase of The Finance Company shares," UNP Economic Spokesman, Dr. De Silva, MP, said.

Opposition lawmakers have been lobbying without success for the EPF, managed by the Central Bank, to make full disclosures to parliament regarding investments in the Colombo Stock Exchange. The annual report of the more than one trillion rupee fund for 2011 has not been published to-date.

Dr. De Silva had written to the EPF on January 17, 2012 asking for officials to appear before the PAC.

Another parliamentary oversight committee, the Committee on Public Enterprises (COPE), chaired by DEW Gunasekara, has already raised concerns about the management of EPF funds.

It has transpired that the EPF was used to invest in stocks of loss making companies.

For example, as highlighted in these pages, the EPF stake in The Finance Company PLC was raised significantly the same year the company’s auditors highlighted serious violations of financial laws and Central Bank regulations.

A conflict of interest issue has also cropped up with the Central Bank using EPF funds to invest in the banking sector it regulates.

The PAC, headed by Deputy Finance Minister Dr. Sarath Amunugama, has not issued a single report during the past six years, whereas the COPE released one report during the past three years.

According to the latest COPE report, Mihin Lanka has sustained a loss of Rs. 12 billion, Sri Lanka Cricket’s liabilities stood at Rs. 6.1 billion as against an asset base of Rs. 3.1 billion, the Lottories Board lost Rs. 1 billion and the non-performing loans ratio of Lankaputhra Bank topped 55 percent.

"The COPE report has many examples for corruption and inefficiencies in state-run organisations. We have a situation where family and friends are being appointed to top positions in the state, but none of them are held accountable for the massive losses sustained by public enterprises. The bribery commission is only good at going after the husband (former NSB Chairman) of the legal chief justice of this country," UNP MP Eran Wickremaratne told journalists last week.

Highlighting a Transparency International report placing Sri Lanka among the countries with a ‘high’ level of corruption in defence spending he said, the UNP opposed the 18th Amendment, because the bribery commission and the Ministry of Defence of Urban Development came under the direct purview of the President. How can the spender become the auditor as well, the MP asked.

"Social welfare scheme Samurdhi received an allocation of Rs. 9 billion from the budget and this scheme covers 35 percent of the country’s population. But the Ministry of Defence and Urban Development received an allocation of Rs. 280 billion. Where is the transparency? Where is governance? The parliament is supreme over financial oversight, but there is no space for parliament to play this role," Wickremaratne said.

He said back-benchers in parliament should head the COPE and PAC like in other parts of the world, and not Cabinet ministers.

"There is no point in publishing reports (such as COPE) unless action is taken. This is a social evil and only the poor are disadvantaged by this. If people demand the right to information then the government can be held responsible, but this must come from the people," he said.

The UNP had tried to introduce a right to information bill which the government rejected promising a more comprehensive bill.

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