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   Effective Oversight

Under the chairmanship of Rauf Hakeem,
the PAC uncovered the VAT fraud

By Priyanee Wijesekera,
Secretary-General of Parliament (Rtd.)  

An effective parliament is one that is successful at holding the government to account. Parliament, as the keeper of the public purse, is charged with the task of ensuring the proper utilization of public funds. Money allocated for government expenditure, whether by way of budgetary estimate, grant or even foreign aid, should be accurately accounted for, and the public has every right to know whether it has been honestly and prudently spent.

Oversight may be financial, administrative, political or judicial. It is by and large about efficient practice and legal compliance. It should deter improper practice and imprudent actions.

The ultimate sanction for governmental accountability is elections, where the people have the opportunity to vote a corrupt and inefficient regime out of power. The lesser institutions are the parliament, the press and civil society and the judiciary, the activities of which help people make their decision in elections. Of these, parliament is the most effective at holding the government to account.

The parliament uses different methods in its quest for accountability. The first is the gathering of information. The information should be relevant, timely and accurate. The second phase is action, when parliament demands accountability and correction. The final stage is that of response, when the government is expected to take action on the recommendations of parliament.

The Public AccountsCommittee (PAC)

The Public Accounts Committee, also known as the Committee on Public Accounts (COPA), was one of the first and most important committees to be established in the Parliament of Sri Lanka. In Sri Lanka it was institutionalised not by the Constitution or by an Act of Parliament but by the Standing Orders. The Standing Orders also established a parallel committee called the Committee on Public Enterprises (COPE) to probe the management of semi-governmental institutions like corporations and statutory boards. Standing Order 125 establishing the Public Accounts Committee gives its mandate as follows:

“125 (2) It shall be the duty of the Committee to examine the accounts showing the appropriation of the sums granted by parliament to meet the public expenditure and such other accounts laid before parliament as the Committee may think fit, along with the reports of the Auditor-General on local authorities.”

Composition of PAC

Today the Public Accounts Committee consists of 33 members, a disproportionate number for a parliament of 225 members. In fact, all other committees in parliament consist of 31 members in order to ensure balanced representation of all parties. Originally, the parliament elected in 2004 consisted of nine parties. As time went by, breakaway groups sought recognition as separate parties. To further confound matters, several “one–man” parties also emerged. The result is that the committee membership keeps expanding. In nominating members for the Public Accounts Committee, the Committee of Selection accepts any nomination sent by the parties.

Even though the membership of the Public Accounts Committee has expanded to 31 people, the quorum remains four and the records show that it is very rare for the meetings to be well-attended. This is due to the fact that the large number of committees makes full attendance at any one of them very unrealistic.

It is imperative that there should be balanced representation of all parties in the committees. In most countries, cabinet ministers are excluded from  membership in the PAC. This would not be possible in Sri Lanka due to the fact that almost all members of the government are ministers.

The Chairman

There have been occasions when the Public Accounts Committee was headed by a member of the opposition, but today it is headed by a government minister. The government usually has the majority in parliament. Similarly, committees, reflecting the composition of parliament, normally have a majority of government members. Because the chairman is appointed by the committee, he is usually a government MP.

The chairman is the committee spokesman and his vote is crucial in ensuring fairness, promoting consensus and handling political issues, as well as providing leadership. The committee itself selects its subjects for investigation, but the chairman’s view can be highly influential.

The chairman can allow or disallow the questioning of witnesses, and it is his duty to ensure that the questions are answered, failing which he can refer offending witnesses to the Committee on Privileges. It is also up to the chairman to ensure that public servants are not unduly embarrassed or harassed.

Appointing the chair from the opposition would, to some extent, counter-balance the domination of the committee by the government party. On the other hand, having a member of the government chair the committee may assist in persuading government ministers to implement recommendations.

From October 2004 to November 2006 the committee was headed by the Hon. Rauf Hakeem, an opposition member who subsequently joined the cabinet, but later left it. Under his chairmanship, the PAC issued a “sledge-hammer” report focusing on a massive fraud in the Department of Inland Revenue in connection with the VAT.

Powers of the Committee

Under the Standing Orders, the committee can summon witnesses, call for and examine any book, record or other document, and have access to stores and property. Using these powers, the PAC can probe the effectiveness and efficiency of government policies, the amount of expenditure approved by the government and the quality of the administration.

The report of the Auditor-General, which the committee uses to perform its investigations, is extremely bulky, and a detailed probe into each and every item would be impractical and sometimes unnecessary. The PAC has the right to choose which topics are important enough to investigate. In choosing the topics, the committee  should decide what is important,  and should not leave it to the Auditor-General to make that decision.

The committee can demand that witnesses answer its queries,  failing which the witnesses can be held in contempt. However, in Sri Lanka the powers of the Parliamentary Privileges Committee are very limited and they have no authority to impose fines or jail  witnesses for contempt.

The PAC can also appoint sub-committees as and when necessary. They can formulate suggestions, report back to parliament and have their reports published. As a measure of reform, the PAC should be able to initiate its own inquiries without limiting its investigations to the reports of the Auditor-General. Further, the ability to recommend the recovery of misappropriated funds and the suspension of errant officials would greatly strengthen the effectiveness of the committee


The Auditor-General invariably assists the committee in its investigations. He holds a constitutionally-protected post and is answerable to parliament. Under the Constitution of 1948, when the state was headed by a non-political Governor General, appointments to posts like the Auditor-General, Commissioner of Elections and the Secretary–General of Parliament were made by the Governor General. In 1978, the Head of State and the Head of Government were fused to create the Executive Presidency, and its holder became the appointing authority to those positions, thus bringing them within the orbit of the President. The President is expected to seek the recommendations of the Constitutional Council in appointing the Auditor-General.

However, today the Constitutional Council does not exist. The President, upon the retirement of the last Auditor-General, appears to have appointed the next most senior officer to succeed him, thus avoiding controversy. Whether this dependence on the President weakens the Auditor-General and his department in the performance of their duty is a moot point. In some countries, the Audit Department functions under the parliament and has its own separate budget. The salary of the Auditor-General is determined by parliament.

The staff of the Auditor-General is part of the regular public service and does not form a separate service, as in parliament. The department itself is subject to being audited as an inescapable consequence of being part of the government service. Under Article 154(4)b of the Constitution, the Auditor-General may even outsource some of its services. One occasion when this provision was used was when the Auditor-General  appointed an IT expert to audit the accounts of the Parliament Modernisation Project, which was funded by the UNDP in 2007.

The Committee Staff

The two Financial Oversight Committees in parliament have separate staff under two different assistant directors. The duties of the parliamentary staff of the PAC is mainly confined to the keeping of records and proceedings and assisting members in their work. Verbatim records of the proceedings are always maintained, and minutes are kept in all three languages. It is the committee staff that maintains the correspondence between the PAC and the public service.

The committee staff are not obliged to assess whether the government actually follows the recommendations of the PAC. Ideally, the committee officers are an important source of information and assistance to the committee.

At present, five consultants have been appointed to help strengthen the two oversight committees and the supporting staff. Two of these consultants are former Auditors-General.

The fate of PAC recommendations

The reports of the PAC usually aren’t debated in the House. However, in the past their recommendations were treated as directions to the public service and were  implemented. The PAC can comment on changes to policy and management procedures within ministries and departments. It can also recommend discontinuance of projects and programmes and fix responsibility on errant officials. It is rare for recommendations to lead to disciplinary action against public officers; Parliamentary committees in Sri Lanka have no powers of prosecution.

In 2007, the report on the VAT fraud was referred to the Commission to Investigate Bribery and Corruption, but so far no progress is evident. This report was also referred to a Commission of Inquiry. To complicate matters even further, a Select Committee of Parliament was also appointed to recommend structural and organisational changes to the Department of Inland Revenue to prevent the type of activity uncovered by the PAC. Unfortunately, PAC recommendations often just gather dust. It is also rare for legislation to be modified in light of PAC recommendations.


Governments are usually not very interested in the PAC overseeing their activities and may even consider it a hindrance. Even public officers are sometimes reluctant to respond to queries by the PAC. In Sri Lanka, ministers are not summoned before the PAC. Instead, the secretary appears. Proper accountability depends on transparency and vigilance. It is essential to de-mystify the administration if we hope to prevent officials from helping themselves to ill-gotten gains.

A weak party system is also an obstacle to the effective functioning of the PAC. When the government has no clear majority in parliament, oversight can be robust and effective. When the government has an overwhelming majority, parliamentary oversight is bound to be weak. The opposition parties are weakened even further by the government, which lures their members with the crumbs  of office.

Another factor leading to weak parliamentary oversight is the state-controlled media, which ignores findings that fault the government. Parliament acting as a rubber stamp through lack of debate also weakens parliamentary oversight, turning it into a mere “Yes Parliament.”

Committees that function without adequate research services also weaken the PAC secretariat. The staff of the PAC should be assisted by its own research service, whose task would be to gather information for the members. Lack of office facilities for members, both in parliament and in the constituencies, also hamper the work of committee members. Parliament should provide effective communication systems to assist its members.

Other possible methods of improving parliamentary scrutiny would be for the oversight committees to have their own budgets. They are often constrained by inadequate funds, particularly for hiring consultants and experts. Proposals have been made time and again for PAC meetings to be open to the media, but the pros and cons of this proposal should be carefully weighed so that the public officers do not become over-cautious and inhibited in the performance of their duties.

Soliciting ideas from civil society about the work of the PAC could also be considered. Members who are appointed to the PAC should also, at the beginning of each parliamentary session, be given specialised training, both locally and internationally, to equip them for the task ahead. A well-trained staff is an invaluable asset.

Finally, it should be emphasized that the lack of accountability seriously affects the credit-worthiness of the nation. The loss of credit-worthiness is a major feature of failed states.

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