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Waste and inefficiency cause more losses in Govt Institutions than corruption-Eran Wickramaratne M.P

Eran Wickramaratne MP

Eran Wickramaratne, Member of Parliament, speaking on the ‘Financial impact of the findings of the COPE Report’ at a seminar organized by Women for Good Governance held at the OPA Auditorium last week, stated that the loss from inefficiency and waste far exceeds the losses on corruption in Government institutions.

He called economists to undertake research in estimating the loss of revenue and also the impact on economic growth.

He opined that if the loss from corruption was 5% of GDP then the loss in revenue will be as high as 15% (300 billion) of the governmentbudgeted expenditure. But the losses on wastage and inefficiency will be much greater.

Wickrameratne stressed that there is widespread institutional failure. The prevailing culture encourages activity around personalities rather than institutions which can sustain economic and business activity. He illustrated that when the Police fail in their duty, rather than building the institution of policing, we replace the police with the military.

Government institutions are rapidly losing its managerial and professional class due to politicization, poor remuneration and non-conducive work environments. The public service is caught up in a low-pay model, where it cannot retain its professional cadre. Government does not invest in training in any significant manner to redress this trend.

The Parliamentary Committee on Public Enterprises (COPE) investigated 229 institutions over the past 18 months. An analysis as to whether these institutions were loss making or profit making was not that important. But the reasons for underperforming were many. Amongst the many findings were the lack of corporate plans, ineffective audit systems, lack of independent investigations into fraud, and non-punishment of those who have breached the public trust and the lack of sound management.

He pointed out that the Auditor general’s queries were lightly regarded and often ignored by the institutions. There was a need to strengthen the role of the Auditor General, and also the Parliamentary office of the COPE. There are only eight officials to follow up on the findings of PAC & COPE. This is impossible.

He also argued that the Chief Accounting Officers of the state, who are the Secretaries of the Ministries should take responsibility for initiating corrective action as has been suggested by Minister D.E.W. Gunasekera the Chairman of COPE. It was Wickremaratne’s view that Chairpersons and Directors of Boards should be held responsible when management in government institutions do not reply audit queries on time, and do not submit annual accounts to Parliament within six months of the closure of the financial year.

He said such persons should be barred from holding government positions. He advocated the development of a ‘blacklist’ for barring people from holding public office. At present there is nothing to prevent an offender in one public institution taking up an appointment in another.

Eran pointed out that the lack of political will was the main cause in our inability to arrest the deteriorating situation in public institutions. As an example he cited the sorry state of affairs of Sri Lanka Cricket (SLC) where gift monies had not been paid, salaries of cricketers unpaid, unauthorized bonus payments to selected employees, excessive legal fees, non-transparent hiring, financial mismanagement of the World Cup, and unbudgeted expenditure relating to the construction of three stadiums, not withstanding, and as a slap on the face of good governance the members of the Interim Committee have been appointed to new positions on the Board.

It was his view that the nominations to SLC could not have escaped the Executive. He urged civil society not to lose hope despite the corrupt system, but to exercise vigilance and agitate as there are still upright individuals in all institutions including the judiciary.

To a question posed to him on what can civil society do, he replied that politicians and public servants could be brought to answer questions in a court of law if they do not uphold the rule of law. Like in India civil society should take responsibility in doing so.

He concluded that despite the limitations of the Parliamentary Committee Systems that COPE has been able to reveal facts to the public on which the government and civil society can act.

9 Comments

  1. muzammil says:

    Transparency International motto is”corruption ruins
    lives.Fight back”.According to one of its reports,A/L
    students are given 3 months study leave before they
    sit the A/L exam.During this 3 months what do the teachers do? A civil society organisation has pointed
    out at their group discussion that teachers often conduct tution classes and many do so in the after
    noons for the same students who attend their classes
    in the morning.”This is gross violation of ethics and
    it’s also a form of corruption”,points out the Civil
    society org.Well,I must say,this is about forty yrs
    old practice that successive govts ignored and stands
    like a devil today branching out to all corners.It’s
    the same with health,public administration,public
    safety etc…you name them.Like Dr Kalam said,it has
    to start from the top.This govt has to deal with its
    own creations, like jumbo cabinet which is pure waste and mounts to corruption.First comes corruption and then waste and inefficiency follow suit.
    A working definition of corruption is given as follows, in article 3 of the Civil Law Convention on
    Corruption(ETS 174).For the purpose of this convention,”corruption”means requesting,offering,
    giving,or accepting directly or indirectly a bribe or ANY OTHER UNDUE ADVANTAGE or PROSPECT thereof,
    which distorts the proper performance of any duty or behaviour required of the recipient of the bribe,the undue advantage or the prospect thereof.
    The real trouble is,inaction in the face of fast spreading epidemic, has become the action of every
    govt that came to power through corrupt means and
    remained through further consolidating the same corruption.So,eliminate corruption and waste and
    inefficiency will fall in line.

  2. John says:

    All these politicos including Eran Wick are saints, philosophers,etc, when they are in opposition but the same guys when in governance look “Bulls In China Shop” ignoring good governance, transparency, etc; &make all their henchmen chairmen, directors of all public institutions, so they make money abusing their positions.
    Have we ever seen any ad. in newspapers calling for applications for chairmen, directors of public institution numbering over one thousand ???, any time during last 30 years ??. What rubbish in this writing.

  3. John Wayne says:

    Good points, crony capitalism, militarism and institutional de-development go together with Rajapakse rule. This has been supported by a range of international donors who talk about “social and environmental safe guard policies” but observe them in the breach. Donors like the WORLD BANK who are funding the Defense Ministry through its urban development program needs to be told to STOP funding the Ministry of Defense which already has a swollen budget, in the guise of urban development given that aid is FUNGIBLE.
    The concentration of power in the hands of one family which is under educated, like the so-called Minister of economic development who has not got a degree, is the root cause of the problem of institutional decay and poor governance in post-war Lanka. When those who do not know the subject are in charge they fear having qualified people around them and this is also the reason for brain drain,
    The international development donors (ADB, WB, UNDP ) have also contributed to the post-war governance debacle by being silent on and going along with the militarization of urban development and the Colombo development model which is anti people and environment needs to be questioned.
    Most recently, World Band is planning to give a huge loan for flood control work much of which has already been done to the Ministry of Defense and will add to the inflated 20 percent GDP defense budget of Lanka.
    Civil society must launch protests against such irresponsible donors and they must be asked to stop supporting militarization of governance in Sri Lanka. World Bank needs to be asked to stop funding the Ministry of Defense and the militarization of Lanka!
    Unfortunately the UNP Mayor who should be raising the issue about the anti-people development policies of the militarized UDA is useless – Ranil Wickramainghe’s poodle without a brain or a plan to take back Colombo from the Rajapakse mafia. What a disappointment for colombo citizens who voted for Muzamil who is now Gotabaya’s poodle as well!

  4. James Bond says:

    Well well didn’t you know that the plan is that the military run ALL the institutions once they fail so that the Rajapakse dictatorship can remain in perpetuity!

  5. muzammil says:

    John,
    The Islnd newspaper reports,citing a survey that the
    country’s private sector favours non-graduates with
    skills and certain experience or technical qualifications over degree holders.This preference is
    highly noticeable in the recruitment of non-grads to
    the emerging sectors of the economy,especially in the
    field of IT,Marketing and related service industry.

    A degree, even in the field of medicine,space,earth
    or any other areas is not error-free.World class universties let you do degrees based on your work experience.Experiences can not be matched.That’s
    where people like Basil,Mayor Muzammil and many more fit in.In the western world,a degree must be backed up by experience to be a successful job candidate.If you are a man of policy and experienced in what you stand for,then go for it because in politics it’s not graduate’s decision.When we talk about corruption,waste and inefficiency,we unavoidably talk about degrees and school drop-outs and all other kind of elements that are falling into many categories.

  6. Raja says:

    I agree with John, When Eran ran ICTA waht a waste of money it was.

  7. Lady Gaga says:

    Waste and inefficiency MASK and are merely code words that put a polite spin of corruption which is a crime – more often than not. The dichotomy made between ‘inefficiency’ and ‘corruption’ is a false one that serves to water down financial and economic crime committed by politically appointed stooges such as the Central Bank accountant Nivard Cabraal who should be held accountable of misrepresentation of facts, corruption and waste of public funds for on Commonwealth Games fiasco since if Lanka had won the bid the country would have become so indebted it would have DEFAULTED.
    The whole international circus of corporate sports is also highly corrupt as are most donors as well. John Wayne is quite right! Colombo is militarized enough without the World Bank’s help! Donors should be asked to stop funding GoSL mega “development” projects except urgent humanitarian programs.. Meanwhile there needs to be a systematic civil society audit and evaluation of all the Chinese and Indian “development” projects and their benefits to the people in the interest of good AID governance in Lanka.

  8. Lady Gaga says:

    Waste and inefficiency MASK and are merely code words that put a polite spin on corruption which is a crime – more often than not. The dichotomy made between ‘inefficiency’ and ‘corruption’ is a false one that serves to water down financial and economic crime committed by politically appointed stooges such as the Central Bank accountant Nivard Cabraal who should be held accountable of misrepresentation of facts, corruption and waste of public funds for on Commonwealth Games fiasco since if Lanka had won the bid the country would have become so indebted it would have DEFAULTED.
    The whole international circus of corporate sports is also highly corrupt as are most donors as well. John Wayne is quite right! Colombo is militarized enough without the World Bank’s help! Donors should be asked to stop funding GoSL mega “development” projects except urgent humanitarian programs.. Meanwhile there needs to be a systematic civil society audit and evaluation of all the Chinese and Indian “development” projects and their benefits to the people in the interest of good AID governance in Lanka.

  9. Roshan says:

    Lady Gaga has a point. Inefficiency and corruption are two sides of the coin. Corruption follows nepotism like night follows day. Corruption is the invisible worm that eats silently into the entrails of the body politic and if not removed will destroy it.

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