INTRODUCTION
Committee on Public Accounts (COPA) of Sri Lanka is one of the oldest Parliamentary Financial Oversight committees where the Westminster model of Parliamentary System has been practised.
As an Oversight Committee, COPA plays a pivotal role in assisting the respective Parliaments to ensure the accountability to the Public Finance as people’s representatives. It is tasked with overseeing the use of public funds for executing public policies.
HISTORY OF COPA
COPA was setup in response to the motion placed before the Legislative Council by E.R. Thambimuttu on 5 October 1921.
The Motion Moved
“Since the Council has no means of ascertaining that the grants of the Council for each financial year, including supplementary grants, have been applied to the objects which the Legislative Council presented and, also in view of the fact that any balances have been left unexpended at the end of the year are not made available to meet the following years expenditure.” I move that a Standing Committee of Public Accounts be appointed for the ensuing financial year, namely 1921 – 22.” (Ceylon Sessional Papers, 1922)
A Standing Committee on Public Accounts was accordingly appointed on September 5, 1923. Its first meeting was held on October 17, 1923. That Committee consisted of the following members.
Chair, E.J. Hayward, E.R. Tambimuttu, F.R. Dias, A.C.G. Wijekoon
It dealt with the Colonial Auditor’s report for the year 1921-’22. This situation persisted until the introduction of the Donoughmore Constitution in 1931, and it functioned with some limitations. However, at the request of the Committee the Colonial Auditor was present at all meetings. The Constitution of 1931 did not give much attention to the role of audit or COPA. However, they recommended far-reaching changes regarding the responsibility of audit. Accordingly, for the first time the Auditor General was made responsible directly to the Legislature.
The Committee was thereafter appointed by a resolution of the State Council on June 21, 1932 and the rules and orders of the State Council were amended to provide for a Standing COPA.
It was suggested and agreed to carry out the recommendations of COPA, with the concurrence of the Treasury, by the Financial Secretary. At the request of COPA, the Auditor General and a representative of the Treasury also attended COPA meetings.
Another important matter which came up during this period was the fact that the State Council should consider the COPA report in the House.
An important fact raised here was that within the Soulbury administrative system, financial control should not be concluded at the approval of estimates in the Parliament and, the importance of including the scrutiny of proper utilization of provisions approved for a service by the enforcement of the Appropriation Bill, to the scope of the Auditor General.
After the grant of independence to Sri Lanka in 1948, due to the growth of public revenues and expenditure, it was needed to be scrutinized more carefully to achieve proper accountability.
A full-fledged COPA was set up under Standing Order No. 125 of Parliament, when independent Sri Lanka was born in 1948.
As years went by, the increasing workload on COPA necessitated the separation of public finance policy issues relating to Public Enterprises. Standing Order No.126 was enacted by Parliament on the 23 March 23, 1979 for establishing a separate Committee on Public Enterprises (CoPE).
After 43 years, Standing order No. 119 of the new Standing Orders of Parliament approved and adopted by Parliament that include the revisions approved by Parliament on October 5, 2022 and 23 November 23, 2022, which are effective from 23 November 23, 2022, provides for the establishment, powers and functions of the COPA.
COPA is enforced by Parliament Standing Order 119 and Standing Order 134, and 135 provide for the matters connected to the proper functioning of COPA.
CONSTITUTIONAL PROVISIONS RELATING TO THE PUBLIC FINANCE
Constitutional Provisions
In Sri Lanka, Parliament is vested with full powers over Public Finance. Article 148 of the Constitution of Sri Lanka provides as under;
“Parliament shall have full control over Public Finance. No tax, rate of any other levy shall be imposed by any local authority or any other public authority, except by or under the authority of a law passed by Parliament or of any existing law”
Articles 149 and 150 related to the Consolidated Fund and Article 151 related to Contingencies Fund also indicate the exclusive control of Parliament over Public Finance.
MAIN DUTIES OF PARLIAMEMT OVER PUBLIC FINANCE
Parliament exercises its control over Public Finance in 3 stages.
* Through reviewing and approving Revenue and Expenditure estimates.
* Through reviewing and monitoring the Budget execution.
* Through reviewing and examining the accountability of the Government and its institutions.
The above functions are executed by Parliament at two levels.
* Through the level of the House
* Through the level of its Committees
Through the level of the Committees:
At this level, Parliament is privileged to examine in-depth, through its Committees.
Accordingly, COPA performs the financial oversight duty by assisting in the control of Public Finance. The contribution of these Oversight Committees is very crucial in Parliamentary control over Public Finance.
COMMITTEE ON PUBLIC ACCOUNTS (COPA)
* Duty of COPA
It shall be the duty of COPA to examine the accounts showing the appropriation of the sums granted by Parliament to meet public expenditure and such other accounts laid before Parliament as the Committee may think fit, with the assistance of the Auditor-General. – [SO 119 (2)]
COPA shall, every 3 months, report to Parliament on the accounts examined, the finances, financial procedures, performance and management generally of any department, local authority and on any matter arising therefrom. The report shall include observations on matters that require remedial action, and recommendations to ensure the proper usage of Public Finance. – [SO 119 (3)]
* The following Members of Parliament had Chaired COPA during the period 1923 to 1947.
E.J. Hayward, H.A. Loos, K.P. Balasingham, Henry L.De Mel, B.H. Aluwihare Dudly Senanayake, G.G. Ponnambalam, H.W. Amarasuriya, J. Thyagaraja
The following Members of Parliament Chaired COPA from 1947 to date.
K. Kanagaratnam , (1947-1950), Albert F. Peiris, (1950 -1951), Rosalin Koch, (1951-1959), R. S.V. Poulier C B E, (1960-1962),V.A. Kandiah, (1962-1963), R. S.V. Poulier C B E,(1963-1964), Bernard Soyza, (1965-1976), S. Thondaman, (1976-March 1978), P.S. Suseithasan, (November 1978-1983), W. P.B. Dissanayake , (1983-1987), G.V.S. De Silva, (1988), Chandrakumara Wijegoonawardena , (1989), E.P. Paul Perera, (1990-1994), Dr. P.B.G. Kalugalla , (1994-1995), Dr. Wishwa Warnapala, (1996 -August 2000), Mahindananda Aluthgamage, (November 2000-July 2001), Anura Priyadarshana Yapa, (January 2002-February 2004), Rauff Hakeem, (May 2004-April 2008), Anura Priyadarshana Yapa, (June 2008-January 2010), Dr. Sarath Amunugama , (May 2010-June 2015), Lasantha Alagiyawanna , (November 2015-February 2020), Prof. Tissa Vitarana, (September 2020 -July 2022), Kabir Hashim, (October 2022-January 2023), Lasantha Alagiyawanna, ( February 2023)
* Composition of COPA
[SO 119 (1)] – There shall be a Committee to be designated the Committee on Public Accounts comprising of 16 Members, who are not members of the Cabinet of Ministers, nominated by the Committee of Selection.
The Members are appointed by the Committee of Selection according to the Party ratio and announced by the Speaker of the Parliament at the commencement of each Session of Parliament.
This Number varies from session to session, according to the decisions taken by the Committee of Selection on the request of Party leaders.
AUDITOR GENERAL AND COPA
Article 153 of the Constitution of Sri Lanka provides for the appointment of the Auditor General.
Article 154 of the Constitution of Sri Lanka enumerates the following duties and functions of the Auditor General.
The National Audit Act No.19 of 2018 states that the Auditor General should assist the duties of the COPA.
The Auditor General submits his reports to Parliament that are prepared on the accounts of the Government Institutions, within 10 months of the closure of each financial year and as and when he deems it necessary.
The Reports of the Auditor-General form the foundation for further work by COoPA. Nothing, however, forbids COPA to examine matters involving Public Finance, which has not been reported upon by the Auditor General.
By scrutinizing the reports submitted by the Auditor General, COPA observed that the matters referred by the Auditor-General, as deficiencies on the part of the public institutions, falls into following broader categories.
1. Non-compliances with Appropriation Laws, Financial Regulations and other Regulations, Treasury circulars and Departmental standing orders etc.
2. Non-performances and under performances in relation to the resources consumed.
3. Not performing of the objectives and main functions entrusted to the entities at the establishment of such institutions.
4. Losses to the Government, Uneconomical Transactions, Misappropriation of Government Assets and frauds.
7. FUNDAMENTALS TO BE ESTABLISHED BY COPA
There are 3e fundamentals, which COPA, in its functions, should have to establish:
1. To ensure that money is spent as Parliament intended.
2. To ensure the due exercise of economy
3. To maintain high standard of public morality in Financial Matters.
COPA is expected to ascertain whether the money has been spent adhering to the rules, regulations and practices laid down by Parliament.
The investigations of COPA focus on the following main areas:
* Excesses on programmes and projects
* Non-Compliances with Advance Accounts limits
* Unauthorized working losses
* Audit observations on noncompliance with rules, regulations and statues etc.
* Value for money audit
8. INSTITUTIONS UNDER THE SUPERVISION OF COPA
There are approximately 835 institutions coming under the supervision of COPA, according to the 2023 Estimate:
Special Spending Units – 19, Ministries – 29, Departments – 102, District Secretariats – 25, Provincial Councils, Provincial Council Funds – 09, Special Spending Units, Ministries, Departments & Statutory Authorities coming under 310 Provincial Councils, Local Government Institutions, Municipal Councils – 24, Urban Councils – 41, Pradeshiya Sabhas – 276. TOTAL 835
9. COPA MANAGEMENT INFORMATION SYSTEM (COPA MIS)
With the escalation of the number of public institutions, COPA of the Eighth Parliament, had identified the following key areas as the immediate challenges that have to be overcome focusing special attention on COPA.
* The massive number of institutions that has to be covered by COPA ( currently
around 835 institutions)
* Delays occurring in presenting Auditor General’s reports in Parliament and the delays in receiving the same by COPA. This results in COPA examining certain institutions after a lapse of considerable time of conducting the audit.
* Poor follow-up actions and delays in receiving responses from the relevant institutions. Strategies adopted by COPA in implementing the online evaluation system.
* All State institutions have been categorized into 8 groups, considering their accounting and administrative systems and procedures, nature of the reporting systems applicable for them and the amount of Budget allocation.
* A communication path had been developed among all stakeholders and link with the subject officers who handle the programme, Accounting officers, Chief Accounting Officers, Auditor General and the Parliament has been developed.
* Six online formats of questionnaires have been prepared for each category of institution and uploaded to COPA Management Information System (MIS) to enable all the State institutions to download and complete the questionnaire online.
* The Questionnaire consists of 2 parts and was framed to perform evaluations along the following directions.-
Part I – Financial Compliance
(i) Performance and preparation of Financial Statements (ii) Measures taken by institutions for Financial Control (iii) Asset Management (iv) Maintenance of Records and submission of financial reports (v) Revenue Management (Collection and accounting of revenue) (vi) Expenditure Control (Adhering to limits fixed by the Parliament, maximum utilizing of provisions and Imprest limits) (vii) Other Financial Activities ( Advance Account, Commercial activities and Deposit Accounts ) (viii) Maintaining of Records (main primary books of the entity) (ix) Timely Submission of Reports ( Eight main Accounts ) (x) Responses to Audit (Audit Queries and Internal Audit Queries) (xi) Reporting to Parliament (Submission of Performance Reports)
Part II – Operational Performance
(i) Implementing the provisions of the Right to Information Act (ii) Reaching Sustainable Development Goals for the Millennium Development (iii) Implementing provisions of the Citizens’ Charter (iv) Implementing a good Human Development Plan (v) Reaching a clear audit opinion according to the new Audit Act (vi) Proper responding to audit disclosures reported to Parliament (vii) Reaching performance goals according to identified objectives and functions of each institution
* The data submitted by Chief Accounting Officers that were overviewed by the Auditor General, are forwarded to COPA along with newly obtained marks.
* COoPA presents the computer generated MIS report in Parliament annually including the automatically generated marks of the institutions with the analysis part prepared by COPA Secretariat.
* Moving beyond mere presenting of COPA Reports, COPA has awarded the public institutions that had achieved a high level of marks to motivate them, in the financial years 2015, 2016, 2017, 2018, 2019 and 2020.
10. SIGNIFICANT ACHIEVEMENTS AND ACTIVITIES OF COPA BETWEEN THE EIGHTH PARLIAMENT AND NOW
* In addition to examining the government institutions under the preview of COPA adopting the traditional way of examining institutions, conducting Committees, preparing minutes and reports and presenting reports in Parliament, COPA was able to complete 6 years of online evaluation commencing from the financial year 2015 to 2020 and forwarding reports to Parliament. The presentation of the evaluation report for the year 2021 to the Parliament is in the final stage.
* COPA has presented 19 reports (from Eighth Parliament to now) including the reports of COPA Management Information System (MIS)
* COPA has been able to evaluate all government institutions annually using COPA online MIS. This has provided a successful solution to the issue of not being able to examine all the state institutions annually according to the traditional system of calling before the committees, due to the lack of time. The value and importance of this online evaluation system was highlighted by being able to maintain the continuous evaluation during Covid period.
* Prior to the launching of the COPA online MIS, COPA organized several workshops for the public officials including the Secretaries to Ministries, Heads of Provincial Councils, and the Heads of Local Government Authorities with a view to enlightening them about the functioning of COPA online MIS.
* Considerable improvement in the financial discipline can be witnessed in State institutions after COPA online MIS had been implemented successfully. e.g.: The percentage of improvement of overall financial control and compliance with performance guidelines of all the government institutions examined through COPA
MIS are as follows:
Accounting year 2015 – 64%, Accounting year 2016 – 71%, Accounting year 2017 – 80%, Accounting year 2018 – 78%, Accounting year 2019 – 82%, Accounting year 2020 – 80%.
Special Observations on Achievements
In 2015, out of around 840 government institutions, 111 institutions have scored low marks or, less than 50 marks, where it was able to bring the number to just one institution in 2021.
In 2015 it was limited only to 58 institutions or 7% of the total institutions to obtain more than 90% marks in the evaluation, whereas the figures have increased to 329 institutions or 37.1% in 2021.
Performance evaluation on a different basis was started later, from 2018, has shown a considerable encouraging signs of giving more weightage for performance evaluation by 191 institutions or 18.3% obtaining more than 90% in 2021 evaluation.
* A Special Sub Committee was appointed by COPA to recommend the steps to be taken by 17 public institutions that are key stakeholders in Government revenue such as the Departments of Inland Revenue, Excise and Sri Lanka Customs, to improve the collection of Government revenue by using effective Information & Communication Technology (ICT) Systems.
A fundamental technical committee consisting of 13 relevant institutions, chaired by the Secretary to the Prime Minister, had been appointed to enforce the recommendations of this Sub Committee which is performing successfully. Presidential Secretariat, Ministry of Finance, Economical Stabilization and National Policies, Ministry of Technology and the ICT Agency of Sri Lanka are the other members of this Sub Committee.
* The report of the same which was presented in Parliament included recommendations given by COPA to improve the economy of Sri Lanka by increasing the revenue collected by the Departments of Customs, Inland Revenue and Excise by using ICT systems that are the key revenue earners of the country.
* Reports for 48 special audit reports have been called from the relevant ministries in 2023. The ministries were directed to appoint committees on ministerial level to consider these special audit reports and to forward the committee reports to COPA.
A number of meeting sessions and a series of zoom meetings were held to review the online questionnaires and submit proposals to bring timely amendments. A questionnaire that had been updated accordingly was presented for the year 2022.
* A circular dated 30.01.2020 has been issued by the Department of Public Finance, instructing all Government Institutions to prepare their annual performance reports in compliance with a common specimen prepared by the Public Finance Department on the instructions of COPA as it observed that a large sum of money is spent by State institutions on preparing Annual Performance Reports with unnecessary information.
* Implementation of the Directives of the COPA
Implementation of the directives given by COPA has been strengthened by the amended Standing Order 119(4) of Parliament.
Standing Order 119(4) – “A report of COPA, once tabled in Parliament, shall be referred to the Minister in charge of the subject of Finance and the Ministers in charge of the institutions and the respective Minister shall submit the observations and actions taken in that regard to Parliament within 8 weeks. If the Minister is of the view that particular recommendations may not be fulfilled, the Minister shall explain the reasons in writing and indicate alternative actions, the Minister proposes to take to ensure the proper usage of public finance.
If COPA requires, it may invite the relevant Minister to explain the position in person, and to answer the questions that arise as to such matters within 8 weeks. When Parliament so decides, the report concerned may be referred to the Attorney General for his observations and necessary action.”
* The new method of referring the observations and the steps taken by the Minister in charge of Finance and the Ministers in charge of Institutions in accordance with Standing Orders 119(4) of the Parliament regarding the reports tabled by COPA to the Auditor General for his observations, was introduced by the 8th Parliament. This strengthened COPA’s follow-up process.
* From the 4th session of the 9th Parliament, some investigations were carried out through the zoom technology.
* For example, when the Uva Provincial Council (PC), the Eastern PC and the Sabaragamuwa PC were summoned before COPA, for examination, all the institutions under the PCs were connected through Zoom technology and questions were also raised about the important audit issues related to those institutions.
* Furthermore, the officials of the remote institutions which are important for investigation purposes are also participating in the investigation work through zoom technology (For example, when examining the Probation and Child Care Services Department, relevant officials of other institutions including Provincial Probation Commissioners were connected likewise.)
* After the decision to publish the schedule of the meetings of COPA on the Parliament website along with the invited institutions, the public has been given the opportunity to send their views, problems and suggestions on the public institutions through e-mail, fax or post to COPA.
* Opening COPA proceedings to the Media.
In the 8th Parliament, COPA Chairman and CoPE Chairman submitted a joint proposal to the Speaker of the Parliament, to facilitate live broadcasting of COPA meetings. Accordingly, Standing Order No. 14 of the Parliament has made provision for that.
* With these new measures, COPA has been able to maintain transparency and reduce the existing gap between all government institutions including local government and Parliament. The sound functioning of COPA is very helpful in the successful management of Government finances, which is an essential part of public policies.
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