Checking waste: Ravi K walks the talk

Wednesday, 21 January 2015 00:59 - - {{hitsCtrl.values.hits}}

Raps public institutions putting congratulatory political press ads
Asks heads or those responsible to pay for the ads using personal funds
National Insurance Trust Fund, People’s Bank, NSB among State entities advertising in supplement titled ‘Maithri Era’ in State-owned English daily
Treasury to issue new and stricture guidelines for the future

Walking the talk on good governance, Finance Minister Ravi Karunanayake yesterday rapped several State institutions for placing press advertisements of a political nature with the Treasury asking those responsible to pay out of their own pocket rather than wasting public funds.

Holding his first press conference since assuming duties, Karunanayake displayed some of the ads and said Finance Ministry will give a directive to prevent repetition of such action by public institutions. The ads concerned were in the State-owned Daily News special supplement titled ‘Beginning of Sri Lanka’s Maithri Era’. For example, National Insurance Trust Fund which comes under the purview of Finance Ministry had a full page ad titled ‘Chiran Jayathu...’ with a picture of President Sirisena and Premier Wickremesinghe. Others included National Savings Bank (‘The era of Maithri has begun’) and People’s Bank. Supporting newspaper supplements marking nationally important events by public institutions has been a regular feature in the past. However, Karunanayake said he would put an end to waste of public funds. “We fought against such wasteful expenditure. We were voted for a change. I discussed this matter with President and Prime Minister and we decided to ask those responsible to pay for these politically fanciful ads instead of using funds of the institution,” the Finance Minister said at the briefing along with Secretary and other senior officials. Karunanayake referred to only institutions which comes under the oversight of Finance Ministry but said a directive would go from the Treasury with strict guidelines for the future. This includes getting permission from the Treasury for such advertisements. The Finance Minister also said that the previous President Mahinda Rajapaksa regime’s State extravagance ‘Deyata Kirula’ would not be held forthwith. “We will carry out essential development programs involving capital expenditure that had already been committed under the ‘Deyata Kirula’ initiative but it will be done after a cost-benefit analysis. We have stopped recurrent expenditure on ‘Deyata Kirula’ along with its suspension,” Karunanayake added. He said that over Rs. 5 billion had been set aside by the previous regime for 2015 ‘Deyata Kirula’.

Rs. 20 b funds in BOC Account of Defence Ministry: Finance Minister claims Gota is bluffing; insists due process not followed

Finance Minister Ravi Karunanayake yesterday fired back at former Defence Secretary Gotabaya Rajapaksa for making misleading statements over the maintenance of a multi billion rupee account outside the purview of Treasury. In what is likely to be raging battle, Karunanayake addressing the media for the first time since assuming office as Finance Minister, said there was no inference that Rajapaksa maintained the account at Taprobane Branch of Bank of Ceylon under his name but the Defence Ministry hadn’t followed the due process. Referring to the widely published denial by former Defence Secretary, Karunanayake asked: “Does he (Gotabaya) thinks Mahinda Rajapaksa is still the President?” This was to counter what Karunanayake alleged as misleading response by Gotabaya. Karunanayake said Defence Ministry account at Bank of Ceylon had Rs. 20 billion worth of funds arising from payments by Shangri La and Avic on the lease/purchase of land at Colombo 3 to build star class hotels. When the new Government took office, the account’s balance was Rs. 13 billion. The New Finance Minister said that the procedure followed was far from transparent best practices. “At a time when Treasury needs money badly, it is deprived of funds,” alleged Karunanayake who added that the outstanding funds have now been transferred to Treasury. The original funds comprised of $ 75 million (Rs. 8.3 billion) by Shangri La and a further $ 50 million (Rs. 5.4 billion) again by Shangri La and $ 54 million (Rs. 5.9 billion) by Avic. These were funds transferred outright for the lease of land in Galle Face Green or thereabouts. Karunanayake said if an ordinary public servant had followed this process he or she would be in jail. When questioned whether the funds were originally paid to Treasury which in turn transferred to BOC Account of Defence Ministry for the use of building the new mega Defence Headquarters at Akuregoda, Karunanayake said a proper investigation was still pending and details would be made public soon. In response to original reports of Karunanayake’s revelation, former Defence Secretary in a statement said , there exists an Operational Account held with the Bank of Ceylon - Taprobane Branch the funds of which are dedicated to financing the construction of the proposed Army headquarters building at Pelawatte. This account was opened with the approval of the Cabinet of Ministers, and the funds deposited in the said account were from the proceeds of the sale of land at Galle Face, Colombo on which the Army headquarters was situated. Consequent to the commencement of construction work at the proposed site in Pelawatte, and based on the progress of such work, withdrawals were to be made from this account in order to settle amounts due to the various contractors and suppliers. The account is operated by the Chief Accountant and other authorised officials of the Ministry of Defence, under the overall supervision of the Secretary of Defence. To elaborate further on how this account operates: cheques are drawn upon the receipt of payment vouchers, and all cheques bear two signatures of authorised signatories. To the best of my recollections, the account was opened in 2011 with about Rs. 20 billion, which were the total proceeds from the land transaction mentioned earlier. Regular withdrawals have since been made to carry out payments of certified claims from contractors. The names and signatures of the persons authorised to operate the account are available with the bank and the Chief Accountant of the Ministry. The balance of the said account, as at the last day of my holding office, was certainly over Rs. 8 billion. The figures may be verified with the Treasury, as the annual deposit balance is reported to, and would be reflected on, the Government Balance Sheet.