CPSTL forensic audit reveals alarming irregularities in product sales, distribution

• Power and Energy Minister Kanchana Wijesekera notes report shed light on irregularities in the manipulation of SAP data, massive losses, outdated procedures and data management
• Full report to be handed over by KPMG next week for further investigation by CID and legal action
• Pledges to share report with Cabinet, Parliament, Auditor General, Attorney General’s Department for next steps

Power and Energy Minister Kanchana Wijesekera revealed yesterday the findings of a forensic audit conducted by KPMG on the sales and distribution of petroleum products from Ceylon Petroleum Storage Terminals Ltd. (CPSTL). 

Taking to ‘X’ he noted that the audit’s revelations shed light on irregularities within the system on manipulation of SAP data, massive losses and outdated procedures and data management.

In August 2022, the Minister complained to the Criminal Investigation Department (CID) and a forensic audit was initiated, highlighting anomalies at the Ceylon Petroleum Corporation (CPC) and CPSTL. Subsequently, the CID recommended a comprehensive forensic audit to delve deeper into the matter.

During a briefing session with KPMG and CPSTL audit investigation officials yesterday, Minister Wijesekera was informed of several key findings. 

The audit uncovered over 1.3 million entries on the SAP data system had been altered or deleted since 2010, with a significant portion occurring in 2022 amidst the fuel crisis. However, following the lodging of the complaint in August 2022, the frequency of such alterations decreased substantially in 2023.

It also found massive losses totalling Rs. 28 billion recorded from stock holdings in 2022. However, after the complaint was filed, these losses decreased significantly to Rs. 4 billion in 2023.

The audit revealed the use of outdated circulars and procedures, coupled with inadequate data management practices, which hindered the ability to determine certain irregularities effectively.

“The full report will be handed over by KPMG next week, and I will hand over the complete report to the CID for further investigations and to take appropriate legal steps,” he noted.

Wijesekera pledged to share the complete report with the Cabinet of Ministers, Parliament, Auditor General and the Attorney General’s Department to facilitate necessary follow-up measures.