Dr Prem Yapa Associate Professor in Accounting Sarath Ukwatte PhD Candidate in Accounting

1. The oversight committees in developing countries – Public financial control and the expectations gap – Some empirical evidence from Sri Lanka Dr Prem Yapa Associate Professor in Accounting Sarath Ukwatte PhD Candidate in Accounting

2. Content Background & Motivation Objectives Research Questions Methodology Theoretical Framework Findings Concluding Remarks Information Technology Services

3. Background of the StudySri Lanka was a colony of Britain for nearly 150 years. [1796 - 1947]. independence in 1948. The parliamentary institutions in Sri Lanka began to develop with the introduction of the Legislative Council in 1833 based on Colebrooke and Cameron recommendations (British government).The Public Accounts Committee (PAC) in Sri Lanka is an institution of parliamentary control similar to that of countries where Westminster model of parliamentary government is practiced. Information Technology Services

4. Motivation • Sri Lanka, as a democratically elected government, exercises oversight function in the financial performance of public institutions through Committee on Public Accounts (COPA) and the Committee on Public Enterprises (COPE). • The oversight committees in Sri Lanka have existed more than a century and it is, therefore, an opportune time to explore how these committees have secured good governance. • First empirical study on oversight functions in the public financial management performance. Information Technology Services

5. Motivation of the StudyPrevious Study on oversight committees Information Technology Services

6. Objectives • To what extent the oversight committees fulfilling the expectations of the Stakeholders of the public sector in Sri Lanka. • To understand the relationship between oversight committees and the legislature. • To understand to what extent that the COPA & COPE can use their authority (power) to implement their recommendations. • To understand the appropriateness of the actions of public institutions within the socially constructed systems. • To assess the efficiency and effectiveness of the oversight functions. Information Technology Services

7. Research Questions • Main Question • Whether it is possible to implement an active financial controls through public oversight committees and establish public sector accountability and transparency (Good governance) as expected by the general public in the Democratic Socialist Republic of Sri Lanka? • Sub Questions • Do oversight committees have power to summon persons and documents? • Do oversight committees have sufficient power to summon officers? • What documents are summoned before the oversight committees? • Do oversight committees allocate sufficient time for hearings and follow up procedures? • What role does Auditor General play? Information Technology Services

8. Methodology Primary data for this paper was gathered from two sources. 1. Semi-structured interviews were conducted with senior public officers to gain insights into oversight committee practices. The interviewees consisted of COPA and COPE committee membership, senior officers from the Ministry of Finance and the Treasury Department in Sri Lanka. 2. Similar interviews were conducted with some parliamentarians on the oversight aspect in the public sector. These respondents expressed their comments and opinions based on their experiences and present positions in their respective departments or ministries. 3. In total twenty five interviews were conducted and five meetings attended to collect primary data for this study. Secondary Data 4. Secondary sources such as annual reports, journal articles websites, legal records, refereed journal publications, books and acts of parliament. 5. The records of national archives. Information Technology Services

9. Theoretical FrameworkApplication of Stakeholder theory ( Mitchell et all, 1997. Identification Typology) Information Technology Services

10. Role of Oversight Committees COPA (Committee on Public Accounts) The COPA (formally named as PAC) is the oldest oversight committee in Sri Lanka. This committee’s task is to probe the managerial efficiency and financial discipline of the Government Ministries, Departments, Provincial Councils and Local Authorities. COPE (Committee on Public Enterprise) The second oversight committee (i.e. COPE) has been established in 1979 to ensure the observance of financial discipline in Public Corporations and other Semi Governmental bodies in which the Government has a financial stake. Information Technology Services

11. Parliament COPA/COPE Auditor Ge MOPClG F/Minister Ministers Provincials F/Ministry Ministries Departments PEs F/Depts Local Au Pra Saba General public Information Technology Services

12. Role of Oversight Committees Conti…. Information Technology Services

13. Findings • In terms of the article 154 of the constitution, AG has been given the power to audit almost all the government institutions written under the Law of the State and the mandate is beyond the financial Audit(Power to influence the firm). • The Finance Act No. 38 of 1971 empowers the AG to examine, accounts and finances, property of public corporations, organisations, systems and procedures, compliance with laws, rules and regulations, economy and efficiency aspects, and any other matters the AG deemed necessary (Legitimacy of the Stakeholder’s relationship with firm). • Each report of the AG is referred to the COPA or COPE for further examination and investigation. It reveals that the COPA or COPE is the only channel through which Parliament can directly examine the public institutions about their management of public funds (Power & Urgency) • Majority of the membership of the COPA and COPE is vested with the ruling party (political power over the stakeholder power) • There is no approved methodology to determine public institutions that are to be summoned before committees. The AG’s Department does not have sufficient staff to carry out various audit examinations associated with the numbers of institutions involved in the scrutiny process (dysfunctionalurgency). • Despite the summons were sent to some public institutions, they did not appear before oversight committees. For example, Sri Lankan Airways, Telecom (Lanka) refused to give evidence or to appear before oversight committee indicating that they were not falling under the category of public sector (interview 15, 16) (Identification of firms). Information Technology Services

14. Findings Conti…… • Parliamentarians are exceptional persons cannot be summoned under any conditions ( Power, Authority and Urgency). • The public officers responsible for fraudulent acts are transferred or retired before the completion of hearings of oversight committees (Urgency). • Lack of professionals involvement in the whole process. Therefore, reservations and concerns are raised very often in regard to inadequacy of professionalism and lack of dynamic involvement coupled with deficient knowledge and awareness among those interacted with good governance, accountability issues and control aspects (Urgency). • Both oversight committees, as a device of Parliamentary control, face many criticisms from the stakeholders. As in the case of many reports tabled in the Parliament, the reports of the oversight committees are not debated in Parliament and most of times it disappears without any notice (Urgency). Information Technology Services

15. Concluding Remarks • The public oversight committees have been described as the ‘ultimate institutional judge’ in the ‘ex-post’ process of assurance in parliament regularity, propriety and ‘value for money.’ They are fulfilling public expectations (stakeholders) on pubic money as important guarantors of ‘good governance’. • Have these oversight committees contributed to the good governance? • Some recommendations: • The members of Parliament (including Cabinet ministers) are to be summoned before the oversight committees during the investigations. • The opposition party membership (as stakeholders) in the oversight committee ought to be increased for better transparency on matters relating to various investigations • Reduce undue delays of summoning people and documents for further investigations. Information Technology Services

16. Thank you &QS Please • ,, Information Technology Services