Sense and Sensibility
Posted on February 12th, 2018

S. Navaratne  


One feels somewhat disconcerted when a highly respected public servant makes comments that go far and beyond his remit albeit in his view to further yahapalana aims. The job of the Auditor General on matters relating to public debt is to provide to the public evidence based facts after stringent auditing of the Government`s domestic and foreign debt. It should include full disclosure of dummy accounts; accurate Government borrowings (foreign and local) to bridge the shortfalls of revenue to meet Government current and capital expenditure; aggregating  figures of annual interest on government foreign and local borrowing separately and their impact on the rise in foreign and local debt annually, and a breakdown of assets created  from borrowings. Likewise it is within his remit to quantify the monetary losses from waste, corruption and named irregularities.

In his recent media briefing, however, the Auditor General made a string of political, economic, administrative assessments including (i) the President should not be Finance Minister too, (ii) questioning so-called unproductive investments and (iii) the country faces an unprecedented massive debt crisis.

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Do these assessments undermine public perception of the role of the Auditor General? The allocation of Cabinet portfolios surely is a political decision best left to politicians.

So, too, the government priorities on revenue and expenditure. It is a political decision, for example, for Governments to decide how much the Government borrows to construct public goods such as schools, hospitals, public toilets, playgrounds, roads for which there is little or no money return on investment. These investments on public goods from borrowed money may not generate income but conform to government policy. It is disingenuous, moreover, to say that there is nothing to show from borrowings for public goods even though the current value of these investments are deemed low for accountancy purposes.

The Auditor General view that the country is in the midst of a “massive debt crisis” is an opinion, some would say an egregious exaggeration of the situation. The truth is that it depends on “unknown unknowns” such as future surpluses or deficits in the Budget, net inflows of foreign exchange on services such as remittances and tourism, and on FDI. Last but not least, the pieces of family silver such as the Hambantota port, the Mattala airport, the Trincomalee oil tanks and the Trincomalee port that the Prime Minister flogs for dollars to pay off debts that have vastly increased in the past three years. Moreover, intact for sale if required to pay off debts are the “Crown Jewels”, the Government holdings in banks and the financial sector that are worth billions of dollars. Crisis? What Crisis?

No one disputes that the forthcoming National Audit Bill should provide wide-ranging powers to the National Audit Commission with regard to accounting and auditing of government financial activities, publicizing its shortcomings as well as making recommendations for changes.  Is there a case, however, for the National Audit Commission and its staff to have license to go beyond evidence and facts and give opinions of a political and economic nature regarding public policy? Commonsense suggest that public officials should be discreet on matters outside their remit.

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