Transcript COPA (Committee on Public Accounts)

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
Content
Background
& Motivation
Objectives
Research Questions
Methodology
Theoretical Framework
Findings
Concluding Remarks
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Background of the Study
Sri 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.
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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.
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Motivation of the Study
Previous Study on oversight committees
Author/s
Year
Paper
Loney, P.
2004
Beware the Gap! – Parliamentary Oversight or Parliament
Overlooked?” A paper for Association of Public Accounts
Committees Conference, Nelspruit, South Africa
McGee, D
2002
The Overseers: Public Accounts Committees and Public
Spending, Pluto Press, London.
Nage, J
2000
The Emergence of the Public Sector Expectations Gap,
International Conference on Accounting, Auditing and
Management in Public Sector Reforms Zaragossa Spain
Saward, M
1996
Democracy and Competing Values”, in Government and
Opposition,
Victoria, V
2000
Report of the Public Accounts and Estimates Committee on
Commercial in Confidence
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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.
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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?
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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.
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Theoretical Framework
Application of Stakeholder theory
( Mitchell et all, 1997. Identification Typology)
Construct
Definition
Source
Stakeholder
Any group of individual who can affect or is affected by the achievement of the
organization objective
Freeman, 1984; Jones 1995;
Kreiner & Bhambri, 1988
Power
A relationship among social actors in which one social actor , A, can get another
social actor, B, to do something that B would not have otherwise done.
Weber, 1947; Dahl,1957;
pleffer,1981
Coercive – Force/threat , Utilitarian – material/incentives and Normative –
symbolic influences
Etzioni,1964
A generalized perception or assumption that the actions of an entity are
desirable, proper, or appropriate within some socially constructed system of
norms, values, beliefs, definitions.
Weber, 1947, Suchman, 1995
influence
Bases
Legitimacy
relationship
Bases
Urgency
claim
Bases
Salience
Wood, 1991
Individual, Organizational and Societal
The degree to which stakeholder claims call for immediate action
Merrian-Webster Dictionary
Time sensitivity – the degree to which managerial delay in attending to the claim
or relationship is unacceptable to the stakeholder.
Eyestone, 1978; Wartick &
Mahon, 1994
Criticality – the importance of the claim or the relationship to the stakeholder
Hills & Jones, 1992
Williamson,19985
“most noticeable or important”
Merrian – Webster Dictionary ,
Oxford Dictionary
The degree to which managers give priority to competing stakeholder claims.
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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.
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General public
Parliament
COPA/COPE
Auditor Ge
MOPClG
F/Minister
Provincials
F/Ministry
Ministers
Ministries
Departments
Local Au
Pra Saba
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F/Depts
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Role of Oversight Committees Conti….
Role of the Committee on P ublic Accounts and Committee on Public Enterprises
Parliame ntary Orde rs
Standing orders
Acts., Polic ies
Reports
AG’s Re ports
-Ministries
-Departments.
Public Enterprises etc.
Composition
-Ruling
- Opposition
COPA &COPE
Powe r to summon
Persons & documents
Pe rformance Evaluation
Public Enterprises
-Reports-AG’s
-Dept. PE
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Resources
-Financial
-Human
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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 (dysfunctional urgency).
• 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).
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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).
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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.
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• ,,
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Thank you
&
QS Please
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