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Is the Auditor General the panacea for all our ills?

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by Avantha Munasinghe

One of the contentious issues surrounding the 20th Amendment seems to be the issue of the removal of Auditor General’s capacity to audit companies where the Government, Public Corporation or a Local Authority has a majority shareholding. Many critics seem to have picked on this issue, and most of them are resisting the proposed change. Their fear seems to be that if the Auditor General is not permitted to audit a certain government company, it is prone to be riddled with corruption and malpractices.

The audit by definition is a systematic and an independent review and investigation on certain subject matter, which in this case is the financial statements, management accounts, management reports, accounting records etc. of a company. In the case of a company, there is a statutory requirement for such review and investigation to be reported to shareholders annually. The review, is produced as an “opinion” of the “Auditor”.

Other than the shareholders, it is also customarily used by the tax authorities, banks, creditors, analysts or public for their respective decision-making and also to form their own opinion about the status of the company and its future. In all the government companies, the law required them to be audited by independent auditors, qualified to do so as specified by the Companies Act, until 2015. The 19th Amendment changed their auditor to be the Auditor General.

Auditing, just like Accounting, depends on certain commonly adopted set of principles. The audit of financial statements is normally done in accordance with International Standards on Auditing sometimes modified by local auditing standards. In Sri Lanka’s case, the Sri Lanka Auditing Standards are based on the International Standards on Auditing (ISAs) published by the International Auditing and Assurance Standards Board (IAASB) of the International Federation of Accountants (IFAC), with slight modifications to meet local conditions and needs. Thus, to begin with, whether it is the Auditor General or a private auditor, the standards applicable to the task are the same. It is the approach that is different.

There are a large number of companies in Sri Lanka whose shareholding in some way is linked to Government or quasi government entities for whom Auditor General has now become the Statutory Auditor. Some of these companies are merely an extension of government entities serving a function of the government. For example, Rakna Arakshaka Lanka Limited is a government-owned company, providing security services to government installations. Another is Ceylon Petroleum Storage Terminal Ltd., whose only customers are its parent entities i.e. Ceylon Petroleum Corporation and Lanka IOC PLC, only to whom it provides services. Such entities do not have to face competition to secure business.

However, there are also a large number of government-owned companies which do business in the marketplace competing with other local and international companies, which are publicly and privately owned. Lanka General Trading Company Ltd., Lanka Hospitals Ltd., Sri Lanka Insurance Corporation Limited and Milco (Pvt.) Ltd., are a few examples. Each of them has to compete for business with large segment of local and foreign companies which are purely driven by profit motive and enhancement of shareholders’ value.

These companies have very flexible systems and procedures. Their boards of directors can take appropriate decisions in a timely manner to make an urgent procurement or select suppliers to be more competitive and manage all their affairs just in time. They can buy their raw materials without calling for quotations if they think it is a profitable opportunity. Even a junior level executive of such a company may be able to decide a price discount to secure a sale.

The situation of a state-owned company in the marketplace in such scenarios is quite the opposite. They cannot do procurement as the situation demands. They have to dutifully follow the procurement rules, which even the board of directors cannot overrule. The officials have very little flexibility to seize a business opportunity. It is so easy for a private company to grab business from state-owned enterprises as the latter cannot be proactive. There is little surprise most such companies are loss-making and is a burden to the government and taxpayers.

The government officials and Ministers however want these quasi state organizations to be profitable or run at least without being a burden to the Treasury. The basic business model of these organizations is at a severe disadvantage to begin with. What 19th Amendment brought to such companies by way of auditing by the Auditor General was to push them from pillar to post. This is quite evident by the powers granted to the Auditor General in the National Audit Act, which even a crime investigator would envy. Some of the powers are:

(1) The Auditor-General shall…

… access or call for any written or electronic records or other information relating to the activities of an auditee entity;

… call any person whom the Auditor-General has reasonable grounds to believe to be in possession of information and documents, as he may consider necessary to carry on the functions under this Act, to obtain written or oral statements and require the production of any document, from any person, who may be either in-service or otherwise;

… examine and make copies of or take extracts from any written or electronic records and search for information whether or not in the custody of the auditee entity;

… after obtaining permission from the relevant Magistrate’s Court, examine and audit any account, transaction or activity of a financial institution, of any person, where the Auditor-General has reason to believe that money belonging to an auditee entity has been fraudulently, irregularly or wrongfully paid into such person’s account;

…require any officer of financial institutions to produce any document or provide any information relating to an account, transaction, dealing or activity of person referred to in paragraph (d) and to take copies of any document so produced, if necessary… There is a fundamental difference in the audit approach of a professional auditor and a Supreme Audit Institution such the Auditor General. In a private sector audit, the primary objective is to ensure the report’s recipient gets a true and fair view of the financial status of the company. While the professional auditor is supposed to report on adequacy of the controls in place and report any lapses to shareholders, the focus is primarily on the status of the shareholder’s investment.

The approach of Auditor General is more on ensuring the Compliance to rules, regulations and procedures. This is natural since the Auditor General is supposed to audit the manner in which a government organization has handled its allocation from the consolidated fund to provide a service to the public. The approach is, therefore, not focused on whether the organization is making adequate return on the government’s funds.

What the 19th Amendment did was to replace the professional auditor, who focused on performance of government companies by the Auditor General who is focused on compliance. The officers running such government-owned companies got a signal quite contrary to what the government officials and ministers were pushing them before. Compliance became the key. There is no better way to achieve compliance than to do nothing. The truth is in the last few years; these organization put profit motive in the back burner and wanted to escape from various audit queries raised by the Auditor General. The best way to do that is not to go that extra mile their competitors would go to make the organization profitable. Doing nothing became the modus operandi.

Some of the supporters of Auditor General’s auditing argue that his mere presence stops corruption. Stamping out corruption was the all-pervasive theme of the 19th Amendment. So many new entities were instituted under it to check corruption. Where are we today? Do we see any positive results? In the Corruption Perception Index published by the Transparency International in the year 2015, when the 19th Amendment was enacted, Sri Lanka’s scored 37 out of hundred. In 2019, our score was only 38. We rank 93 out of 198 countries, four places down. It is no secret that the public perceives state sector organizations as corrupt as ever and certainly more corrupt than any private sector organization in this country. The Auditor General has been auditing these state sector organizations for more than 200 years. If the cure against corruption is audit being done by the Auditor General, why are we in this situation today?

The truth is the Auditor General’s presence is a necessary evil in any government ministry or department, which does not have a commercial objective. His presence does ensure at least some level of corruption is made more difficult to accomplish. However, we must not come into the false conclusion that the presence of the Auditor General is the way to root out corruption. In a State-Owned Enterprise (SoE) with commercial objectives, his presence certainly does more harm than benefit.

There is a wrong perception that most public companies are loss making and, therefore, they should be subjected to an Audit by the Auditor General so that the “control” of public funds will put things right. As explained above, it is the business model and restrictions placed that is the very cause for loss-making SoEs to proliferate. If this argument is correct, we should see, out of more than 120 or so government companies, at last one which became profitable due to the Auditor General’s presence during last five years. There is none to show. In fact, this remedy will only make the patient even more sick.

Another untruth floated on the matter is that the financial statements of the government companies are not required to be submitted to Parliament unless they are audited by the Auditor General and that would undermine parliamentary financial oversight. The truth is that the entity, which is the shareholder in these companies, have to consolidate the company’s financial statements with that of the parent entity and the latter is certainly subjected to parliamentary oversight with financial statements of the company audited by a private auditor.

Another misconception is that supervision by COPE will put everything right in the public institutions. COPE’s examination carried out by set of parliamentarians, who on most occasions have no knowledge of the particular business, is not what is required to put these organizations right. In most cases it is the bad business model rather than lack of COPE’s oversight that fail these businesses.

SriLankan Airlines is a case of point. Many people say the bad procurement deals, continued losses and increased dependence on the Treasury by the airline would continue to happen if the Auditor General is not auditing the airline. It was making losses ever since it was set up with or without Auditor General as the auditor. The Airline business is one of the most competitive businesses globally. Even the largest airlines sometimes find it difficult to be in the black. The industry needs split second decisions to be made by professional management. As said before, this is not possible at SriLankan Airlines. We have seen Chairmen and Directors coming and going with every change of the subject minister. Nobody is having a long-term commitment to make it a success. Its competitors have boards, which are removed only if the airline makes losses, not if their political masters change. Without changing the business model, even if we have hundred auditors to audit SriLankan Airlines, nothing will change.

We all know that our country is suffering from a severe debt crisis. We invested on massive infrastructure projects, which were all debt financed. To balance that off, we desperately need to bring foreign equity into our economy. Further debt, while giving us temporary solace, will only aggravate the problem. The government is devising Public Private Partnership (PPP) programs to bring Foreign Investment from large global corporations. The government also needs to be in control of them. The 19th Amendment requires such PPP companies to have the Auditor General as its Auditor. Which global business entity would drop their global audit arrangements by the likes of KPMG, Ernst & Young or PwC and accept this arrangement? We can talk till the cows come home on how professional our Auditor General is and how independent he is, but the reality is that we live in a dream if we seriously want to promote PPP structures with this kind of legislation on.

The effective functioning of Superior Audit Institutions such as the Auditor General is definitely an essential requirement of a functioning democracy. However, let’s not fool ourselves – it is not a panacea for all ills.

Even in India where the previous Companies Act required the appointment of Auditors to Government Companies by the Controller and Auditor General of India, the arrangement has been questioned in the Report of the Expert Committee On Company Law, which said “The Committee discussed the application of the corporate law framework to Government companies on many occasions and took the view that in general, there should not be any special dispensation for such companies. …Therefore, the extension of special exemptions and protections to various commercial ventures taken up by Government companies in the course of their commercial operations along with strategic partners or general public should be done away with so that such entities can operate in the market place on the same terms and conditions as other entities. In particular, reflection of financial information of such ventures by Government companies and their audit should be subject to the common legal regime applicable. The existing delays are enabling a large number of corporate entities to evade their responsibilities and liability for correct disclosure of true and fair financial information in a timely manner. In this context, the relevance of the present section 619B of the Act was considered appropriate for a review.”

If the government needs its companies to compete with private sector, the way forward is to make their management more flexible. Throwing those decision-makers to the Auditor General is the last thing required to be done if we want them to compete effectively with the private sector. While the world is moving to embrace the scarce private capital by making things easier for such investors, some of our so-called professionals seem to be, while paying lip service for bringing more and more FDI, doing exactly the opposite by criticizing the removal of this disastrous piece of legislature brought in by the 19th Amendment.

(The writer is an Accountant based in New South Wales, Australia)



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Picked from the Ends of the Earth he became the Pope of the Peripheries

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Pope Francis (1936 – 2025)

“You know that it was the duty of the Conclave to give Rome a Bishop. It seems that my brother Cardinals have gone to the ends of the earth to get one, but here we are.” That was then Cardinal Jorge Mario Bergoglio from Buenos Aries, Argentina, and newly elected as Pope Francis on 13 March 2013, addressing the throng of faithful Christians and curious tourists from the papal balcony of Saint Peter’s Basilica in Rome. “Sacristy sarcasm,” as a Catholic writer has aptly described it, was one of many endearing attributes of Pope Francis who passed away on Easter Monday after celebrating the resurrection of Christ the day before. Francis was the first Jesuit to become Pope, the first Argentinian Pope, and the first Pope from outside of Europe in over a 1,000 years.

He broke conventions from the outset, preferring the plain white cassock and his personal cross to richly trimmed capes and gold crucifixes, and took the name Francis not after any preceding Pope but after Saint Francis of Assisi, the 13th century Italian Catholic friar, one of Italy’s patron saints and the Church’s patron of the environment. Born to immigrant Italian parents in Argentina, the quintessential periphery of the modern world order, Pope Francis became the Pope of the world’s migrants, its peripheries, and its environment. The protection of migrants, the theme of the peripheries and the stewardship of the environment have been the defining dimensions of the Francis papacy.

Addressing the cardinals before the Conclave, Francis called on the Church to “come out of herself and to go to the peripheries, not only geographically, but also the existential peripheries”. Francis was the first Pope to break the Eurocentric matrix of the Church. His predecessor from Germany, Pope Benedict XVI, had been an unabashed Europhile who had expressed concerns over non-Christian Turkey joining the European Union and was known for his views alluding to violent aspects of Islam.

In contrast, Francis dared to take the Church “beyond the walls” and to reach out to humanity as a whole. His October 2020 encyclical, “Fratelli Tutti,” (Fraternity and Social Friendship), was an inspired call to fight the dominant prejudice of our time targeting Muslims. Muslims and Christians in the Middle East are among the more vocal in sharing their grief at his passing. He has consistently called for unity in their battered lands, “not as winners or losers, but as brothers and sisters”. During the devastation of Gaza after October 2023, he kept close contact with priests in Gaza and practically called them every night until his recent illness.

Within the Church, Francis recast the College of Cardinals to make it globally more representative and reduce its European dominance. The 135 cardinals under 80 years who will conclave to elect the Francis’s successor include 53 cardinals from Europe, 23 from Asia, 20 from North America, 18 each from South America and Africa, and three from Oceania.

His first encyclical in 2015, Laudato Si’” (“Care for our Common Home”) on the environment, was again a first for the Church, and it became the moral manifesto for climate change action both within and outside the Church, and a catalyst for consensus at the historic 2015 Paris Climate Change Conference. The encyclical focuses on the notion of ‘integral ecology’ linking climate crisis to all the social, political and economic problems of our time. The task ahead is to take “an integrated approach” for “combatting poverty, “protecting nature” and for “restoring dignity to the excluded”.

The 12 years of the Francis papacy were also years of historical global migration from the peripheries and the social and political backlashes at the centre. In one measure of the problem, there were 51 million displaced people in the world in 2013 when Francis became Pope, but the number more than doubled to 120 millions by 2024. Pope Francis countered the political backlash against migration by projecting compassion for the migrants and the marginalized as a priority for the Church. He famously rebuked Trump in 2015 when Trump was foraying into presidential politics and touted the idea of a “big, beautiful wall” at the US-Mexican border, and said that building walls “is not Christian.”

In January, this year, Pope Francis called out US Vice President JD Vance’s flippant interpretation of the Catholic concept of “ordo amoris” (the order of love or charity) to justify Trump’s restrictive immigration policies. Vance, a Catholic convert since 2019, had suggested that love and charity should first begin at home, could then be extended to the neighbour, the community, one’s country, and with what is left to see if anything can be done for the rest of the world. America first and last, in other words.

The Pope’s rejoinder was swift: “Christian love is not a concentric expansion of interests that little by little extend to other persons and groups. The true ordo amoris that must be promoted is that which we discover by meditating constantly on the parable of the ‘Good Samaritan,’ that is, by meditating on the love that builds a fraternity open to all, without exception.” The Pope went on to condemn the Trump Administration’s conflation of undocumented immigrant status with criminality to justify their forced deportation out of America.

Papacy and Modernity

The Catholic Church and the papacy are nearly 2,000-year old institutions, perhaps older and more continuous than any other human institution. The papacy has gone through many far reaching changes over its long existence, but its consistent engagement with the broader world including both Christians and non-Christians is a feature of late modernity. The Catholic journalist Russell Shaw in his 2020 book “Eight Popes and the Crisis of Modernity”, provides an overview of the interactions between the popes of the 20th century – from Pius X to John Paul II – and the modern world in both its spiritual and secular dimensions.

The dialectic between the popes and modernity actually began with Pope Leo XIII of the 19th century, whose 1891 encyclical Rerum Novarum was a direct response to the spectre of socialism in the late 19th century and elevated property rights to be seen as divine rights located beyond the pale of the state. As I have written in this column earlier, in Fratelli Tutti, Pope Francis falls back on anterior Christian experiences to declare that “the Christian tradition has never recognized the right to private property as absolute or inviolable and has stressed the social purpose of all forms of private property.” He also moved away from the Church’s traditional privileging of individual subsidiarity over the solidarity of the collective to emphasizing the value of solidarity, decrying the market being celebrated as the panacea to satisfy all the needs of society, and calling for strong and efficient international institutions in the context of globalized inequalities.

Popes of the 20th century have grappled with both secular and spiritual challenges through some really tumultuous times including two world wars; the rise and fall of fascism and Nazism, not to mention communism; the liberation of colonies as nation states; economic depressions and recessions; the sexual revolution; and, in our time, massive migrations, climate change, never ending conflicts, and most of all the growing recognition of the centrality of the human person including the recognition and realization of human rights.

In varying ways, the popes have been advocates of peace and provided moral and material support to resolving conflicts around the world. Pope Francis has been more engaged and more ubiquitous than his predecessors in using the papacy to good effect. His Argentinian background gave him the strength and a unique perspective to take on current political issues unlike the Italian popes of the 20th century; the Polish Pope John Paul II who had quite a different experiential background and therefore a different agenda; or Benedict XVI who was mostly a German theologian.

A pope’s ultimate legacy largely depends on what he did with the Church that he inherited, both as an institution and as an agency, and what he leaves behind for his successor. As the Catholic Historian Liam Temple, at Durham University, has observed in his obituary, “Pope Francis embodied a tension at the heart of Catholicism in the 21st century: too liberal for some Catholics and not liberal enough for others. As such, his attempts at reform necessarily became a fine balancing act. History will undoubtedly judge whether the right balance was struck.” At the same time, Pope Francis’s broader legacy could be that he irreversibly brought the spatial and social peripheries of the world to the centre of papacy in Rome.

by Rajan Philips

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LESSONS FROM MY CAREER: SYNTHESISING MANAGEMENT THEORY WITH PRACTICE

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Part 10

Wrapping up in Japan

I was sorry that my wonderful stay in Japan was coming to an end. The Industrial and Systems Engineering course had come to a close. My wife, too, joined me for the last week. The Asian Productivity (APO) organizers of the course were very gracious in inviting her to the closing ceremony and the farewell party.

All the participants were excited about putting what we had learned into practice. In fact, we had to submit a work programme we hoped to implement upon returning to our home countries. The APO and AOTS (Association for Overseas Technical Scholarship) staff left no stone unturned to give us theoretical and practical knowledge over these three months. We were so grateful to them.

My wife and I had planned some interesting sightseeing, but nothing went according to plan. We had planned some excursions from the day after the course finished, but the TV announced early morning about an impending typhoon, advising everyone to stay indoors. The joke by the Philippines participants that “the only things they export to Japan are typhoons” came true.

Most typhoons originate near the Philippines and head towards Japan mainly in September. The “all clear signal” came only in the afternoon. The other trip we went on was to the amusement park at Lake Yamanaka at the foot of Mount Fuji. It was a disaster because it was the sunniest Saturday of that summer, and everyone was going in the same direction. The usual two-hour trip became six hours, and by the time we got to the park, it was time to leave on our pre-booked return bus. We just had time for a short paddle boat ride.

Stopover in the Philippines

As I had mentioned in an earlier episode, The Ceylon Tyre Corporation, where I was the Industrial Engineer, had a technical collaboration with BF Goodrich, a global tyre manufacturer with plants in several countries. They arranged for me to visit their plant near Manila.

If my memory is correct, I recall that the Sri Lanka rupee was stronger than the Philippine peso at that time. We were picked up at the airport by the Plant Manager, and the first thing he told my wife was, “Don’t ever wear that chain when you go out”. He told me, “Never wear that wristwatch when you go out”.

On the way to the hotel, the police checked the car. We were asked to get out and were checked. Immediately, I formed a negative opinion of the country. Apparently, there were some bomb explosions in the city. Marcos’s term was coming to an end. The general gossip was that Marcos had engineered the bomb blasts so that he could continue with Martial Law.

In 1980, Sri Lanka had no checkpoints, nor was anyone checked. When I entered a mall in the evening, the security guard thoroughly checked my wife’s handbag and my camera case. I was surprised at these checks. A couple of years later, Sri Lanka was in the same boat.

The factory visit was great. I was struck by the comparison that at the Ceylon Tyre Corporation, we made 1,000 standard tyres with 2,000 employees, while at the BF Goodrich factory they made 2,000 tyres with 1,000 employees. Our labour productivity was awful. However, I learned a few things that we could improve back home.

Back at work

Returning to the factory and resuming my job as the Industrial Engineer, I implemented some changes. Still, I found a lot of resistance from many others. I was determined to implement the famous Japanese “Quality Circles”, where non-executive employees are trained and empowered to analyze production and quality problems and proceed in a systematic way to find the root causes, generate solutions and implement them with management approval.

BF Goodrich New York sent a set of success stories and failures of Quality Circles from the USA and Europe. The year 1980 was the peak of the popularity of Quality Circles, and almost every journal, whether it was Engineering, Accountancy, Personnel Management, or Management, had articles about this new technique from the mystical Far East.

I wasn’t making much progress with Quality Circles, and a colleague told me it would never succeed because the Chairman was a non-believer in the participative style of management. The workers immediately erased the factory floor lines I managed to paint. Change was not favoured.

I discussed my frustrations with my immediate boss. I explained my desire to implement many new methods I learned in Japan and expected him to remove these obstacles. He pondered and said, “OK. Give me three months”. After three months, I had not noticed anything new or any change in attitude, so I confronted my boss again. He leaned back in his chair, smiled and said, “When I completed my MSc and returned, I faced a similar situation, but in three months, my enthusiasm had vanished. I expected the same to happen to you, so I promised that all your frustrations would be over in three months. I never bargained for your enthusiasm to remain”.

Since I had no role to play now and had implemented many new things, I decided it was time to seek better opportunities elsewhere where I could experiment with my newly gained knowledge.

Seeking New Opportunities

I had applied to a few other places and was selected, but I was still unhappy with the emoluments package. Nothing could match the salary and incentives at the Tyre Corporation despite my new position being at a much higher level. However, the Co-operative Management Services Centre (CMSC), later renamed the Sri Lanka Institute of Co-operative Management (SLICM), offered me the post of General Manager.

Unfortunately, I was informed by the Tyre Corporation that I have to complete the three-year obligatory period because of my training in Japan and that I cannot resign now. I had to decline the lucrative CMSC offer.

The Tyre Corporation was finding it difficult to find a replacement for the post of Finance Manager despite repeated advertisements. Even the previous Finance Manager was partly qualified. I, as the Industrial Engineer, was the only fully qualified Accountant. However, I had not worked a single day as an accountant.

I was very close to the Finance and Accountancy Division staff because my work involved a lot of information from Accounts for my performance analysis. When the advertisement for a Finance Manager (Head of Finance) appeared once more, the staff of the Accounting Division wanted me to apply, assuring me of their fullest support.

They probably went on the premise that the known devil is better than the unknown. I applied, and the Board of Directors interviewed me and asked me only one question: “Are you sure you want this post?” I said yes, and they all said, “Then the post is yours”. Nothing happens in Corporations until the minutes are confirmed at the next Board meeting.

While waiting for the next Board meeting, I heard that the CMSC vacancy was still unfilled. It has been six months since my interview there. I also heard that the Minister responsible for CMSC was in a dilemma because the two internal candidates for the post were from families known to the him, and he did not want to displease the one who would not be selected.

At the same time, my sister, who was Senior Assistant Secretary (Legal) to the Ministry of Justice, took me to meet Mr. S B Herath, the Minister of Food and Co-operatives. Immediately, he ordered CMSC to pay my bond, which was down to half its value by then and bonded me for two years at CMSC instead. He said, “This is only an intra-Government bookkeeping transaction”, so it’s not an issue. The Minister’s dilemma was sorted. An outsider was the better choice. He was probably displeased both internal candidates.

The day before the next Board meeting of the Tyre Corporation, the General Manager asked me to meet him and announced the contents of the letter he had received from the Ministry of Co-operatives. I confirmed my decision to take up the appointment at CMSC. When he got to know of my decision, the Chairman of the Tyre Corporation, Mr Justin Dias, tried to persuade me to remain, but I declined.

Later that evening, my uncle, Mr Sam Wijesinha, a former Secretary General of Parliament and later the Ombudsman, visited me, claiming that Mr Justin Dias had said I was making a terrible mistake. I explained that I knew the new place well because of their pioneering studies in improving co-operative societies with Swedish experts.

My uncle finally accepted my reasoning. My father’s approach was different. He said that even if it is a terrible place, you should take it if you have the courage and ability to turn it around. CMSC paid the bond, and I left the Tyre Corporation.

Moving to the CMSC

The CMSC was set up to provide advice, consultancy services and training for all types of Co-operative Societies. It was also an advisory body that advised the Minister if needed. During the closed economy, it conducted many useful projects such as queue reduction, form design, system design, and other work for the co-operative sector. The consultants were from Agriculture, Industry, Industrial Engineering, and Marketing. This is why the board preferred a multidisciplinary person to head the organization, and I fitted the bill. In addition to the consultants, there was the Administration Division, Documentation division and the support staff.

The previous incumbent of my post was Mr Olcott Gunasekera, who was the Chairman and General Manager. He had retired as the Commissioner of Co-operative Development and then taken the post at CMSC. Subsequently, he resigned from CMSC. When I arrived, the Chairman was Mr P K Dissanayake, who was still the Commissioner of Co-operative Development as well.

On my first day, I understood the culture of the new place. Being taken around, I was introduced to the staff and the building. We were on two floors of the MARKFED building in Grandpass. On my rounds, I noticed that one room shared by two consultants had no window curtains, but all other rooms had. Upon inquiry, I was informed that the two consultants had divergent views about the curtain. One wanted the curtains fully open, while the other wanted them fully closed. One morning, they discovered that the curtains had mysteriously vanished overnight. They were never replaced.

I did not see much enthusiasm at the staff meeting; most were with dull faces. Perhaps they disliked being bossed by a 33 year old General Manager. There was no vibrancy. The issues brought up were mostly petty issues. The next day, one consultant walked into my office with his cup of tea and blamed the administrative officer for the tea’s poor quality and lack of cleanliness. It was shocking. I had hoped they would be ready with plans to revive the co-operative sector rather than surface petty issues.

I realized that a complete overhaul of the culture was necessary. Most staff members were late to the office, and my first task was to issue a circular about being punctual and that there would be no grace period. Suddenly, all support staff, led by an “unofficial leader”, barged into my office about the circular. They had done their homework and found that many government organizations had a grace period except Tyre Corporation.

I stuck to my decision, and people got the message that I meant business. I transformed the sleepy office towards a more vibrant environment by organizing several training seminars for co-operative society staff. The sleepy office sprang to life, with even the idling drivers helping to fold and post the circulars. The place was beginning to change gradually. The older consultants gradually left with new opportunities brought about by the newly opening economy. I was sorry to lose the good experience, though.

More about CMSC in the next episode.

Sunil G Wijesinha

(Consultant on Productivity and Japanese Management Techniques

Retired Chairman/Director of several Listed and Unlisted companies.

Awardee of the APO Regional Award for promoting Productivity in the Asia and Pacific Region

Recipient of the “Order of the Rising Sun, Gold and Silver Rays” from the Government of Japan.

He can be contacted through email at bizex.seminarsandconsulting@gmail.com)

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Four post-election months as Chairman SLBC and D-G Broadcasting

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I was Chairman of the Sri Lanka Broadcasting Corporation and Director-General of Broadcasting only for a period of a little over four months, before I was reassigned. Therefore, a lengthy account of my stewardship in this post would not be necessary. I would however, like to briefly touch upon some salient issues. Firstly, on the management side, I found the organization to lack sufficient vigour. There had developed a looseness dangerously bordering on the careless.

For instance, a Sinhala news reader, who had to do the 6.30 a.m. news bulletin came late by about ten minutes, delaying the station’s opening, in spite of the fact that a car was sent to her residence to pick her up. She had to be sent on compulsory leave pending an inquiry. A large number of employees had got into the habit of aimlessly walking the corridors. That had to be stopped. There were employees playing carom in the canteen, during office hours. The carom boards had to be taken into custody and released only during the lunch hour and after 5 p.m. Stern action was promised against anyone smelling of liquor.
‘The Directors of the divisions were enjoined to have a regular monthly meeting with their staff and the minutes of the meetings sent up to me. I met the Directors once a fortnight. I met the Trade Unions representing all parties and groups regularly. Through these meetings we were able to identify a long checklist of items that needed to be worked on and followed up. The list was then prioritized and specific time periods set for completion of action.

In some instances we later found, that implementation was on schedule, but the quality of the implementation poor. Quality checks were then installed. For some reason, the annual administration report of the Corporation had not been published for a number of years. Therefore, the reports and accounts had not been laid before Parliament. The rectification of this situation was begun. All in all, the entire administration and management of the institution had to be toned up and a degree of rigour injected into the system. This process was set in motion.

On the programme and quality side too, a great deal of collaborative effort had to be put in. Here, unfortunately, we did not have a free hand. Politics came into contention. During the period of the previous government some radio artistes, especially singers had been sidelined allegedly on political grounds, Now with a five-sixths majority in Parliament the rulers wanted to make up for lost time, and virtually demanded five-sixths of programs. The genre of many of them was Sinhala pop, and although I resisted consistently and continuously creating a serious imbalance in the Sinhala music programs, this happened. This initial surge could not be stopped, although towards my last month in office things were coming more into balance.

Amongst the varied programme activities, I was particularly interested in a program initiated by Mr. C. de S. Kulatillake on regional customs, dialects, and language peculiarities, including the Veddah language. We did not have television at this time and there was the danger, that with increased urbanization and migration, some of these linguistic and cultural aspects would be lost forever. I therefore, heavily backed Mr. Kulatilleke’s research and recordings and found ways and means of finding extra funds to sustain his program.

Practical Problems

In an era of non-existent T.V., radio in Sri Lanka had a powerful countrwide reach. Therefore, it naturally attracted the attention of politicians. This was not a healthy situation. Each one vied for more airtime. Each one kept tabs on the news bulletins and was disappointed and angry that their rivals and competitors appeared to get greater exposure. They all felt they were doing great things, but the SLBC only gave publicity to their rivals. This was a serious problem. It tended to disturb the balance of programming and the fair presentation of news.

On the other hand, it was also personally galling. Politicians, including Ministers, telephoned me with a degree of irritation and anger. Some of them accused my staff of partisanship and insisted on giving details of producer X’s close connections with Minister Y, leading to Minister Y getting undue and disproportionate publicity. Others, mercifully just a very few, accused me of trying to bring the government into disrepute. Apparently, according to this thinking the reputation of the government would depend to a large extent on maximizing the sound of their voices on radio.

To add to those woes was Mr. Premadasa, Minister of Local Government Housing and Construction and No. 2 in the UNP. He was obsessed with publicity to the point where all of us including the JSS felt that it was counter productive. He was happiest when arrangements were made for the country to hear his voice in abundance. None of us had a choice in this matter. But I got the flak, including some abusive phone calls, inquiring whether I was stooging Mr. Premadasa! Such are the difficulties of public servants who find themselves in the middle of political dog-fights.

To restore a degree of balance and equilibrium was exceedingly difficult, and it is to the credit of many in the Corporation, that as professional broadcasters, they resisted as far as possible irrespective of their party affiliations. Such resistance had my full encouragement and backing. The Corporation was not the United National Party Broadcasting Corporation or the Sri Lanka Freedom Party Broadcasting Corporation. It was the Sri Lanka Broadcasting Corporation set up by Parliamentary Statute. Therefore, as best as possible, Sri Lanka had to be served.

As Chairman of the Sri Lanka Broadcasting Corporation, I was also Ex-officio a member of the Board of Directors of the State Film Corporation. This was for me, a fascinating field and during my brief tenure there, I tried to bring whatever skills and experience I had, to the better management of the Corporation, as well as encouraging the beginning of a serious dialogue and reflection on policy.

The Artistic Temperament

Besides politics, the other central issue in the internal dynamics of the Corporation was the one of managing the artistic temperament. Artistes were sensitive people. Some of them were very talented. The problem was that the combination of these two qualities also made them very opinionated and often temperamental. Disputes among them were many. Some of them belonged to different schools of music, and had strong views about those of other schools. Some of them thought that they were trained in better musical academies than others. Some thought they had more modern views, which had to be given greater respect and weight.

Underlying these varied views was also the pervasive pressure of commercial competition. An Artiste’s standing in the Corporation was convertible to cash by way of a larger number of invitations to private shows, prospective work with recording companies, and other benefits. Given all these circumstances, an important preoccupation was the settling of squabbles among them, squabbles which threatened the smooth programming that was necessary in order to sustain a large variety of music programs, nvolving substantial broadcast time. I was to encounter later, similar problems with artists and artistes when I became Secretary to the Ministry of Education and Higher Education.
Within a day or two of our arrival in Sri Lanka (from a conference in Belgrade), I received a telephone call from Mr. S.B. Herat, Minister of Food and Cooperatives. He asked me to come and see him. I had neither known nor met Mr. Herat before. But I knew him by sight. When I saw him at his Campbell Place residence, where he stayed with his brother, after asking a few questions, he invited me to become the Secretary to his Ministry.

Mr. K.B. Dissanayke of whom I had written about in a previous chapter, was retiring from service. I inquired from Mr. Herat as to whether my present minister Mr. D.B. Wijetunge was aware that he was going to make this offer to me. He said “No”, but he would be speaking to him. I told him I was sorry, but if my present minister had not been informed, it was not possible for me to continue with this conversation.

This was the tradition we were brought up in. One did not discuss a matter like this behind the back of one’s minister. In fact, I remember the instance in the 1960’s when Mr. D.G. Dayaratne, a senior civil servant who was then functioning as the Port Commissioner when called by the Prime Minister Mrs. Bandaranaike and offered the post of Secretary to the Cabinet declined to discuss the issue, because she had not informed his Minister Mr. Michael Siriwardena. Mr. Dayaratne was later appointed, after the formalities had been concluded.

In my case, Mr. Herat was apologetic and said he would not discuss the matter further, but only wished to know whether I would serve if there was general agreement. I said, “Yes” and that this was based on a principle I followed, of taking up whatever assignment the government of the day wished me to undertake. Mr. Herat appreciated this, and we parted. As I was leaving he said “Please don’t mention this conversation to anybody. I will be clearing matters with your minister and the Prime Minister.” (Mr. Jayewardene was not President yet.)

I promised not to. Matters rested at this for two days. On the morning of the third day which was a holiday, where I had decided to go to the (radio) station later than usual, the telephone at home rang at about 9.30 a.m. The Minister of Lands and Irrigation Mr. Gamini Dissanayake was on the line. He said “Dharmasiri, what are you wasting your time at SLBC for? We are forming a new Ministry of Mahaweli Development. Join me and become its secretary.”

I was now in a serious quandary. I couldn’t tell him that the Food Minister had already spoken to me. I had promised to keep that conversation secret. I therefore rather lamely told Mr. Dissanayake that I knew nothing about irrigation systems or river diversions, and that it was best for him to look for someone with some experience in that area. I suggested Mr. Sivaganam, who was his Secretary in the Ministry of Lands. But Mr. Dissanayake was not to be so easily diverted.

He merely said, “No, you will pick it up in three months. It’s going to be an enormous challenge and a great creative endeavour. Please come. I will speak to the prime minister.” I reminded him that he should speak to my minister first. He promised to do so. To my relief, he did not request me to keep this conversation confidential. I therefore, rang Mr. Herat and was fortunate to find him at home. I requested an immediate appointment. I said that the matter was urgent. He asked me to come.

When I told him what happened, he was visibly upset. He thought that Mr. Dissanayake knew that he was interested in getting me. I told Mr. Herat that the last thing I wanted was to be in the middle of a tug of war between two ministers and to please understand that the present situation was none of my seeking. He was very understanding. He agreed that I should not be misunderstood by anyone.
Mr. Herat told me later that the matter was finally resolved in Cabinet. Both Ministers had argued for me. What had finally clinched the issue had been my previous experience as deputy food commissioner. The government was about to launch a major food policy reform, and they finally concluded that my presence in the food ministry was more important at the time.

Thus it was, that one afternoon, when I had just finished seeing off the French Cultural Attache (at SLBC), who had come to present some recordings of French music, an envelope bearing the seal of President’s House was hand delivered to me. It contained a letter from the Secretary to the President intimating to me that the President was pleased to appoint me as Secretary to the Ministry of Food and Co-operatives “with immediate effect.”
One could not however, abandon responsibilities involved in the only national broadcasting facility “with immediate effect.” What I did “with immediate effect” was to call a series of emergency meetings with all the relevant parties including Heads of Divisions, Trade Unions, and other important persons. The news of my imminent departure spread rapidly, and large numbers of employees sought to see me to express their shock and regret.

Inbetween meetings, I had to find the time to speak to them, however briefly. I had enjoyed good relations with everyone and I felt somewhat sad at the prospect of this sudden departure. I had to dissuade employees and trade unions going in delegation to see the Minister to protest at my going. Amongst the unions, one of the most affected seemed to be the JSS, the same union that protested at my appointment. Now they wanted to protest at my departure. This too, I successfully stopped.

The SLFP Union was extremely unhappy. They had felt secure because of my presence. Now they felt quite insecure. They did not know what type of person would succeed me. My Directors of Divisions were very upset. One of the problems was that to everyone this was a sudden blow. They did not possess my knowledge of the background to all this and I was of course sworn to secrecy.

My meetings went on till near midnight. I myself had not anticipated that my new appointment would come so fast. Therefore, there was much to discuss and decide on, particularly fairly urgent and important matters that would come up during the following few weeks. Then there were important matters to be pursued, both of a bilateral and international nature, consequent to the Non-Aligned Broadcasting conference. I had virtually just come back from that meeting. Responsibilities for follow up action had to be allocated. It turned out to be an exhausting day, and finally when I left the station for the last time another day had dawned.

(Excerpted from In Pursuit of Governance, autobiography of MDD Peiris)

 

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