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Holding ministers responsible for

exercising power

by R. M. B Senanayake-June 23, 2015

Since 1956 financial power has been exercised not
by the secretaries or the heads of department as required in the Financial
Regulations but surreptitiously by the ministers who influence the decisions
of the secretaries and heads of department and the tender boards. They
invariably have their way for the Secretaries hold office at the will and
pleasure of his minister. If we want good governance we can either revert
to the past and keep the ministers away from interfering in financial
matters or holding them directly responsible for the financial management
of their ministries and make the financial regulations binding on the
ministers, too, because at present the financial regulations are only issued
by the Treasury and only a law can bind the ministers to observe them.
The allegations of corruption on the part of the previous President and his
ministers arise from giving contracts to their favourites without calling for
tenders, accepting unsolicited offers and awarding contracts at exorbitant
or excessive prices padding their commissions into such offers. These are
violations of the financial regulations. Are they covered by our bribery and
corruption Law? I don’t think so, but would welcome opinions of our
learned lawyers.
The contracts are not signed by the ministers. Nor are their orders minuted
in the files. They are mere oral instructions or hints taken seriously by the
officers in charge of the actual decision making. HOW THEN CAN THEY BE
HELD RESPONSIBLE?

The responsibility for financial management is vested not with the
ministers or the President as the Minister of Finance but only with the
secretaries and heads of department as the chief accounting officer and
accounting officer. But, in practice the minister intervenes and decides to
do away with tenders, accept unsolicited offers and award tenders to their
favourites at excessive prices padded by their own commissions. So, who
should be held responsible for any irregularity with regard to them? Under
the present law only the secretaries and heads of department are held
accountable however unfair it may be.
Other countries have enacted laws such as the Canadian Financial
Administration Act where in the responsibility for financial management is
vested with the ministers. The World Bank prepared a draft law—the Public
Finance Act of 2002—which provided for the same. But, it was not passed.
Will the new government pass such an ACT which holds ministers
responsible?
New legislation should be brought in to divide financial responsibility and
accountability between the Minister and his officials. Good governance is
seen by economists as a key factor in ensuring national development and
prosperity. It must find expression through indicators like reliability,
predictability and accountability of decision-making. It involves such
factors as the rule of law, transparency, accountability and public service
ethics.
Financial Accountability
Accountability can be understood in two senses. In a narrow, technical
sense it refers to the duty of the head of a department to account as
‘accounting officer’ to his or her Minister, the Auditor-General, and finally
the Public Accounts Committee. At a basic level accountability means ‘to
give an account’ of actions or policies, or ‘to account for’ spending and so
forth. On a wider understanding accountability can be said to require a
person to explain and make amends for any fault or error and takes steps
to prevent its recurrence in the future. What is the position regarding
these matters in our country today? There has been a total institutional
collapse in them over the years since 1956. We need to restore the
institutions and laws to ensure accountability
Previously, I referred to the important provisions of the Public Finance Act

2002 prepared by the World Bank which was not passed by the then
government or its successors. Consider the controversy regarding the bank
account maintained by the former Defence Secretary which credited the
revenue from land sales to the account and also held a large amount of
money exceeding what the Treasury normally allows departments to hold.
These matters are laid down in the above draft law. Such controversy
arises because these matters are not laid down by law.
Law versus Convention
Which should it be? Many matters in the British system of government are
governed by conventions rather than laws. So, even the financial
accountability of ministers is governed by convention. During the colonial
period we followed this British tradition and gave financial powers to the
Secretaries and Heads of Department. These officers then had a personal
responsibility for the propriety and regularity of the public finances for
which they are answerable; for the keeping of proper accounts; for
prudent and economical administration; for the avoidance of waste and
extravagance; and for the efficient and effective use of all the available
resources." (D.E Smith).
The Chief Accounting Officer is personally responsible in areas for which
the minister himself also remains responsible. It is still accepted that the
elected minister controls the bureaucracy and is also answerable in
Parliament for their actions. Such are the conventions in the UK. But,
conventions don’t work except in Britain and not even in countries with
Anglo-Saxon traditions like Australia or Canada. So, it is necessary to
examine the position regarding financial accountability in other countries
following the Westminster System like Australia, Canada, the UK and New
Zealand.
Following convention, the respective responsibilities of the minister and the
officials were not made law in Britain. The same anomalous position
remains in our system of government today as well. But, this division of
responsibility between the Minister and his Secretary and Heads of
Department must be clearly demarcated. It has not been left to
conventions even in countries like Australia, New Zealand and Canada.
They have been laid down by law or at least by a Code of Conduct which is
binding and enforceable by Parliament.

There is the Canadian Financial Administration Act which delineates the
respective responsibilities of the Minister and the officials. It lays down the
Accountability of Accounting officers within the framework of ministerial
accountability in section 16. In Canada, senior public servants, who are the
heads of government ministries or departments, are given the title of
Deputy Ministers. They still, however, receive their authority through
elected ministers who are appointed by the Prime Minister with authority.
While traditionally senior public servants are seen as carrying out acts in
the name of the minister, they also have responsibilities under
administrative law. Deputy Ministers in Canada are, therefore, not
accountable to ministers in all matters; they may also receive their own
power and responsibility through the Canadian Financial Administration Act
and are directly accountable for them.
Ministers’ role in financial matters
Some Canadian researchers suggest that Canadian ministers take a more
hands on role in managing their ministries than in other comparable
democracies. In Sri Lanka, ministers do the same but covertly. They
interfere in financial decisions that according to the Financial Regulations
issued by the Treasury should be left to the officials and officials are
powerless to resist them for under a politicised system of appointments to
the public service they owe their appointments to the Minister or Prime
Minister and are beholden to them. So, if a Minister or Prime Minister
wants to decide matters which constitute financial irregularities it is not
only the official but also the minister who should be held accountable. We
must introduce such a provision by law to ensure good
governance. For this, a law is necessary. Otherwise the talk about good
governance is empty rhetoric. Haven’t there been allegations against
previous Presidents and Ministers? What happened to them? Were they
ever punished under the law for such irregularities? At most they were
found guilty by commissions of inquiry and deprived of their civic rights by
a Parliamentary Resolution. The commissions packed not with impartial
judges but men known to be partial, often accused of harbouring prejudice
and seeking political revenge. The Canadian Parliament in the 1970s
considered recommendations to transfer control and responsibility for
departmental budget matters from ministers to senior public servants as
prevails in Sri Lanka.
It was thought that this would take out the political element from financial

accountability and also make accountability more easily managed. The
arguments against this move were just that decisions must be political if
the voting public is to have any control over public management. It was
also considered that if the responsibility of holding a public servant
accountable was entrusted to a parliamentary committee such as the
Public Accounts Committee, as in our country, non-political enforcement of
the responsibility was unlikely.
Alternatively, the recommendations were not implemented. Minister
Wijedasa Rajapakshe knows about the detailed reports on financial
irregularities he submitted as the Chairman of COPE a few years ago. A
review of the principle of ministerial responsibility in a contemporary
context is, therefore, needed. Ministerial responsibility has become a great
deal more complex than it was when most parliamentary democracies
were established. Reconsideration of Ministerial responsibility is, therefore,
necessary for it cannot be left to conventions of the British Constitution
which is an unwritten Constitution.
Prime Minister Howard of Australia published a guide to ministerial
responsibility. Prime Minister Rudd, in 2008, revised chapter 5 of this
document, the Guide on Key Elements of Ministerial Responsibility (these
standards were re-released by the Gillard Government in 2010).
The new standards introduced obligations in dealing with lobbyists,
investment disclosures, a bar on some lobbying activity for a period of
time after serving as a minister and a ban on fundraising. It did not,
however, introduce any changes to the types of failures that Ministers
should be accountable for. Alternatively there may be a code of Conduct
for Ministers which may or may not be enacted as a law. The Code might
declare that:
• Ministers are answerable for all acts and omissions of persons and
organizations acting under prerogative, legislative or contractual authority
assigned to them. This means that ministers are personally responsible for
their own acts and omissions, and those of their staff and department
heads.
• Ignorance of a matter does not excuse the minister, and ministers should
have systems in place to ensure they are kept informed.

• Ministers must respond to questions about their responsibilities in
Parliament, and use freedom of information law in a way that does not
hinder appropriate public disclosure. This includes facilitating the
attendance of their personal or departmental staff at parliamentary
committees when requested.
The Code should ideally be enforced by, or subject to the review, of an
independent commissioner, such as a Parliamentary Ethics or Integrity
Commissioner. In addition to non-political enforcement of a code of
conduct, there are other elements of Ministerial responsibility for the
Parliament to consider. An effective Code of Conduct enacted into law is
better. It needs to set out clearly and transparently the responsibilities of
ministers. Such a set of principles serves to guide the activities of
ministers and provide a set of agreed benchmarks to which the public can
hold ministers. The principles should be set out in a public document and
then incorporated into legislation. This is what the World Bank document,
"The Public Finance Act 2002 did. Most of the matters laid down in the
Financial Regulations issued by the Treasury which are not considered as
binding on Ministers are included as law. This seems to be the way
forward.
Posted by Thavam