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Cablegate: Tsunami Relief Corruption Charges by Auditor

This record is a partial extract of the original cable. The full text of the original cable is not available.

UNCLAS SECTION 01 OF 02 COLOMBO 001705

SIPDIS

SENSITIVE

SA/INS FOR M.GOWER, C.SIM; TREASURY FOR S.CHUN; MCC FOR
D.NASSIRY

E.O. 12958: N/A
TAGS: EAID ECON PGOV CE
SUBJECT: TSUNAMI RELIEF CORRUPTION CHARGES BY AUDITOR
GENERAL OVERSTATED

1. (SBU) Summary: On 7 September, Sri Lanka?s Auditor General
(AG) issued a report to the Parliament based on an audit of
work done by various Government of Sri Lanka (GSL) agencies,
as well as district and local government offices in response
to the December 26 Indian Ocean Tsunami. The AG?s report has
been widely reported in the press as concluding that the
process has been riddled with corruption. Post has reviewed
the news articles as well as the AG's report and believes that
it is largely accurate with regard to failures within the
system, but that it inappropriately identifies those failures
as corruption, when they should more accurately be termed
either inefficiencies or deficiencies. End Summary

2. (U) Sri Lanka?s Auditor General issued a report to
parliament on September 7 that was highly critical of the
Government?s tsunami relief efforts to date (the period
covered in the report was from December 26, 2004 to June 30,
2005). The scope of the report has several limitations;
most notably it does not review directly the work of NGOs or
other private sector organizations, which have been
considerable. It outlines weaknesses in the pre-tsunami
disaster preparedness and mitigation measures and offers
broad-brush complaints about rescue and immediate relief
efforts, gives an accounting of death and damages and
chastises the Government for failing to set up the National
Disaster Management Council (which the GSL has done in the
last six months).

3. (U) With regard to its review of the distribution of relief
efforts, the report finds:

--shortcomings in the clearance of goods from the sea port
and airport (Note: Post has worked with several
organizations to expedite clearance of tsunami relief
items, or to obtain waivers of various charges assessed by
the port. There were also clearance delays early in the
process due to a dispute over clearance procedures between
the Sri Lankan Navy and Sri Lankan Customs. End Note);
--weaknesses in the management of the receipt of aid material;
--poor fund management (while there are some examples of
monies sent to various districts, but not properly
accounted for, there are no direct accusations of
embezzlement or other misdeeds);
--failure to sign MOUs with NGOs and private sector
organizations;
--incorrect provision of relief rations;
--failure to make progress on home construction;
--incorrect distribution of relief payments;
--incorrect deployment of vehicles; and,
--contradictory/confusing Government decrees regarding
tsunami relief rules.

SIPDIS

4. (SBU) Where the report fails repeatedly is to identify the
source of many of these weaknesses and shortcomings. For
example, there are clear reasons why permanent housing has
not progressed further, most notably:
--the 100/200 meter coastal setback established by the GSL,
but only marginally enforced;
--the failure on the part of the GSL to identify and
allocate land outside this zone; and,
--the failure of the Government to provide NGO partners
with lists of beneficiaries.

None of these is an example of corruption, but rather
deficiencies in the system.

5. (U) The AG is appointed by the President from the
independent Government of Sri Lanka (GSL) Auditor General?s
service according to seniority. The AG is a
constitutionally-established position and reports to the
Parliament. Parliament requested the tsunami audit. A
group of 42 auditors from the AG department were assigned.
This is an interim report and when financial statements of
various GSL departments and ministries are released at the
end of the year, the AG?s office hopes to do a more
comprehensive assessment. The auditors visited 12 of the
13 tsunami affected districts and reportedly went from
house to house to inquire about relief distribution. An AG
department source said they did this work under severe
constraints, as the government did not provide funds for
the audit. The officers had to travel by bus and were
given a very small per diem.

6. (U) Neither did the AG audit the Central Bank account.
Usually all funds received by the GSL are deposited in the
?consolidated account? of the Government and are subject to
AG audits. In this case, funds were deposited in a special
account, created specifically for tsunami relief activities,
in the Central Bank, and not subject to the AG's jurisdiction.
In the next few weeks a few AG staff members will be helping
a UN audit team to audit UN tsunami accounts. On October 4,
the Public Accounts Committee of the Parliament will call
various government officials and examine the interim audit
report.

7. (SBU) Comment: Post has reviewed the various press
accounts of the report and finds them largely sensational.
While the report does articulate problems in the tsunami
relief and reconstruction process, its allegations of
corruption are loose and imprecise. We continue to pursue
changes to GSL strategy and policy related to the process,
particularly with regard to clearance of items into the
country, registration of NGOs and rules governing the
construction and placement of permanent housing. Recent
implementation of the UN-sponsored Donor Assistance Database
(DAD) through the Task Force for Rebuilding the Nation
(TAFREN) should have a beneficial affect and assist donors
and observers in keeping track of pledges, work and progress.
End Comment
LUNSTEAD

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