SLMC Council members call for explanations from Legal and Finance Units following report on financial irregularities
A damning independent audit report on financial irregularities in the Legal Unit of the Sri Lanka Medical Council (SLMC) from 2018-2022 has been tabled and minuted at the monthly meeting of this statutory body on Thursday (February 22).
In the light of this report, both the SLMC’s Legal and Finance Units have been instructed by the Council members to submit their explanations at the next SLMC monthly meeting in March.
A total of Rs. 43,298,325 (close to Rs. 43.3 million) had been disbursed as ‘Legal Fees’ during this four-year period, the audit report based on information provided by the SLMC has stated.
The breakdown of payments, according to the report in the possession of the Sunday Times reveals that Rs. 36,878,325 (Rs. 36.9m) had been paid to ‘external lawyers’ while the SLMC’s Legal Officer had been paid Rs. 6,400,000 (Rs. 6.4m) totalling Rs. 43.3m.
Pointing out that the payments have been made “without having any formal agreements with the selected lawyers”, the report notes: “Compared with the payments made to the external lawyers, the payments made to the Legal Officer as a percentage was about 17.5 per cent. While paying permanent salary, payment of additional fee amounting to Rs. 6.4m without having approval of the Council is a problematic policy that (sic) applied by the SLMC.”
The ‘Report on the Investigation (sic) the Payment of the Legal Fees from the Years 2018 to 2022 and Evaluation of Functions of the Finance Division of the Sri Lanka Medical Council’ had been submitted by the Additional Auditor General (Retired) P.L.K. Perera on January 19, 2024.
His report further states: The fees paid for external Lawyers had been made based on invoices furnished by them obtaining the approval of the Management Committee, without following generally accepted government payment procedure in the Financial Regulations (FRs) 136, 137 and 138.
“…..According to the report furnished by the Legal Officer to the Vice President of the SLMC, the total legal fees paid to the external Lawyers for the period 2018 to 2022 amounted to Rs. 36,878,325. However, according to the legal payment vouchers furnished by the Finance Unit relating to the above period, the total legal fees paid to the external Lawyers mounted to Rs. 34,007,450. Thus a difference of Rs. 2,870,875 was observed between those two records. Nevertheless, no evidence was made available to reconcile the difference either in the legal division or in the finance division. Hence it was observed that the legal payments have been made without examine (sic) the accuracy in the source documents.”
The report also raises an issue over the payment of Rs. 10,436,952 (Rs. 10.4m) to another lawyer, in addition to the payment for the Legal Officer, to appear as the junior Legal Counsel for 20 cases and for handling of 31 cases as the legal Counsel.
Compared to a total of 75 cases during the four-year period, this lawyer has appeared for 51 cases without having proper agreement or appointment letter, it adds.
The audit report gives five conclusions including lawyer selection being carried out without a selection procedure; payments to lawyers being made without properly examining the source documents and payment vouchers; and that the SLMC being a statutory body it can obtain legal services from the Attorney General’s Department.
The Sunday Times understands that the Council after reviewing the report decided to seek an explanation from both the Legal and Finance Units to be made available at the next council meeting at the end of March.
A year ago (March 2023) with serious concerns being raised by some Council members with regard to legal expenses incurred by the SLMC and their insistence that an internal Audit Committee be tasked with conducting a preliminary fact-finding inquiry, such a committee had been appointed. When this internal Audit Committee submitted its report to the Council in May 2023, a decision had followed to appoint an independent auditor to investigate these legal expenses, with an appointment letter being issued to Additional Auditor General (Retired) P.L.K. Perera in August 2023.
4HIS WAS THE !UDIT 2EPORT tabled at the 656th Council meeting with SLMC President and a majority of members of the 29-member Council being present physically and others joining on zoom on February 22. The SLMC Registrar had also been present.
The Sunday Times in a report headlined ‘AG says SLMC must use his dept’s legal services’ on August 6, last year, stated that the Attorney General has ruled that the SLMC is a statutory body and as such is required to obtain the services of his department unless otherwise advised by him to retain private lawyers.
Our report also stated: A preliminary inquiry by the SLMC’s Internal Audit Committee with regard to legal expenses for four years (2018-2022) found instances where normal procedures had not been followed and also “high” payments made. Thereafter, the Council had urged an inquiry by an independent auditor.