• Rs. 538.79 m spent on unapproved progs. outside official plan
• Rs. 259.83 m paid before Cabinet approval
• Rs. 14.57 m spent despite Election Commission ban
• Rs. 49.23 m paid 24 hours before polls to handpicked suppliers

A latest audit report issued by the National Audit Office (NAO) has uncovered serious financial irregularities, election law violations, and misuse of public funds in the implementation of the Smart Youth Exhibitions, musical shows, and the ‘Sihinaya’ programme of 2024, organised by the National Youth Services Council (NYSC).

According to the report, millions of rupees have been hastily spent on exhibitions, musical shows, and unapproved programmes – including controversial last-minute transactions in the days immediately preceding the 2024 Presidential Election, despite clear directives from the Election Commission.

While the Cabinet had formally approved the programme on 15 July 2024, the audit has revealed that three exhibitions and five musical concerts had already been held before Cabinet approval had been communicated to the NYSC, raising grave concerns over procedural transparency and financial accountability.

In an alleged violation, the NYSC had gone ahead with a musical concert from 16-18 August 2024 under the Sports Fiesta programme, ignoring a written directive from the Election Commissioner dated 30 July 2024 to postpone the event until after the Presidential Election. The event had cost taxpayers Rs. 14.57 million, it is revealed.

The audit report has also highlighted a surge of financial activity just before election day.

On 20 September 2024, a mere 24 hours before polls opened, the NYSC had paid Rs. 37.86 million to three suppliers handpicked by the Director General. A further Rs. 11.37 million had been disbursed to two newly registered suppliers the same day; their registrations had been expedited on the Director General’s instructions. Finance officers have since confirmed in writing that they were pressured by top officials to authorise these payments, according to the report.

Another troubling finding involves Sri Lanka Youth Services Ltd., a subsidiary of the NYSC, which had allegedly prepared falsified invoices and overbilled the council by Rs. 7.33 million for services, including fireworks, banners, and security, for the concerts.

The audit has noted that procurement procedures had been frequently bypassed, with supplier lists and specifications handled directly by the Director General’s office, excluding the council’s procurement division. Suppliers had been registered without proper documentation or deposits, in breach of procurement regulations.

The report has further exposed that Rs. 323.39 million spent on the programme, supposedly to be reimbursed by the Presidential Secretariat as per Cabinet approval, had not been recovered as of 31 December 2024, leaving the council to reallocate funds meant for other youth development projects.

Despite Rs. 12 million being allocated to record and archive 10 of the concerts, the council had failed to produce video records for audit scrutiny.

This alleged financial mismanagement had occurred despite the Government’s strict instructions for fiscal discipline under National Budget Circular 2024/01 issued on 10 January 2024, which mandated stringent control of public expenditure due to the country’s ongoing economic crisis.

In addition, the audit report has further revealed that a total of Rs. 538.79 million had been spent on these programmes – including Smart Youth Exhibitions, musical shows, and youth festivals – none of which were part of the council’s official Annual Action Plan or aligned with its core mandate.

Despite an allocation of Rs. 493.25 million approved by the Presidential Secretariat for these programmes, the council had received only Rs. 74.20 million by the time of the audit, resulting in Rs. 464.59 million being spent by drawing from the council’s annual capital allocation, compromising funds meant for other priority youth development initiatives.

Of the total expenditure, Rs. 323.39 million – over 60% – had been spent on organising just three Smart Youth Exhibitions with musical shows and 11 standalone musical events. Notably, Rs. 259.83 million of this had been spent even before receiving Cabinet approval, in direct violation of financial management protocols.

Furthermore, despite a formal notification from the Election Commission instructing the council to postpone such events until after the Presidential Election, several programmes had gone ahead, disregarding election regulations and resulting in an additional expenditure of Rs. 14.57 million.

The audit has also uncovered serious procurement irregularities, with the procurement of goods and services carried out without adhering to Government procurement guidelines. Materials such as T-shirts, stage structures, banners, and other services had been procured from suppliers nominated by the Director General – some of whom were unregistered, including a building materials supplier – and often through subcontracting via Sri Lanka Youth Services. 

This practice had resulted in the council forgoing potential cost savings, as the subsidiary had added a 10% profit margin on supplies. Additionally, payments had been made for undelivered goods and services, duplicate invoices, and unaccomplished work.

Attempts to contact Youth Affairs Deputy Minister Eranga Gunasekera and NYSC Chairman Supun Wijerathna were futile.