• 16 properties saw a value rise of over 50%

The National Audit Office (NAO), in its latest audit report on the Government Valuation Department, has revealed critical findings concerning the issuance of valuation reports for damage caused to properties owned by Members of Parliament (MPs) during the violent incidents that occurred in the country on 9 May 2022.

According to a special investigation conducted by the NAO, it was revealed that after submitting the initial valuation reports, the Chief Valuer had increased the valuation amounts within a range of 22–158%. 

These adjustments had been made taking into consideration Cabinet decisions, presidential directives, and requests made by district and divisional secretaries, as well as requests from the property owners themselves.

In particular, in respect of 16 property valuations, it was observed that the total valuation amount had increased by 51%, rising from Rs. 384,081,900 to Rs. 580,153,100 in the subsequent valuation reports compared to the original reports.

According to comments provided by the Accounting Officer, the valuations had initially been reported using 9 May 2022 as the base date, based on requests from district secretaries, courts, and the Police to assess and report property damage related to violent incidents.

Furthermore, in accordance with Cabinet Memorandum No. PS/NC/ACD/98/2023 and the presidential directive dated 24 February 2023, the Chief Valuer had been instructed to carry out a revaluation in line with the current market value and to submit the revised reports within one month. 

Accordingly, the initial valuations had been revised by considering the matters stated in the appeals submitted by the respective parties, as well as fluctuations in the cost of building materials as of February 2024.

The revised valuations reported percentage increases that varied depending on the nature of the respective properties, the materials used for construction, and the cost incurred for replacing installed fittings and equipment.

The NAO has recommended that action should be taken to identify unusual variations in valuations and that appropriate institutional measures should be established to prevent recurrence of such irregularities.

The audit also highlighted severe concerns regarding the arrears of revenue. Out of the arrears of Rs. 896,496,121 existing at the beginning of the year under review, only Rs. 149,765,247, or merely 16.7%, had been recovered during the year under review. 

Further, according to information submitted to the audit, 90.47% of the total arrears of Rs. 748,730,874 at the end of the year under review, amounting to Rs. 677,342,621, is attributable to just 10 institutions. 

Of this, 66.48% is owed by the Urban Development Authority (UDA), S.W.R.D Bandaranaike National Memorial Foundation, and Ministry of Urban Development and Housing.

Despite this, the department had failed to introduce and implement an appropriate and efficient mechanism to recover the arrears of revenue by reaching formal agreements with the relevant institutions up to 31 May 2025.

The audit revealed that this situation had arisen due to several factors, including excessively high fees charged for valuation activities, the disposal of properties during the period between the valuation request and the completion of the valuation, and changes in the requirements of the relevant institutions. It was also observed that the absence of formal agreements had prevented legal action from being taken.

In response, the Ministry of Finance had introduced a revised valuation procedure with formal mechanisms and a lower fee structure, effective from 1 June 2023. However, since most of the valuation files had been very old, the relevant institutions had not taken action to obtain these valuation reports by making the necessary payments. Consequently, action is now being taken to write off these old balances in accordance with instructions issued by the Ministry of Finance.

When The Sunday Morning contacted former Government Chief Valuer P.D.D.S. Muthukumarana, who held the post during the related period, she said that she was no longer with the department and was unaware of the audit findings. Attempts made to contact incumbent Government Chief Valuer A.S.W.K. Nanayakkara were futile.