Govt discrepancies still prevalent despite ‘excellent’ scorecard

BY AZREEN HANI & ALIFAH ZAINUDDIN

Government shortfalls are still prevalent in most ministries despite the auditor-general’s (AG) dictum of an excellent yearly performance in2016.

Discrepancies remained rife across a majority of the government’s 25 ministries with accounts of excessive spending, project delays and mismanagement published in the AG Report 2016. Below are excerpts from the report, highlighting discrepancies in several ministries:

Prime minister’s Department: The department saw the issuance of 5,679 notices of demand to borrowers under the National Entrepreneur Group Economic Fund (Tekun), Perhebat and Bank Kerjasama Rakyat (M) Bhd due to loan repayment botches. Between 2014 and 2016, the percentage of loan repayment decreased from 40.1% to 20.7%.

The AG’s report on seven subsidiary companies of the Ministry and the Statutory Bodies also found that Tekun accumulated losses amounting to RM209.28 million as of 2015.

The performance of repayment compared to target was only between 78.1% and 96.9%. Non-performing finance stood at 38% (RM769.34 million), from the total repayment arrears of RM2.02 billion.

Total bad debts that were written off were RM410.61 million (9.6%) from the total financing and collected repayments were RM74.63 million (18.2%).

Ministry of agriculture and agro-based Industry: The East Coast Economic Regional Development Council’s Entry Point Project involving herbal parks in Dungun, Terengganu, saw 25 units in Herbal Park Pasir Raja worth RM3.84 million unoccupied since delivery date.

The non-operation of a laboratory at the Institute of Medical Research has resulted in unused laboratory equipment worth RM1.14 million.

Ministry of Works/Public Works Department: The six-year delay in Rawang Bypass project has caused the cost to increase to RM628.14 million instead of the initial RM203.47 million.

According to the report, the contractor was appointed through direct negotiation and obtained RM203.47 million worth of contacts.

The project was implemented from July 16, 2005, with the original completion date set for Jan 12, 2008.

The extension of time (EOT) of 2,132 days was approved, which led to the contractor claiming losses and expenses amounting to RM7.88 million as well as design changes, which gradually cost RM34.2 million, were among reasons for the increased cost.

Following the latest EOT, the project was scheduled for completion on March 16 this year, but until Feb 15, only 97.15% was completed.

Ministry of rural and regional Development: The audit report revealed that 19 out of 84 Sustainable Village Projects worth RM5.32 million were a failure or abandoned. Improper payment involving the agreement and project implemented without approval amounted to RM1.13 million.

Federal government statutory body — IrDa: PRISMA Harta Sdn Bhd, a wholly owned Iskandar Regional Development Authority (IRDA) company, which manages the Rumah Iskandar Malaysia project in Bandar Nusajaya, failed to meet rental targets for houses and commercial units in Johor’s development.

Between 2013 until 2015, only 70.5% to 80.5% of residential units were leased, while only 61.5% to 84.6% were leased for commercial or business units.

As of March 15, 2016, 1,077 homes and eight commercial units were rented out. Arrears in rental of residential and business units for three months were RM762,580 (64.1%) compared to the amount of rental arrears of RM1.19 million.

Ministry of Domestic trade, Cooperatives and Consumerism: Irregularities were found in the control price consolidation programme in Sarawak as payments made to transporters did not comply with the terms set out in the agreement. Additional agreements on changes to quotas and required goods also resulted in improper payments of RM150,866.

Controlled items sold via point-of-sale terminals were sold at a higher price compared to prices that have been set by the government with a surplus of between six sen and RM9.40.

Ministry of Health: The appointed contractor for the construction of Bera Hospital in Pahang was unable to exe- cute the project even after a 690-day (23 months) extension period given.

The weakness of the consultant to coordinate and finalise the construction drawings between all quarters caused many changes and contradictions in the construction drawings.

Ministry of Energy, Green technology and Water: Sabah Electricity Sdn Bhd’s (SESB) procurement of six contracts worth RM73.49 million for the electricity transmission line construction project in Sabah, was not in line with the instructions from the Economic Planning Unit.

It added that the contracts should have been given out through open tender. Flaws in design and slope monitoring work had also caused SESB to incur an additional cost of RM21.83 million.

Ministry of Home affairs: The report noted differences in the number of evictions shown between data in the myIMMS system and the Immigration Department headquarters enforcement division of up to 155,318. Additionally, it found that there were no changes to the status of illegal immigrants who had been evicted.

Payment for the acquisition of a medium-sized AW139 helicopter by the Royal Malaysian Police for €33.35 million (RM168.81 million) is said to be higher than the €32.47 million price tag stipulated in the contract.

Ministry of Higher Education: A total of 5,527 MyBrain15 applications were not correctly approved due to inconsistencies in the paperwork. The documents were not sealed by the signature of the secretary general who acted as chairman of theMyBrain15 Programme Scholarship Committee.

Disbursement for the subsidy took over eight months before the payment information was updated into the recipient student’s ledger. The system also failed to update the students’ ledger on transaction fees and life assistance payouts. Overall, the management of indemnity claims and repayment claims under MyBrain15 was unsatisfactory.