The most salient point raised by the recent Auditor-General’s Report 2022 was the exorbitant wastage running to over RM122 billion which was seen as recurring annually.
How then will Malaysia be poised to emerge as a dynamic and resilient player in the global economic arena if mismanagement and corruption work hand in hand? Are civil service officers being reprimanded or fired for losses and wastage in their organisations? NO! As a result, the losses keep repeating.
In presenting the report Federal Agencies, Auditor-General of Malaysia Datuk Wan Suraya Wan Mohd Radzi, highlighted five federal agencies recorded deficits amounting to RM3.115bil.
The five are the Federal Land Development Authority (Felda), the Electric Industry Fund Group (KWIE), the Railway Asset Corporation (RAC), the National Trust Fund Group (KWAN), and the Kuala Lumpur City Hall (DBKL).
The report found that Felda’s expenditure in 2022 amounted to RM1.947bil.“The expenditure within Felda exceeded the income of RM0.942bil due to an increase in the impairment of value by RM0.742bil, resulting in a profit loss of RM1.005bil,” it said.
“This situation is partly caused by the impairment of investment value by RM0.380 billion, amounts owed by subsidiary companies totalling RM0.193bil, and settler debts amounting to RM0.147bil,” the report added.
It said that KWIE’s expenditure was RM1.015bil in 2022, exceeding its income of RM0.025 bil and this has produced a deficit of RM0.990bil in KWIE.
“This is because KWIE does not receive any revenue from the excess electricity tariff rebates or charges due to increased fuel costs.
Additionally, KWIE’s funds are used to cover rebate expenses as a mitigation plan to minimize the impact of electricity tariffs on consumers,” it said.
Meanwhile, the RAC’s expenditure in 2022 was RM0.641bil, surpassing its income of RM0.157bil, resulting in RM0.484 bil of losses.
This is due to a decrease in the sale of used goods by RM0.162bil in 2022.
As Malaysia spearheads its economic recovery, it’s disheartening to see such leakages exposed.
“The nation can pave the way to a more robust and technologically advanced future by only curbing the wastage by mismanagement by the civil service. In contrast, embracing innovation, promoting collaboration, and prioritising economic development is the only way to gain economic momentum.
“Malaysia’s economic outlook is optimistic, provided the civil service and other government agencies play a significant role in driving innovation, competitiveness, and economic growth.
“The latest Auditor-General’s Report reports losses by government agencies annually, which is waste of taxpayer money,” said a concerned Malaysian and experienced banker.
Gopala Krishnan,(Pic, Above) who spent 40 years in the Banking industry and retired as Deputy Chief Executive Officer of a leading bank’s Treasury and Investment Banking, expressed his concern about the report, which revealed that ten federal agencies have loan balances of RM 122 billion for 2022.
The Auditor-General had said her office introduced a dashboard for the public to see who is doing poorly and why. This is also to ensure that audited federal agencies can take appropriate action to improve their financial statement preparation in the future.
She is proactive and has developed the Auditor-General’s Dashboard (AGD) online platform starting this year. (https://agdashboard.audit.gov.my/)
Through AGD, all types of Auditor-General’s certificates on Federal Agencies’ Financial Statements will be displayed.
“The display via AGD demonstrates the importance of good governance through principles of transparency, accountability, efficiency, and effectiveness in addressing audit findings,” she said through the Auditor-General’s Report on Federal Agencies’ Financial Statements for the Year 2022 presented in the Dewan Rakyat on Wednesday (March 6).
The objective of the AGD is to ensure that agencies’ audit units take immediate action on the issues raised in the Auditor General’s Report (LKAN), thus resolving outstanding issues. It also aims to inform the public online about LKAN issues concisely and accurately and promote transparency.
It is also a pressure trigger to speed up the resolution of issues raised in LKAN. To further improve public perception of the Auditor General’s report.
Wan Suraya said that as of Jan 11, 140 out of 144 Federal Agencies’ Financial Statements for 2022 had been submitted for the Auditor-General’s verification, with 130 statements being audited and certified.
It was reported that 116 Federal Agencies’ Financial Statements for 2022 have been issued Auditor-General’s certificates without reprimand. While 14 Federal Agencies’ Financial Statements have been issued Auditor-General’s certificates with Modified Opinions, comprising 13 Adverse Opinions and one Disclaimer of Opinion.
She said financial statement analysis has been used to assess the financial performance of federal agencies based on five aspects: Current Excesses and Deficiencies, Assets and Liabilities, Federal Government Grants, Loans, and Investments in Subsidiary Companies.
For the first time, Wan Suraya said this year’s report also included an analysis of subsidiary companies experiencing losses for three years starting from 2020.
“The introduction of Key Audit Area Reporting in 2023 for auditing Federal Agencies’ Financial Statements for 2022 emphasises material and significant matters affecting federal agencies’ financial position and performance.
“The Key Audit Areas for the 2022 financial statements are related to issues of going concern, valuation of investments, and dividend payments to contributors. This is in line with strengthening governance in the federal agency administration management system, including addressing issues of inefficiency, wastage, and extravagance,” she said.
The article was written by journalist, media coach, adjunct professor and author M. Krishnamoorthy.
