A-G: Improve coordination between ministries to stop wastage

Detailed information: Nik Azman holding copies of the 2019 A-G report during a press briefing in Putrajaya.

PUTRAJAYA: A lack of coordination between ministries cost the government millions, not only in money, but also in being forced to accept defective goods, said Auditor-General Datuk Nik Azman Nik Abdul Majid.

He said sterner action must be taken against mismanagement, misappropriation and poor internal audits in departments within ministries and government-owned companies.

He added that among various findings from last year’s audit, the Defence Ministry had sent defective armoured carriers to the country’s United Nations peacekeeping troops in Lebanon.

Nik Azman was speaking to the media at a briefing about the 2019 A-G Report on Adherence of Ministries and Federal Departments and the 2019 A-G report on the Management of Federal Government-Owned Companies yesterday.

He cited the nine armoured personnel carriers sent to Lebanon.

“Soldiers are supposed to be able to operate the weapons from inside the vehicle, but the defect forces soldiers to lean out of the carrier to do so,” he explained.

The Auditor-General noted that sometimes a ministry was not aware that the goods delivered were damaged or that they needed to impose late delivery penalties because there was no communication between the people who received the goods and the ones who made the payments.

He added that such information was also not relayed to other relevant units in the ministry.

Nik Azman emphasised that the lack of coordination was a big problem.

“Sometimes, the person who is in charge of the payment does not have the contract with them, so they do not know the specific terms of the agreement.

“There must be better coordination between the departments in ministries,” he reiterated.

Among the issues Nik Azman revealed was the failure of the Defence Ministry (Mindef) to charge liquidated damages of up to RM116.54mil on the manufacturer of the second generation littoral combat ship 1, which was delivered late by a total of 245 days.

He pointed out that Mindef did not charge a late penalty of RM15.04mil for late delivery of launchers, as well as the supply of defective armoured carriers.

“The reason given was that there was a clause for a grace period in the contract,” he said.

“As for the RM15.04mil late penalty not imposed over the late delivery of the new generation Lightweigher Multiple Launcher, Mindef has agreed to insist on penalising the supplier.”

On the matter of tax refunds, Nik Azman said the Inland Revenue Board (LHDN) stated that it would only refund taxpayers after they had been audited.

The LHDN has not refunded RM3.8bil to taxpayers who paid in 2017 and the years before.

“We suggested to LHDN to refund first, audit later,” he said.

As for the overpaid Goods and Services Tax of RM4.38mil, he recommended an investigation into the companies making the claims and the Customs Department officers in charge of the refunds.

Nik Azman also suggested that the Customs Department collect the RM50.46mil in import duty for alcohol of other than 99.5% purity level, which he said was disturbing because the exemption did not comply with the exemption approval.

On Federal Government-owned companies, he said there was much mismanagement, abuse of administrative powers and complete disregard for key performance indicators.

Nik Azman also pointed out that one of the companies, which runs three hotels in the country, was in need of a management overhaul.

He noted that the damaged facilities in the hotels were not fixed and there were no promotional campaigns.

He also noted that TalentCorp had been operating without a chief executive officer since June 2018 and that its Returning Expert Programme lacked efficiency.

The full report is available to the public on the A-G Department’s website.
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