Govt's Covid-19 expenditure amounted to over RM38bil last year, says Auditor-General

KUALA LUMPUR (Bernama): The Federal Government’s Covid-19 expenditure amounted to RM38.019bil in 2020, says the Auditor-General.

Datuk Nik Azman Nik Abdul Majid also said federal government revenue had declined 14.9% to RM225.075bil in 2020 from RM264.415bil the previous year.

Operating expenditure declined 14.7% to RM224.6bil, a decrease of RM38.743bil compared to 2019 while development expenditure amounted to RM51.36bil, a decrease of RM2.813bil or 5.2% compared to RM54.173bil in 2019.

He added that overall, the Federal Government had a deficit of RM87.645bil with a deficit to GDP ratio of 6.2%, compared to 3.4% or RM51.37bil in 2019.

The Auditor-General also said non-compliance by federal ministries and departments with financial management has led to issues involving irregular payments, loss of public funds and wastage amounting to RM620.07mil in 2020.

He said of the RM510.49mil in irregular payments, RM499.19mil involved payments for maintenance service claims without being verified at the National Security Council (MKN) level.

Meanwhile, of the RM104.79mil loss in public funds, RM81.69mil involved unclaimed penalties not imposed by the Immigration Department while RM4.79mil involved equipment that was received late and not installed at Istana Budaya.

"To enable corrective action and improvements to be taken, the Auditor-General has submitted 29 recommendations, namely four recommendations for verification of financial statements and 25 recommendations for compliance audits of federal ministries and departments to be considered for implementation by ministries and departments," he said.

He said this in a statement to Bernama after the Auditor-General’s Report on the federal government's financial statements and the 2020 Federal Ministries and Departments Compliance Audit was tabled in the Dewan Rakyat Thursday (Oct 28).

Nik Azman said compliance audits involving a total of RM899.44mil had been carried out on three ministries and five federal departments, covering aspects of contract management amounting to RM772.40mil, government procurement (RM54.8mil) and revenue collection (RM72.24mil).

Meanwhile, in the Emphasis of Matter on the Federal Government's Financial Statements, the Auditor-General stated that the federal government's debt in 2020 amounted to RM879.560bil or 62.1% of Gross Domestic Product (GDP).

Federal debt increased by RM86.562bil or 10.9% compared to RM792.998bil or 52.4% in 2019.

According to the Auditor-General, 50.4% or RM98.058bil of the RM194.555bil in new loans in 2020 was used to finance the principal repayment of matured loans.

"This shows that the government is dependent on new loans to repay mature loans and the use of Development Fund funds amounting to RM8.265bil for the repayment of Private Financing Initiative Liabilities and Guarantee Commitments," he said.

Besides this, a total of RM2.65bil was used to pay for the Health Ministry’s hospital and clinic support as well as maintenance of facilities in the Education Ministry, which was previously paid using operating expenditure allocations.

"Development Fund funds financed through loans should in fact be used to finance physical development projects that contribute to the creation of new capital that can enhance the country’s development and have a high multiplier effect to generate economic activity," Nik Azman said.

According to the statement, the Auditor-General's report contains three main components, namely the verification of the Federal Government's financial statements for the year ended Dec 31, 2020, the Federal Government's financial analysis and the compliance audit of Federal ministries and departments.

Nik Azman said overall, the Federal Government's financial statements showed a true and fair view of the government's financial position for the year ended Dec 31, 2020 and its accounting records were orderly and up to date.

It is the second tabling of the report in the Dewan Rakyat this year after the Auditor-General's Report 2019 Series 2 was tabled on Sept 28.

Also on Thursday, the National Audit Department briefed members of the Public Accounts Committee in Parliament on the main issues of the audit findings.

The Auditor-General's report can be accessed by the public via http://www.audit.gov.my from 10.10am Thursday while issues in the report’s Compliance Audit of Ministries and Federal Departments 2020 will be uploaded on the Auditor-General's Dashboard Portal (AGD) from 11am Thursday. - Bernama