Audit report: RM1.29bil irregular payments due to non-compliance with financial management

KUALA LUMPUR: Non-compliance with financial management has resulted in issues of irregular payments amounting to RM1.299bil, loss of public funds of RM11.45mil and a waste of RM8.87mil to the government in 2020.

Auditor-General Datuk Seri Nik Azman Nik Abdul Majid said that last year, the National Audit Department (NAD) had conducted compliance audits on five federal agencies and submitted 19 recommendations for consideration for implementation.

"As of Dec 31, 2021, a total of 140 financial statements have been audited and awarded the Auditor General's Certificate while seven financial statements are in the process of being audited.

"A total of 109 financial statements were awarded Clean Audit Certificate, 14 were awarded the Audit Certificate Based on Emphasis of Matter, 17 were given Audit Certificate With Reprimand,” he said in a statement on the Auditor-General’s Audit Report (LKAN) here on Tuesday (March 22).

The report was tabled at the Dewan Rakyat today involving LKAN 2020 Series 1 on activities of ministries, federal departments and statutory bodies, financial statements and compliance audit on federal agencies for the year 2020.

Apart from that, the report also involved the management of the Federal Government-owned companies and 13 state-level LKAN 2020 Series 1 involving activities of ministry, agencies and management of state-owned companies.

Nik Azman said performance audits on government activities were conducted in accordance with Section 6(d) of the Audit Act 1957 and international auditing standards issued by the International Organization of Supreme Audit Institutions (Intosai).

He said the performance audit was conducted to assess the achievement of the objectives of government activities, projects and programmes, as well as whether its implementation was done prudently, efficiently and effectively.

"It also aims to assess the extent to which public money is spent prudently, efficiently and effectively without waste and get the best value for money,” he said.

Meanwhile, a total of 10 performance audits worth RM39.719bil were conducted in eight departments, three government-owned companies and four federal statutory bodies and agencies under seven ministries.

Nik Azman said of the total, six audits involved categories of programmes and activities, three categories of projects and one involved ICT systems.

"Overall, the implementation of federal government’s activities, projects and programmes were carried out in accordance with the set objectives.

"However, there are still weaknesses such as output targets and the achievement of set results cannot be achieved or cannot be evaluated. This is because quantitative targets, mechanisms and indicators were not set, and relevant data is not well maintained and updated,” he said.

Nik Azman said a total of 33 recommendations were given for consideration by the audited ministries, departments and agencies.

The NAD has also carried out performance audits on 18 programmes, activities and projects involving two ministries in Sabah dan Sarawak, 15 departments and 12 state government agencies, as well as the audit on the management of 11 state-owned companies.

A total of 111 recommendations were given, 70 of which were given for consideration by the state ministries, departments and agencies, and 41 were for the relevant state government-owned companies, he said.

Nik Azman said LKAN on Management of Federal Government Companies 2020 Series 1 contained the findings of audits done on six Federal Government companies.

"Overall, four companies have achieved the objectives of establishment; two companies demonstrated a high level of good corporate governance practices; and three companies have a stable financial position,” he said.

He said a total of 31 recommendations had been given to the management of the companies for improvements.

The LKAN on the activities of ministries, federal government departments and federal statutory bodies, as well as on financial statements and Auditing of Federal Agency Compliance, as well as LKAN 2020 Series 1 on the management of federal government companies will be uploaded on the NAD's website, http://www.audit.gov.my, after the tabling at the Dewan Rakyat.

At the state level, it will be uploaded to the NAD’s website after it is tabled at their respective State Assembly sittings.

Issues on the LKAN 2020 Series 1 will also be uploaded to Auditor General’s Dashboard (AGD) portal from 10.30am and further enquiries or feedback can be emailed to [e-mail]. - Bernama