PETALING JAYA: The Auditor-General’s Report (AG’s Report) 1/2026 revealed several significant weaknesses in the management and expenditure of the MyDigital ID development project under Mimos Berhad.
The report said the audit, which covered the period from July 2023 to March last year, examined RM28.13mil spent from the initial RM80mil allocation for the project.
Mimos transferred the first disbursement of RM80mil received from the Home Ministry to My Digital ID Sdn Bhd (MyDIDSB) on Feb 20, 2024, after the company was established.
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MyDIDSB is a special-purpose vehicle (SPV) company Mimos set up on Jan 15, 2024, to implement the project.
The report found that much of the spending occurred without approval from the designated project committees.
From a financial perspective, the report found that the designated committee did not approve RM28.13mil in spending.
This includes 11 project sub-scopes where expenditures were made without or exceeding allocated funds totalling RM4.08mil.
This indicates weaknesses in internal controls and non-compliance with established governance and mandated procedures, the report noted.
One sub-project exceeded its budget by RM70,000.
The audit also found procurement lapses; equipment for the project’s Certificate Authority (CA), including security cages and door access systems, was purchased without Value Study Lab approval and remained unused.
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"The audit review found that Mimos procured two units of door access systems and security cages (CA equipment) on Feb 23 and 29, 2024, totaling RM79,000 under sub-scope F2: Data Centre Services for CA development.
"The Value Management Study conducted from July 22 to 24, 2024, concluded that the CA development was not approved and recommended its removal from the project scope because Mimos was not the implementing agency.
"The CA development scope included servers, cages, and safes.
"Further review showed that Mimos procured the CA equipment four days after a meeting decided to proceed with the Value Management Study. The study subsequently recommended that CA development be excluded from the project scope.
"Physical inspection by Audit on Aug 5 last year found that the equipment remained unused and stored at the Mimos Data Centre," said the report.
In response, Mimos acknowledged that the assets in question belong to MyDIDSB.
"Based on current inspections, these assets are in good condition and fully operational.
"According to the Mimos Group procurement guidelines and the Finance Ministry guidelines, all group procurements must follow prevailing procurement procedures.
"The Procurement Department manages the Mimos Group procurement function on behalf of MyDIDSB.
"All procurement decisions related to MyDIDSB projects are fully handled by the company's management," it said.
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In addition, the report said, RM14.09mil meant for development was used to cover staff costs, emoluments, medical benefits and office equipment, in breach of the Guidelines for the Implementation of 12th Malaysia Plan (12MP) Projects.
These operational expenses include resource costs, emoluments, staff medical benefits and office equipment.
In response, the Science, Technology and Innovation Ministry (Mosti) acknowledged and accepted that development allocations cannot be used to cover operational expenses, as stipulated in the Development Project Implementation Guidelines under the 12MP.
"Mosti will ensure that Mimos does not use development allocations to cover operational costs in the future," it said.
The audit further stated that development allocations are not permitted to be used for operational expenses, including emoluments, as set out in the Development Project Implementation Guidelines under the 12MP.
"In addition, Mimos representatives must fulfil their fiduciary duties to ensure compliance with the prescribed conditions," the report stated.
To address these weaknesses and prevent recurrence, the report said Mimos should ensure all project expenditures are approved by the relevant committee; follow the approved cost structure and allocation purpose; and comply with the 12MP Development Project Guidelines to avoid unauthorised use of development funds.
