Another annual admonition

The armoury of the law is adequate for the task only if we employ the weapons available.

THE Auditor-General’s 2012 Report is conscientious, commendable and courageous. It contains the usual number of shocking findings of extravagance, financial negligence, corruption and dereliction of duty.

It is no consolation that politicians and bureaucrats around the world, including Europe and the United States, resort to similar malfeasance and breach of trust. The difference is that if they are caught, they are punished.

We, on the other hand, tend to be forgiving. Panels and committees are routinely appointed to investigate the Auditor-General’s annual admonitions. However, penal and administrative measures to punish the wrongdoers and remedy the wrongs are rare.

Plethora of laws: This is not because the law is lacking. The legal system contains enough institutions, laws and procedures to enforce financial prudence and to punish corruption and waste. The problem is poor enforcement of the rules. The laws are as good as the people who administer them. In relation to financial prudence, the following constitutional and legal institutions already exist in our legal system:

> The Federal Constitution establishes the office of the Auditor-General under Article 105.

> In addition to this constitutional Article, there are provisions on financial accountability in the Audit Act 1957 and the Local Government Act 1976.

> The Dewan Rakyat has a Public Accounts Committee on which the Auditor-General sits as an ex-officio member.

> The Statutory Bodies (Discipline & Surcharge) Act 2000 [Act 605] permits imposition of a “surcharge” on financially irresponsible employees of statutory bodies. A similar law exists for government servants.

> Act 605 permits errant public servants to be subjected to disciplinary proceedings, to be retired compulsorily, or be terminated in the public interest. Similar provisions apply to public servants.

> The Anti-Corruption Act 1997 arms the anti-corruption agency with extensive powers to investigate any corrupt practice or abuse of power.

> The Whistleblowers Protection Act 2010 gives some anonymity and protection to those who alert their superiors on wrongdoing in public office.

> The Penal Code has many provisions that can be employed against corrupt public servants. Among them are: theft by servants (s. 381); misappropriation (s. 403); criminal breach of trust (s. 405); cheating (s. 415); abetment (s. 107); and criminal conspiracy (s. 120A).

Clearly the armoury of the law is adequate for the task but only if we have the will power to employ the weapons available.

Surcharge: Similar to the “General Orders” for public servants, the Statutory Bodies (Discipline & Surcharge) Act 2000 is aimed at enforcing financial responsibility, honesty and efficiency in statutory bodies. Another aim of the law is to compensate the statutory body for losses suffered as a result of an officer’s negligence, dereliction of duty, dishonesty, carelessness or inefficiency.

Not only employees but ex-employees may be liable. A person who has retired, resigned or been terminated or dismissed may be surcharged in the same manner as a serving officer. A surcharge is a civil debt and can be recovered by deduction from the salary or from the pension or through a civil suit in a court of law.

Under Section 14, a variety of acts of commission and omission can trigger proceedings for surcharge:

> If there is failure to collect any monies;

> Improper payment of monies;

> If claims are approved or project payments are authorised without proper scrutiny or for corrupt motives;

> Payment of money not duly approved;

> Causing any deficiency in or destruction of any money, stores or property, and;

> Failing to keep proper accounts.

Discipline: An order of surcharge is no bar to disciplinary proceedings. An officer can be dismissed or reduced in rank if he used his position to his personal advantage, acted dishonestly, irresponsibly or negligently.

Auditor-General: By providing Parliament’s Public Account’s Committee (PAC) with objective and independent information on how far the Government has complied with authority to raise and spend money, the Auditor-General assists invaluably to enable Parliament to enforce executive accountability.

Unfortunately, the Auditor-General has jurisdictional limitations. He does not scrutinise those public enterprises like Petronas that are exempted by the Yang di-Pertuan Agong. He has no power to prosecute or surcharge or fine any one. His good work goes only as far as the Government or the Dewan Rakyat’s PAC takes it.

PAC: The PAC is the parliamentary institution for an inquisition into government spending. It scrutinises the Auditor-General’s reports and summons persons and papers. Its job is to alert Parliament if money was not spent in accordance with the allocations given or was wasted.

Critics point to many flaws in its working. Like the Auditor-General, it has no power to prosecute or punish anyone. It depends entirely on follow-up action by the political executive. Ministers and top civil servants do not always subordinate themselves to its work.

MACC: The Malaysian Anti-Corruption Commission should act vigorously to investigate the findings of the Auditor-General and the PAC.

In addition, our country needs a Freedom of Information Act to ensure more openness in government spending. Only then will the message be driven home that public office is a public trust. Everyone handling public money has fiduciary duties. If internal morality fails, the law must step in.

Shad Saleem Faruqi is Emeritus Professor of Law at UiTM. The views expressed are entirely the writer’s own.

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Opinion , Shad Faruqi


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