Audit report finds RM1.2 billion irregular payments due to non-compliance with financial management

Non-compliance with financial management resulted in issues of irregular payments amounting to RM1.299 billion, a loss of public funds totalling RM11.45 million and a waste of RM8.87 million to the government in 2020.

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

“As of Dec 31, 2021, a total of 140 financial statements had 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, and 17 were given Audit Certificate With Reprimand,” he said in a statement on the Auditor-General’s Audit Report (LKAN) today.

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.

He said the performance audit was conducted to assess the achievements of the objectives of government activities, projects and programmes, as well as whether these were implemented prudently, efficiently and effectively.

“It also aimed to assess the extent to which public money was spent prudently, efficiently and effectively without waste and for the best value for money,” he said.

Meanwhile, a total of 10 performance audits worth RM39.719 billion 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 involved categories of projects and one involved ICT systems.

“Overall, the implementation of federal government activities, projects and programmes was 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 the relevant data was 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 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 an 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 for the relevant state government-owned companies, he said.

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

“Overall, four companies 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.

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 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 the respective state assembly sittings.