Civil servants waste more than RM122 billion every year

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Prime Minister Anwar Ibrahim at an assembly with civil servants. For image info, go to https://www.theborneopost.com/2023/03/06/pm-anwar-wants-civil-servants-to-handle-big-task/ 

Civil servants waste more than RM122 billion every year

KUALA LUMPUR, Nov 7, 2024: The Auditor-General’s Report has revealed that Malaysia’s civil service wastes more than RM122 billion every year.

And this wastage will continue unabated because civil servants do not fear wasting public funds as almost no one is held responsible and accountable for the billions lost every year.

So, why even bother to waste money and time to compile such annual reports when no action is taken against anyone for wasting public funds?

No News Is Bad News reproduces below a compilation of news reports by The Coverage on the wastages of public funds:

News

Malaysia Civil Service Exorbitant Mismanagement Wastage Over RM122 Billion Annually

7 November, 2024

The Auditor-General’s Report usually highlights the wastage and leakage of allocated budget and taxpayers’ money

Don’t expect any civil servants to be charged and jailed for the mismanagement of funds.

The Auditor-General’s Report has no impact on any civil servant as the auditor-general has no authority to prosecute.

The enforcement agencies pretend not to know, not to see, and not to rock the boat.

The blame is always on the standard operating procedure (SOP) and not on anybody else.

When nobody goes to jail for the misappropriation of funds, most civil servants think it is SOP as no action is taken.

The most salient point raised by the recent Auditor-General’s Report 2022 was the exorbitant wastage running to over RM122 billion which was seen as recurring annually.

How then will Malaysia be poised to emerge as a dynamic and resilient player in the global economic arena if mismanagement and corruption work hand in hand? Are civil service officers being reprimanded or fired for losses and wastage in their organisations? NO! As a result, the losses keep repeating.

There was also an incident where those civil servants who caused the loss of funds did so due to stupid decisions and not due to corruption.

There is no law to charge for stupidity. When the head of the government can do what he likes with impunity, the civil servants just follow.

The rakyat won’t be able to see any changes now and forever as the ruling coalition depends on the civil servants to vote them in.

This corruption is so deeply entrenched within the civil service that it is nearly impossible to rectify.

Source : Malaysiakini

In presenting the report Federal Agencies, Auditor-General of Malaysia Datuk Wan Suraya Wan Mohd Radzi, highlighted five federal agencies recorded deficits amounting to RM3.115bil.

The five are the Federal Land Development Authority (Felda), the Electric Industry Fund Group (KWIE), the Railway Asset Corporation (RAC), the National Trust Fund Group (KWAN), and the Kuala Lumpur City Hall (DBKL).

The report found that Felda’s expenditure in 2022 amounted to RM1.947bil.“The expenditure within Felda exceeded the income of RM0.942bil due to an increase in the impairment of value by RM0.742bil, resulting in a profit loss of RM1.005bil,” it said.

“This situation is partly caused by the impairment of investment value by RM0.380 billion, amounts owed by subsidiary companies totalling RM0.193bil, and settler debts amounting to RM0.147bil,” the report added.

It said that KWIE’s expenditure was RM1.015bil in 2022, exceeding its income of RM0.025 bil and this has produced a deficit of RM0.990bil in KWIE.

“This is because KWIE does not receive any revenue from the excess electricity tariff rebates or charges due to increased fuel costs.

Additionally, KWIE’s funds are used to cover rebate expenses as a mitigation plan to minimize the impact of electricity tariffs on consumers,” it said.

Meanwhile, the RAC’s expenditure in 2022 was RM0.641bil, surpassing its income of RM0.157bil, resulting in RM0.484 bil of losses.

This is due to a decrease in the sale of used goods by RM0.162bil in 2022.

As Malaysia spearheads its economic recovery, it’s disheartening to see such leakages exposed.

“The nation can pave the way to a more robust and technologically advanced future by only curbing the wastage by mismanagement by the civil service. In contrast, embracing innovation, promoting collaboration, and prioritising economic development is the only way to gain economic momentum.

“Malaysia’s economic outlook is optimistic, provided the civil service and other government agencies play a significant role in driving innovation, competitiveness, and economic growth.

“The latest Auditor-General’s Report reports losses by government agencies annually, which is waste of taxpayer money,” said a concerned Malaysian and experienced banker.

Gopala Krishnan,(Pic, Above) who spent 40 years in the Banking industry and retired as Deputy Chief Executive Officer of a leading bank’s Treasury and Investment Banking, expressed his concern about the report, which revealed that ten federal agencies have loan balances of RM 122 billion for 2022.

The Auditor-General had said her office introduced a dashboard for the public to see who is doing poorly and why. This is also to ensure that audited federal agencies can take appropriate action to improve their financial statement preparation in the future.

She is proactive and has developed the Auditor-General’s Dashboard (AGD) online platform starting this year. (https://agdashboard.audit.gov.my/)

Through AGD, all types of Auditor-General’s certificates on Federal Agencies’ Financial Statements will be displayed.

“The display via AGD demonstrates the importance of good governance through principles of transparency, accountability, efficiency, and effectiveness in addressing audit findings,” she said through the Auditor-General’s Report on Federal Agencies’ Financial Statements for the Year 2022 presented in the Dewan Rakyat on Wednesday (March 6).

The objective of the AGD is to ensure that agencies’ audit units take immediate action on the issues raised in the Auditor General’s Report (LKAN), thus resolving outstanding issues. It also aims to inform the public online about LKAN issues concisely and accurately and promote transparency.

It is also a pressure trigger to speed up the resolution of issues raised in LKAN. To further improve public perception of the Auditor General’s report.

Wan Suraya said that as of Jan 11, 140 out of 144 Federal Agencies’ Financial Statements for 2022 had been submitted for the Auditor-General’s verification, with 130 statements being audited and certified.

It was reported that 116 Federal Agencies’ Financial Statements for 2022 have been issued Auditor-General’s certificates without reprimand. While 14 Federal Agencies’ Financial Statements have been issued Auditor-General’s certificates with Modified Opinions, comprising 13 Adverse Opinions and one Disclaimer of Opinion.

She said financial statement analysis has been used to assess the financial performance of federal agencies based on five aspects: Current Excesses and Deficiencies, Assets and Liabilities, Federal Government Grants, Loans, and Investments in Subsidiary Companies.

For the first time, Wan Suraya said this year’s report also included an analysis of subsidiary companies experiencing losses for three years starting from 2020.

“The introduction of Key Audit Area Reporting in 2023 for auditing Federal Agencies’ Financial Statements for 2022 emphasises material and significant matters affecting federal agencies’ financial position and performance.

“The Key Audit Areas for the 2022 financial statements are related to issues of going concern, valuation of investments, and dividend payments to contributors. This is in line with strengthening governance in the federal agency administration management system, including addressing issues of inefficiency, wastage, and extravagance,” she said.

Source : Business Today

Lack of public anger over A-G’s reports?

I have been getting WhatsApp messages voicing consternation over the civil service’s efficacy and integrity, or rather the lack thereof, as shown by the latest auditor-general’s report.

Year in, year out, we hear the same sorry stories about the civil service: wastage of public funds, inefficiency, profligacy, incompetence and dishonesty.

One of the most forwarded bits of news was the auditor-general’s call for an overhaul of the management of the National Professors Council’s (MPN) which is overseen by the Prime Minister’s Department (PMO).

The 2024 report, released on July 4, recommended that the PMO refer the irregularities in the management of the MPN to the enforcement agencies.

According to a FMT report, the irregularities include the discovery that two MPN trustees misused RM373,516 of the council’s funds to finance the operations of two companies in which they held shares.

Auditor-general Wan Suraya Wan Mohd Radzi noted a conflict of interest as the trustees had failed to declare their interests as shareholders in the two companies in accordance with the Companies Act 2016.

The A-G also found that the council’s chairman and deputy chairman were paid RM207,000 in allowances without ministerial approval.

The MPN received government grants totalling RM28.06 million from 2015 to 2018, RM3.38 million in 2022 and RM4.4 million in 2023.

There were other issues too, such as the inefficient management of grants, but you can read the details elsewhere in the FMT report.

What I want to say is that this is terribly, terribly damaging to MPN and public university professors in general.

Already, people refer to some academics as kankong professors because they are seen to be unfit for the position based on some of the claims they make, their theses or other actions.

Two of those who contacted me expressed disgust, saying professors were entrusted to teach new generations of leaders and if they were not quite effective or honest, what could we expect of the thousands of students who leave the universities every year.

One even said: 

No wonder there is so much mismanagement and corruption in the civil service, resulting in the A-G having to work very hard.

But, to be fair, being a professor does not automatically make one a good manager of money. And there are competent and honest professors.

Still, the public expects better from its professors, especially those in public institutions whose salary comes from the tax payer.

The A-G called out Mara Incorporated Sdn Bhd  for its inefficient implementation of activities resulting in accumulated losses of RM286.3 million.

The A-G said RM384.49 million in spare parts were wasted because Royal Malaysian Navy ships did not use them. The report also found weaknesses in the procurement of new vessels, which did not follow schedule.

The above are just a few of the cases from the A-G’s report. There are many more such weaknesses detailed in the report about government departments and companies.

The weakness in the implementation of government projects arose, A-G Wan Suraya  said, due to factors such as a lack of coordination between agencies, a lack of monitoring or supervision, incomplete databases and weaknesses in policies and work procedures.

These weaknesses result in programmes, activities or projects not being completed within the set period, substandard work quality, increased costs, and the government not receiving value for the money spent,

What a terrible waste of public funds. If this wastage is prevented or even reduced, there is so much that the money saved can be used for.

As usual, the ministers and the chief secretary to the government will trot out the usual statements about not tolerating such things, with promises of action.

I’ve been writing about A-G’s reports for decades and I’ve heard the same excuses from the authorities.

And the findings of the A-G are similar, except for a difference in the department or agency, the items or projects involved and the amount of money wasted.

Let me give you an example: The 2013 auditor-general’s report found that almost RM12 million in pensions was paid to 3,000 dead veterans. The then defence ministry secretary-general Ismail Ahmad said his staff would improve themsselves.

The A-G, in the 2007 report, said they were unable to locate RM9.56 million in equipment supposed to have been sent to 812 schools between 2005 and 2007 for the teaching of Science and Mathematics in English.

In the 1993 report, the A-G was astounded that RM54 million was spent on repairing and maintaining a Royal Malaysian Navy warship, bought secondhand in 1977 for RM15 million.

I can go on but I’m sure you get the picture.

Source : FMT

Its not that certain commentator didn’t get it when the latest Auditor General report was brushed aside as “same sorry stories about the civil service: wastage of public funds, inefficiency, profligacy, incompetence and dishonesty” that will eventually be forgotten in public sphere. 

Perhaps he is right since the issues raised by the Auditor General that was hot in July has quietened down in the media. Well, he failed to realise the report started to gain attention from its initial release in March. 

Maybe there was no heads up to alert the commentator that the report is not merely about the RM42 billion cost of projects being audited, or 64 recommendations to the government, or open secrets known over last few years of misappropriation such as the HRDC finally came to surface. 

It’s also not about last year appointed and impressive 29 years resume of Auditor General, Dato Wan Suraya’s second Auditor Report release of fully her own. The report was lauded by Tan Sri Azman Hashim for its out of the ordinary independence and transparent. 

Its about her tasking “to transform and restructure the auditing system and strengthen the country’s financial management“.In last year’s report for 2022, she commented that there was an improvement in financial position from 2021 despite increasing national debt and liabilities and recommended strengthening public financial discipline. 

But she highlighted the glaring wastage of RM122 billion recurring annually. The public sector had serious issue. Had not for the wastage, the almost RM80 billion annual subsidy could still be provided to the rakyat. 

Source : Thick Brick Blogspot

Auditor General’s Report: RM41.97 bln in govt projects audited, broadband failures in Sabah and peninsula flagged

The Auditor-General’s Report (LKAN) 2/2024, tabled at the Dewan Rakyat today, highlighted nine audits involving 11 ministries, with the total cost of the audited projects amounting to RM41.97 billion.

Auditor-General Datuk Wan Suraya Wan Mohd Radzi said the audit covered projects of federal government ministries, and departments as well as federal statutory bodies. The scope of the audit included projects implemented during the Ninth Malaysia Plan (9MP) to the 12MP.

She noted several weaknesses in the implementation of government projects, arising from various factors such as lack of monitoring or supervision by relevant parties, lack of coordination between the relevant agencies, incomplete databases, and weaknesses in policies and work procedures.

“These weaknesses result in programmes, activities, or projects not being completed within the set period, substandard work quality, increased costs, and the government not receiving value for the money spent,” she said in a statement.

Wan Suraya highlighted that significant issues raised in LKAN 2/2024 included the management of the River of Life (RoL) projects, the management of broadband and telecommunications network infrastructure strengthening programme, as well as projects under the East Coast Economic Region (ECER).

In the attached reports, the National Audit Department believes that the River of Life (RoL) projects will not be successfully completed this year. As of July 2023, 12 projects were still in the pre-implementation stage, eight were being implemented, and the contractor has not been appointed for two projects after the previous contracts were terminated.

Additionally, the objectives of the RoL have not been fully achieved, particularly the goal of improving the river’s water quality to Class IIB, suitable for recreational use with body contact. There have been delays in the completion of three projects and the termination of one sewerage project, resulting in an estimated cost increase of RM234.72 million. Furthermore, river beautification work was not carried out along 2.2 kilometres of Sungai Gombak.

Regarding the management of the broadband and telecommunications network infrastructure strengthening programme, the report stated that the goal of expanding high-speed Internet (fibre) coverage and connectivity in rural areas through government financial allocation has not yet been fully achieved.

“A total of 28 out of 87 broadband alignments (Broadband for General Population – BBGP project area) in Sabah and the Peninsula, worth RM53.60 million, have not been subscribed to or used since their completion in 2013 and 2017.

“Part of the infrastructure is idle, cable line connections are disconnected, and equipment is damaged. A total of 337 out of 597 schools still use broadband or satellite technology with limited speed, even though fibre technology has been provided under the Point of Presence (PoP) Phase 1,” according to the report.

Regarding the management of projects under the ECER, the report stated that 37 out of 43 industrial plots were not filled with investors for the Tok Bali Integrated Fisheries Park Project (TBIFP), the Malaysia-China Kuantan Industrial Park (MCKIP 3), and the Kertih Biopolymer Park (KBP) Phases 1 to 3.

“Additionally, infrastructure such as the Animal Production Unit (APU), storage, and workers’ housing worth RM4.03 million at the Commercial Goat Farm Development Project site in Ulu Tersat, Terengganu has not been used since 2011,” it said.

Meanwhile, Wan Suraya said LKAN 2/2024 was tabled in Parliament after obtaining consent from His Majesty Sultan Ibrahim, King of Malaysia. It was the second LKAN presentation this year, following the presentation on March 6.

She said that, in addition to reports on the activities of federal government ministries, departments and federal statutory bodies, LKAN 2/2024 also covers reports on the management of federal government companies.

LKAN 2/2024 will be uploaded on the National Audit Department website after the presentation in the Dewan Rakyat, and the public can browse it via www.audit.gov.my.

She also mentioned that a total of 64 audit recommendations were submitted in LKAN 2/2024 to be implemented by ministries, departments, agencies, and government companies audited at the federal level.

She added that the audits conducted by the National Audit Department had a positive impact through corrective and improvement actions implemented by the government upon receiving the Audit’s warnings.

“Following up on audits from LKAN 2020, 2021, and 2022, through the Auditor General Dashboard (AGD) portal, it was found that the government has recovered refunds, including penalty claims, outstanding rent, and collections of Liquidated Ascertained Damages (LAD) estimated at RM100 million until the second quarter of 2024,” she said.

In related developments, Wan Suraya said that the department will implement the Digitalisation of National Audit Department (PPJ) services from July 2025, adopting inclusive and sustainable auditing techniques, methodologies, and approaches to become a regional leader in digital auditing.

She added that among PPJ’s initiatives is the use of artificial intelligence (AI) technology, including drones and remote auditing, as well as advanced data analytics tools to identify risks, internal control weaknesses, or red flags related to data or information obtained.

“Through PPJ, all information related to auditing, human resources, and LKAN will be integrated to produce accurate and timely outputs,” she said.

Source : The Borneo Post