Malpractices, mismanagement and misuse of funds

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Mismanagement, ‘leakages’ and the squandering of public funds have reached alarming levels, says Martin Jalleh.

The Auditor-General (A-G)’s Report, which was to be tabled in Parliament on Budget Day (15 October 2010) but delayed by a week, revealed how the Najib Administration took the country to new depths in the following areas:

National debt

According to the Auditor-General’s report:

  • Malaysia’s national debt for 2009 rose to RM362 billion or 53.7 per cent of GDP, its highest level in five years.
  • this was the first time the debt to GDP ratio had breached the 50 per cent mark.
  • from 2005 till 2008, there was a general decline in the ratio between the government’s debt to the GDP. It was 48.2 per cent in 2005, 42.3 per cent in 2006, 42.8 per cent in 2007 and 41.4 per cent in 2008
  • the AG’s report contrasts with PM Najib Razak’s reply in Parliament in June that Malaysia’s total debt had been reduced in 2009 to RM234 billion from RM236 billion in 2008. Najib had also said that the debt to GDP ratio for 2009 was only 34.3 per cent, up from 31.9 per cent in 2008.
  • the A-G’s report said that the national debt had actually risen beyond what was announced by Najib, largely due to an increase in the government’s domestic debt.
  • towards the end of 2009, the unsettled domestic debt and foreign debt amounted to RM362 billion, an increase of RM56 billion (from 2008’s RM306 billion) due to an increase in domestic debt.
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Over-spending

The Auditor-General’s Report for 2009 showed that:

  • the federal government had overspent by RM4.8 billion last year.
  • this would be the govern-ment’s second highest deficit in recent years. The highest deficit was recorded in the year before that (2008) when they recorded that they had overshot their operating budget by RM5.7billion.
  • eleven agencies – including the Malaysian Anti-Corruption Commission (MACC) and the Public Service Department – and 10 ministries had exceeded their operating budget by RM3.61 billion.
  • fifteen ministries and agencies had overspent RM3.7 billion for 42 projects under the Ninth Malaysia Plan.
  • the Defence Ministry topped the list with an overrun of RM2.0 billion for three projects, followed by the Education Ministry (RM927 million for four projects) and the Treasury Department (RM547 million for two projects).
  • under development expenditure, 43 projects by 16 ministries and departments had recorded a total overrun of RM465 million. The bulk of this was spent by the Works Ministry for 11 projects, involving RM357 million. Conversely, RM153 million for 38 projects was allocated, but was not spent by the 16 ministries and departments concerned.
  • “This shows there are still weaknesses in expenditure planning and management.”

Wasteful and extravagant expenditure

Examples of waste, mismanagement, misuse and even misconduct provided by the A-G reports were:

  • the National Higher Education Fund Corporation (PTPTN), which is projected to face a whopping cash flow deficit of RM46billion, mysteriously approved loans totalling RM24 million to 16,013 students who did not apply for the facility.
  • in a scheme which cost the Terengganu government RM25 million to provide a free laptop computer to every Year 5 primary school pupil – only 18.2 percent of 908 pupils polled took their laptop computers to the classroom.
  • million-ringgit scanner stuck in KLIA, under-utilisation woes;
  • ‘sandwich kosong’ for school kids, sardines missing
  • the maintenance cost of official cars at RM5 million was much higher than the purchase price of cars in Malacca. The Malacca Chief Minister’s Department spent RM5 million to maintain 51 cars from 2006 to 2009. The cost to maintain the official cars exceeded the price of the cars between 143 per cent and 281 per cent within five years from the date of acquisition.
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The A-G criticised the abuse of the first economic stimulus package (ESP) funds, for example:

  • RM753,723 was paid for 67 acquisitions involving 31 projects without the items being received or the jobs done under the First ESP
  • the upgrading of the VVIP room at the Langkawi Naval Headquarters Region 3 (Mawilla 3) with RM301,900 worth of chandeliers, home-theatre systems, fancy wall paper and other luxuries.
  • RM459,460 for decorative outdoor lighting for the Lumut Naval Base and RM144,118 to renovate an existing canteen that was in good condition with new White Horse tiles, plaster ceilings and cornices.

Martin Jalleh, a well-known political commentator, is a regular Aliran Monthly contributor.

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1 COMMENT

  1. Billions of funds injected into the cooperative system has not been acounted for, millions spent to set up apex organisations not reflected in the annual reports, the operations of the Cooperative commission,can be deemed illegal,school cooperatives are deemed illegal, what has happened to the profits of school coops, ANGKASA (may be) illegal in its existence as a apex cooperative organisation, The finance minister has to take stock of the off budget income at the whims and fancies of varous government authorities, gone into oblivion over a period

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