Auditor-General Report 2014: 8 Ways Taxpayers Money Was Mismanaged


On April 6, the first series of the Auditor-General report 2014 was tabled, and some shocking (or perhaps not) details were revealed.

The first report contains observations from 17 programmes of 14 Federal ministries and departments and the management of two Government companies. Some of the prevailing issues found in these programmes and departments are improper payment, work not adhering to specifications, unreasonable delays, unreasonable price, management of contracts, weaknesses in revenue management and weaknesses in management of Government assets.

Here are 8 of the most alarming ways taxpayers money is wasted based on the A-G report for 2014:

Auditor-general report 2014

1. Kelantan Matriculation College

Total cost: RM155 million
Ministry of Works/Ministry of Education

Kelantan Matriculation College was constructed to accommodate 3,000 students with Malaysian Certificate of Education in its Matriculation Programme as a preparation for enrollment to Public Higher Education Institutions. The Public Works Department (PWD) was appointed as the implementing agency on behalf of the Ministry of Education Malaysia (MOE).

The completion was targeted to be at 102 weeks, but after five extensions, the project was only completed 103 weeks and was only able to accommodate up to 2,000 students.

The quality of the construction and mechanical and electrical works are found to be unsatisfactory, and the design was inappropriate.

Auditor-general report 2014

2. Broadband project in East Malaysia

Total cost: RM88.13 million
Ministry of Communications & Multimedia Malaysia

The amount was paid to three contractors, namely Esajadi Sdn Bhd, Jaring Communications Sdn Bhd and Celcom Axiata Berhad, to install 935.6 km of fibre optic network in East Malaysia.

However, the actual distance was only 890.23 kilometres, 45.37 km short.

Auditor-general report 2014

3. Wisma Transit Kuala Lumpur (WTKL)

Total cost: RM66 million
Ministry of Defence

The Wisma Transit Kuala Lumpur (WTKL) is a transit camp for army that was going through a major refurbishment and improvement, which was due to complete in early 2002.

According to the Auditor-General’s report, the project encountered problems and was only fully completed and handed over to the Army in September 2008, and fully operational by January 2009.

The audit also found that 33% of the rooms were unusable due to damages.


4. BR1M claimed more than once

Total loss: RM3 million (2012 – 2014)
Ministry of Finance

The audit revealed that thousands of recipients of the 1 Malaysia People’s Aid (BR1M) cashed their hand-outs more than once, while some even claimed aid up to four times.

During BR1M voucher distribution, payment was made to approved applicants by cross-checking their names to the list, without checking the online database. This move gave the opportunity to BR1M recipients to claim more than once.

In 2014, 28 people claimed thrice, while nine claimed BR1M four times due to the loopholes.

Auditor-general report 2014

5. Procurement of furniture for Battalion Camp 5

Total cost: More than RM760,000
Ministry of Home Affairs

Battalion Camp 5, located in Simpang Renggam, Johor, was undergoing an improvement, and the report found that the procurement management of furniture was less than satisfactory.

It was found that the payment of RM760,150 was made before the furniture was supplied and supported by forged documents.

Furthermore, local bidders were not invited to give their quotations, which triggered an investigation by the Ministry and also the Malaysian Anti-Corruption Commission (MACC).

Auditor-general report 2014

6. Malaysian Armed Forces’ chartered flights

Total loss: More than RM375,000
Ministry of Defence

The Malaysian Armed Forces forked out over RM112 million to charter flights from Malaysia Airlines and AirAsia to shuttle its personnel between Peninsular Malaysia and East Malaysia.

However, due to 1,079 “no show passengers” between 2011 and September 2014, the ministry has suffered a loss of RM375,262.

Auditor-general report 2014

7. Perbadanan Nasional Berhad (PNS)

Government companies

Perbadanan Nasional Berhad (PNS) was found to have approved RM111.4 million in 534 Franchise Financing Scheme from 2012 to June 2014.

The approvals were not based on clear evaluation criteria and the monitoring mechanism was also not fully implemented. This posed a high risk of unpaid borrowers for the company.

To make matters worse, the audit also revealed that the financial performance of PNS subsidiary companies was unsatisfactory. Investment recorded was RM29.66 million, while investment cost was RM61.33 million.


8. People’s Housing Programme (PPR) in Sabah

Ministry of Urban Wellbeing, Housing & Local Government

The audit found that some People’s Housing Programme (PPR) in Sabah projects were completed after delays of between 614 and 2,504 days. The delays occurred at PPR projects in Papar, Tawau and Sandakan.

The longest delay was more than six years. Furthermore, the quality of the construction was found to be unsatisfactory, and the construction designs and plans approved by the superintending officer were impractical, incomplete and inappropriate.
Based on the auditor-general’s report, there are still many improvements to be made by the government to eradicate corruption, wastage and negligence and to increase transparency in government’s spending.

In order for corrective actions to be taken and improvements to be made, a total of 109 recommendations were made by the National Audit Department.

With the implementation of GST, the people’s expectation is even higher than before. The government is expected to be more prudent in their spending and be more transparent in everything.

Still don’t understand GST? Here it is – explained!

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