Auditor-General’s Report: Excellent rating for ministries. Really?

(FMT) – Analysts say the excellent rating given to federal ministries does not sync with the cases of project mismanagement or tender irregularities highlighted in the very same A-G’s report for 2016.

Some analysts have cast doubts over the excellent rating given to federal ministries in the Auditor General’s Report 2016.

They point out that it does not seem to correspond with the instances of mismanagement of projects and tender irregularities which caused the government to lose hundreds of millions in revenue – as highlighted in the very same report.

Also, they note that only 18 federal departments were audited last year, compared with the 40 departments that were audited the previous year. No explanation was given in the A-G’s report for this.

The 2016 report – tabled in parliament last Monday – was the first by Madinah Mohamad, who replaced long-time A-G Ambrin Buang.

The report says the National Audit Department (NAD) audited 25 federal ministries, 18 federal departments and 38 federal statutory bodies last year.

The Edge reported that all federal ministries were rated “excellent”, compared with 16 of 25 ministries in the 2015 report, presided over by Ambrin.

There was no explanation as to the basis on which the ministries were rated “excellent”.

Of the federal departments, 16 scored “excellent”, for a rate of 88.89%, compared with 22 out of 40 departments in 2015, for a rate of 55%.

The Edge quoted Dr Oh Ei Sun, principal adviser of Pacific Research Centre, Malaysia, and adjunct senior fellow of the S Rajaratnam School of International Studies, Singapore as saying:

“I agree that they should explain the criteria, especially when an all excellent [rating] is pronounced, and when public confidence in the efficacy of various official undertakings is not exactly at its highest point right now.”

Oh served as political secretary to Prime Minister Najib Razak from June 2009 to July 2011.

The Edge noted several instances of mismanagement highlighted in the A-G’s Report, adding that it was difficult for any-one reading the report to reconcile the “excellent” rating and the A-G’s findings.

However, the Edge noted that the A-G’s Report did say that the NAD had rated compliance with financial regulations by federal ministries and departments on certain key elements, including management control, budgetary control, receipting control and management of procurement.

Kelana Jaya MP Wong Chen.Kelana Jaya MP Wong Chen was quoted by The Edge as saying there was improvement in the federal government’s financial management. However, this was not because of a drastic change in the government’s attitude to leakages and wastage, but because of the austerity drive in government procurement over the last three years.

“With less being spent on procurement, wastage, mark-ups and corruption will fall accordingly. The A-G’s report, however, is not fully reflective of the state of corruption in Malaysia,” Wong told The Edge.

The Edge noted that the austerity drive could be seen from the gradual fall in budget allocation for supplies and services in the federal budget. For instance, in 2015, the allocation was RM38 billion, or 14% of the budget but last year it dropped to RM36.34 billion or 13.7% of the budget. This year, it dropped further to RM32 billion or 12.3% of the budget.

According to The Edge report, while the scope of the audit and methodology used on federal ministries, departments and agencies were not explained, the NAD went to great lengths to explain its audit of state departments and agencies.

However, The Edge report notes, the 2016 A-G’s report is the first one that includes the audits of subsidiary companies of federal ministries and statutory bodies. These include Tabung Ekonomi Kumpulan Usaha Niaga (Tekun Nasional), CyberSecurity Malaysia, and Syarikat Pemasaran Karyaneka Sdn Bhd.