Sabah's financial position solid

Daily Express

02-07-2025

Published on: Thursday, July 03, 2025
Published on: Thu, Jul 03, 2025
By: Larry Ralon Text Size: Khairul cited the Sabah Fish Marketing Sdn Bhd under the Agriculture, Fisheries and Food Industry Ministry. The company failed to achieve its intended objectives and demonstrated poor financial and governance performance. Kota Kinabalu: Sabah recorded one of the highest state revenues in Malaysia for 2023, reaching RM7.6 billion, according to Sabah Audit Department Deputy Director Khairul Anuar Amat Johari. Speaking when presenting the Auditor General's Report during a seminar dubbed Integrity in Governance: The Core of Public Service Reform at Sabah International Convention Centre (SICC), Wednesday, Khairul said although State expenditure also increased, spending was in line with Sabah's financial capacity. He said Sabah did not face any shortage of funds to manage or implement development. The key indicator of Sabah's financial strength lies in the Consolidated Fund, which totalled RM6.756 billion as of Dec 31, 2023. This figure represents actual cash holdings involving the Consolidated Revenue Account, Consolidated Trust Account and Consolidated Development Account. 'This is not a deficit; it reflects the actual cash held by the State. Sabah uses a cash-basis accounting system, so any liabilities are reported accordingly in the financial statements,' he said. Sabah's assets also show a healthy outlook, with total assets valued at RM9.1 billion, claimable loans amounting to RM1.26 billion and public debt recorded at RM2.9 billion. As of 2023, the State's investments were valued at RM7.9 billion. 'We may have RM2.9 billion in debt, but with RM6.75 billion in cash reserves, this confirms that the State's financial position is solid and sustainable,' said Khairul. The Auditor General's Report 2023 confirmed that Sabah's financial statements presented a true and fair view of the State's fiscal standing, with Sabah receiving an Unqualified Opinion – a key indicator of sound record-keeping and compliance. However, the audit also highlighted persistent weaknesses in internal controls and financial management at department and agency levels. These included infrequent account reconciliations, delays in preparing supporting expenditure documents, outdated asset and inventory records and incomplete financial reporting. The Auditor General urged the State Government to strengthen governance by implementing a more integrated monitoring system and enhancing the role of Internal Audit Units at department level. Regular training for financial officers, especially in asset management, procurement and accounting compliance, was also recommended. The report further uncovered several critical issues, including project delays, incomplete utility connections and underperforming government-linked companies (GLCs). Khairul said among the findings was that 2,442 rural households in Sabah had yet to be connected to water meters, despite the completion of 12 rural water supply projects as of October 2023. Many residents were unable to afford the RM750 to RM1,000 connection costs, especially in Keningau, where some relied on underground water. In another case, 24 out of 28 broadband infrastructure sites under the Broadband to General Population (BBGP) project in Sabah had never been activated since completion in 2013. The audit found a lack of IP transit and the absence of a valid Network Service Provider (NSP) licence as key reasons for the project's failure to deliver internet connectivity. Inspections in Kinabatangan and Lahad Datu revealed abandoned infrastructure, disconnected cables, and damaged equipment due to lack of maintenance, he said. The Beaufort Sewerage Scheme, initially scheduled for completion in December 2018, was delayed by 1,276 days and remained incomplete as of June 2022. Despite 95 per cent physical progress, the audit found serious structural damage at the treatment plant site due to soil subsidence, including collapsed aprons and shifted staircases and retaining walls. 'A separate housing project in Kampung Sook, Keningau, completed in January 2020, has yet to be occupied due to the absence of an Occupation Certificate (OC). 'The houses had fallen into disrepair, with missing doors, broken windows and faded paint,' said Khairul. The report also criticised the State's flood mitigation programme. Although RM555.5 million was allocated for 20 projects under the 11th Malaysia Plan, they did not fully cover flood-prone areas and delays ranging from 366 to 1,249 days were recorded due to land acquisition, bad weather, utility relocation and movement control orders. The projects failed to prevent recurring floods and evacuations. On GLCs, many failed to meet their core objectives. Issues included the absence of strategic plans and key performance indicators, incomplete standard operating procedures and boards lacking competence or formal appointment terms. Internal audit units and audit committees were often not established, while joint ventures failed to generate returns. Several projects were completed but never used, loans went unpaid, and many companies recorded sustained losses while failing to return dividends to the State. Khairul cited the Sabah Fish Marketing Sdn Bhd under the Agriculture, Fisheries and Food Industry Ministry. The company failed to achieve its intended objectives and demonstrated poor financial and governance performance. The State Government pledged to act on the findings and work closely with the National Audit Department to enhance compliance and accountability. Follow-up actions include establishing a State-level audit monitoring committee and preparing recovery plans for underperforming departments and agencies. * Follow us on our official WhatsApp channel and Telegram for breaking news alerts and key updates! * Do you have access to the Daily Express e-paper and online exclusive news? Check out subscription plans available.
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