TI-M: AG's report exposes systemic failures, urges urgent reform

New Straits Times

22-07-2025

Transparency International Malaysia (TI-M) has urged the government to enact structural reforms in response to the Auditor General's Report 2/2025, warning that repeated governance failures revealed are emblematic of systemic breakdowns.
"Outdated procedures, weak financial oversight and a culture of impunity have allowed such practices to continue year after year," said the watchdog in a statement.
TI-M welcomed the expanded audit scope and 2024 amendments to the Audit Act 1957, which empowers the auditor general to monitor the implementation of recommendations via the Auditor General's Dashboard.
It also praised enforcement that helped recover RM157.73 million between 2024 and mid-2025. "However, laws and dashboards alone are insufficient.
TI-M stresses that transparency must be matched with enforcement, and that every agency implicated must be held accountable without delay."
TI-M said these recurring findings highlighted institutional weaknesses that demanded structural reform, not just administrative corrections.
It highlighted examples from the AG's report, such as Felcra Bhd's governance failures in lease procurements worth RM241.76 million and Universiti Kebangsaan Malaysia's RM58.45 million in irregular tenders awarded without proper committee recommendation.
The group also highlighted the army's failure to collect RM162.75 million in penalties for delayed military vehicles deliveries and improperly fragmented procurement contracts, ongoing weaknesses in cooking oil subsidy management by the Domestic Trade and Cost of Living Ministry and manipulation risks in the Finance Ministry's Pre-Qualification procurement method.
It said there must be immediate action on four fronts—enforcement, public disclosure, independent monitoring and legislative reform.
It demanded swift enforcement by the Malaysian Anti-Corruption Commission, police and Attorney-General's Chambers on all cases involving procurement fraud, abuse of power or negligence.
It urged all implicated ministries and agencies to publicly disclose remedial actions within 30 days, covering recovery of funds, disciplinary measures and procedural reforms, to restore public trust.
TI-M also pushed for mandatory implementation of Independent Expert Monitors in all Integrity Pacts for high-risk procurements, calling them a credible safeguard against collusion and corruption in major contracts.
Finally, it called for the tabling of a comprehensive Public Procurement Act that would provide a unified, legally enforceable framework with transparency standards, legal sanctions, whistleblower protections and independent oversight.
Meanwhile, Malaysia Integrity and Governance Society president Datuk Seri Dr Akhbar Satar said Malaysia must urgently enforce a stringent and transparent procurement framework to curb fraud, corruption and waste.
He said this in response to findings in the Auditor General's Report. "Transparency is the antidote to the disease of corruption.
Large amounts of public funds are channelled to the market through public procurement. It continues to be vulnerable to fraud and corruption."
Akhbar said contracts in organisations should be awarded to only qualified, reliable and competent contractors through a system with strong oversight and continuous monitoring.
"Procurement must follow a tight legal framework to ensure that standards are met and there is quality in the selection process."
Common procurement lapses, he said, included conflict of interest, misuse of power, undue influence in the needs assessment, embezzlement, fraud in bid evaluation and tender manipulation, and bribery of public officials.
Quoting former auditor-general Tan Sri Ambrin Buang, Akhbar said the estimate that up to 30 per cent of Malaysia's public project value was lost owing to mismanagement and corruption aligned with the World Bank's finding that 20 per cent to 30 per cent of public contract budgets were wasted.
He said lack of monitoring and failure to comply with policies were key drivers of corruption and spending leakages. The most common malpractice, he added, was taking "commissions" from bidders by unethical officers.
He urged heads of department to actively monitor projects and suppliers to prevent monopolies and abuses. "They themselves must be whiter than white," he said.