Latest news with #AuditorGeneral's
New Straits Times
22-07-2025
- Business
- New Straits Times
TI-M: AG's report exposes systemic failures, urges urgent reform
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 "Outdated procedures, weak financial oversight and a culture of impunity have allowed such practices to continue year after year," said the watchdog in a statement.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.
New Straits Times
21-07-2025
- Business
- New Straits Times
Hospital awards RM25.6mil catering contract to non-halal certified firm
KUALA LUMPUR: Hospital Canselor Tuanku Muhriz (HCTM) in Cheras awarded a three-year catering contract worth RM25.64 million to a company that did not possess halal certification from the Malaysian Islamic Development Department (Jakim). However, the Auditor General's Report 2/2025 said the company, identified as 0267299-T, won a tender to "provide halal food to HCTM patients" from February 2024 to February 2027. The report noted that the company aimed to streamline the status of its main kitchen, which had received halal certification from Jakim. The report said that the technical evaluation committee did not recommend 0267299-T, citing the company's failure at the technical evaluation stage as it lacked both halal and Hazard Analysis and Critical Control Point (HACCP) certifications. The committee said the company failed the technical evaluation due to lack of experience and not having enough food servers and trolleys for the hospital. Nonetheless, the company was selected because it met the financial evaluation committee's criteria, the audit said. Only two out of 12 bidders passed the technical assessment stage, and 0267299-T was among the 10 companies that failed after scoring 53 per cent. The technical committee recommended company 0797329-A as it scored highest, at 87 per cent. "The audit review found that the company that was offered the contract, namely 0267299-T, failed the technical assessment but was still brought to the Financial Assessment Committee," it said. The company was ranked fourth in having a cheaper price. Although it passed the financial committee stage, it was not recommended. "The pre-tender committee was unable to make a recommendation that could be most profitable, reasonable and provide the best value-for-money to Universiti Kebangsaan Malaysia. "This is because no tenderer passed and was recommended by both the technical and financial evaluation committees. "Therefore, the pre-tender committee recommended company 0912013-P with the justification of the lowest price offer and meeting the minimum specification score," it said. In response to the audit, Universiti Kebangsaan Malaysia (UKM), which oversees HCTM, said the previous patient food supply contract was nearing its end, and the tender committee had to proceed with the new tender to avoid service disruption. UKM also said that 0267299-T had applied for HACCP certification on Sept 24 last year, but the audit process could only be carried out after renovation works at HCTM were completed. The report did not include UKM's response to 0267299-T's lack of halal certification. The company was not recommended by the technical evaluation committee after its linear accelerator (Linac) machines failed to meet integration requirements with HCTM's existing systems. As a result, key medical equipment, including the Linac machines, CT simulators and contrast injectors, faced delays. Although scheduled for delivery by Sept 18 last year, the Linac machines had yet to arrive at the time of the audit, marking a 122-day delay. "The delay in the supply of (this equipment) within the stipulated timeframe has affected services at HCTM. "The delay in starting treatment has had an impact on patient survival, with 20 patients experiencing waiting periods ranging from one to eight weeks," the audit said. In the report tabled in parliament this morning, the auditor-general found "serious irregularities" in UKM's procurement process, involving three tenders worth RM58.45 million. The irregularities occurred when the tender procurement committee selected companies that were not recommended by the technical evaluation committee, financial evaluation committee, or pre-tender committee.
The Sun
21-07-2025
- Business
- The Sun
Audit report exposes contract weaknesses in Malaysian Army vehicle deals
KUALA LUMPUR: The Auditor General's (AG) Report 2/2025 has uncovered critical flaws in the Malaysian Army's (TDM) procurement and contract management, raising concerns over national defence preparedness. The audit highlighted delays, unclaimed fines, and improper procurement practices involving RM7.8 billion worth of armoured vehicle contracts. Key findings from the report include a two-year delay in the delivery of 68 GEMPITA vehicles by a local contractor, resulting in an overdue fine of RM162.75 million. The government had already paid RM7.52 billion despite the contractor missing deadlines. Additionally, the RM53.93 million performance bond was insufficient to cover penalties. Maintenance and spare parts delays for GEMPITA, ADNAN, and PENDEKAR vehicles led to unenforced fines of RM1.42 million. The report also criticised small-batch procurement by Responsibility Centres (PTJs), bypassing open tender rules for purchases exceeding RM500,000. The Defence Ministry cited Movement Control Order (MCO) disruptions as a cause for delays, but auditors stressed that timely enforcement of penalties could have mitigated losses. The AG recommended structured contract timelines and centralised approvals for ad hoc procurements to reduce governance risks. – Bernama
Barnama
21-07-2025
- Business
- Barnama
Contract Management Weaknesses Affect TDM's Preparedness – AG Report 2/2025
KUALA LUMPUR, July 21 (Bernama) -- The Auditor General's (AG) Report 2/2025 has revealed significant weaknesses in the procurement management and administration of the Malaysian Army's (TDM) armoured vehicle contracts, which could potentially expose the government to the risk of loss. According to AG Report 2/2025 tabled in the Dewan Rakyat today, there were contracts worth RM7.8 billion involving major armoured vehicles during the audit period from 2020 to 2023, namely GEMPITA, PENDEKAR, ADNAN, LIPAN BARA and MIFV. The contracts were supposed to support TDM's readiness to become a modern land force capable of defending Malaysia's sovereignty, but delays and administrative weaknesses have undermined the achievement of that objective. 'Among the key findings was a significant delay in the supply of 68 GEMPITA vehicles by a local company, which resulted in a fine of RM162.75 million which was only claimed on Jan 15, 2025, 746 days (two years and 15 days) after the contract expired on Dec 31, 2022.' 'The audit also found that the government had made the full payment of RM7.52 billion despite the company failing to comply with the agreed delivery schedule, while the contract performance bond of RM53.93 million which expired on Dec 31, 2024 was also found to be insufficient to cover the amount of the fine,' the report said. The review for the same period also found delays in maintenance, repair and spare parts supply services for GEMPITA, ADNAN and PENDEKAR vehicles, with an estimated fine of RM1.42 million still not imposed as of end 2023, despite the service being 227 days late. 'The report also reprimanded the implementation of procurement in small batches by several Responsibility Centres (PTJ) which violated financial regulations, involving direct purchases and quotations totalling RM107.54 million for the period 2020 to 2023, while procurement exceeding RM500,000 per year should have been through open tenders,' the report said. In addition, the absence of major contracts for several types of vehicles such as MIFV and LIPAN BARA during the audit period forced PTJs to implement ad hoc procurement, thus increasing governance risks. The Ministry of Defence explained that the delays were due to factors beyond their control including the implementation of the Movement Control Order (MCO), but the audit stressed that measures such as issuing fine notices should have been implemented while the contract was still in force to protect the government's interests.
New Straits Times
21-07-2025
- Business
- New Straits Times
AG report urges continued subsidised cooking oil programme with stronger price monitoring
KUALA LUMPUR: The Auditor General's (AG) Report 2/2025 has recommended several improvements for the subsidised cooking oil programme to the Domestic Trade and Cost of Living Ministry (KPDN), stating that it should be continued. The report said that KPDN should aggressively monitor the retail price of subsidised cooking oil by collaborating with enforcement agencies such as local authorities to ensure compliance with the RM2.50 per packet price ceiling. "Firm enforcement actions must also be taken immediately against sellers who charge above the controlled price, including imposing fines, revoking licences, and seizing goods," the report said. In addition, it recommended expanding targeted subsidy distribution through programmes like the Sumbangan Asas Rahmah (Sara) initiative, which provides subsidies via special vouchers for essential goods, including subsidised cooking oil. It said such programmes serve as effective control mechanisms to ensure government aid is used specifically for basic necessities by target groups such as the B40 income group and the hardcore poor. "KPDN should conduct monitoring through a centralised database that records each transaction in real time and enables better detection of any misuse of these special vouchers. "This approach not only increases transparency and accountability, but also ensures that aid reaches those who truly need it," it added. The ministry was also advised to regularly review and improve the standard operating procedures (SOPs) of the Cooking Oil Price Stabilisation Scheme (COSS) to address existing implementation gaps, including the management of damaged cooking oil and halal certification monitoring. KPDN should also introduce a targeted distribution policy to ensure subsidies are only given to eligible households based on specific criteria, with data referring to existing sources such as the eKasih and Padu databases. "This measure is aimed at preventing access to subsidies by foreign nationals or commercial entities that are not eligible. "The purchase limit for subsidised cooking oil should also be reviewed to match actual household needs and to prevent large-scale purchases for commercial use, which fall outside the intended policy scope," it said. The ministry should also revisit current regulations to better enforce compliance by licence holders, including suspending or revoking the Controlled Goods Retail Licence (CSA) of those found violating licence terms, such as holding two licences under the same address. Among other recommendations is the comprehensive use of the digital system eCOSS to monitor real-time records of subsidised cooking oil sales and distribution, helping to reduce data manipulation and non-compliance. "KPDN must also require all subsidised cooking oil packaging companies to obtain halal certification as a licensing condition, and take legal action under the Trade Descriptions Act 2011 (Act 730) against companies using counterfeit halal logos," the report said. It also called for KPDN to develop a comprehensive management procedure for damaged cooking oil, covering disposal methods, early detection, prohibition of repackaging, mandatory declaration of damaged oil, and reporting to KPDN for monitoring and record-keeping purposes.
