PETALING JAYA (Oct 24, 2011): The 2010 Auditor-General's Report released in Parliament today showed a marked improvement in the financial management of government departments and ministries compared to 2009.
The audit showed that last year, 17 ministries were ranked 'very good' in this category compared to just 10 in 2009, while government departments also showed encouraging progress, with 13 departments ranked 'very good' compared to only four the previous year.
However, Auditor-General Tan Sri Ambrin Buang said the performance could be improved further if the head of departments or supervisors do not only take corrective action but also preventive measures to overcome weaknesses.
At the same time, there were also some areas of concern in the report. The highlights include:
>> Giatmara, a subsidary of Majlis Amanah Rakyat (Mara), bought equipment for its skills training programmes at grossly inflated prices;
>> Nine ministries were found to have overspent RM3.73 billion of its operational allocation;
>> 11 government-linked companies (GLCs) only paid dividends to the government in certain years despite making profits for three consecutive years;
>>
Deals worth millions of ringgit made by Tourism Promotion Board via direct negotiation, without approval of the Finance Ministry;
>> More than half of the 143 Kemas kindergartens in Johor, Kelantan, Kedah and Sabah do not adhere to the menu prepared by the Rural and Regional Development Ministry;
>> More than 130 of about 1000 health ministry staff quarters have been abandoned for up to 12 years;
>> RM2.57 million pension paid out to about 2,000 dead pensioners.
Ambrin said the report is based on audits conducted on 51 activities or projects under 32 ministries and federal departments and the management of seven government-linked companies (GLCs).
“In general, the ministries, departments and companies have made satisfactory planning for the activities or projects conducted.
“However, in terms of implementation, there were a few weaknesses due to less intensive supervision, lack of effective monitoring, shortage of budget and lack of expertise and staff,” he said.
In addition, he said, the department also conducted audits on the financial performance of 47 GLCs from 2007 until 2009 based on the analysis done on data obtained from their audited financial statements.
Ambrin also said to help them rectify the weaknesses pointed out in the 2008 and 2009 reports, the department had made 424 recommendations.
Follow-up inspections until April 30 this year have found out that 172 (98.9%) of 174 recommendations made for the 2008 report have been acted upon accordingly by the respective parties.
As for 2009, he added, 220 (88%) out of 250 recommendations made have been implemented.
“For the 2010 report, 297 recommendations have been made to the respective ministries, departments or companies for corrective action to be taken or to avoid repeating the same mistakes.
“The Auditor-General will continue to monitor the situation to ensure they take appropriate actions with respect to our recommendations and the status will be updated in this year’s report later,” he said.
Ambrin also said in general, the financial statement of federal government reflected the true picture of its financial status as at Dec 31 last year.
“Its operating revenue, cash flow and accounting records have been well maintained and updated.
“However, in terms of financial management, audit has found out that there were still some financial rules which were not fully complied with by the ministries and departments concerned,” he said.
The reason for this, he said, has been identified as among others, lack of manpower and training in financial management and lack of close supervision and monitoring.
The department has also taken several steps to help the departments and ministries improve their weaknesses in financial management.
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