WEAKNESSES remain in project implementation and must be addressed to achieve targets set by the federal government, said the Auditor-General’s Report 2016 series 2 released today. 

“In general, ministries and departments have properly planned their programmes, activities and projects,” the federal government audit conclusion said.

“However, in terms of implementation, there were several weaknesses that should be resolved promptly to ensure that each (project) is implemented in an efficient, economical and effective manner to achieve the stated objectives,” it said, which reflected similar findings in the series 1 report released in May. 

In 2016, 128 federal statutory bodies under 23 ministries received RM109.23 billion, an increase of RM7.06 billion, or 6.9% compared with RM102.17 billion in 2015.

Revenue for the 9 federal consolidated funds and trust account amounted to RM1.15 billion, a decline of RM839 million, or 42.1% from 1.992 billion in 2015. 

The management grant received by 80 federal statutory bodies under 21 ministries amounted to RM13.54 billion, a decline of RM604 million, or 4.3%, from RM14.14 billion in 2015. 

The federal government incurred a deficit of RM38.4 billion with its debt ratio to gross domestic product (GDP) at 3.12%.

The deficit was financed by internal and external loans amounting to RM99.86 billion. The loans were also used to repay existing debts and financed the Housing Loan Trust Fund. 

The National Audit Department audited 25 ministries, 18 departments and 38 statutory bodies in 2016.

In general, the financial management performance of federal ministries improved compared with previous years.

In 2016, all 25 ministries (100%) were rated as excellent compared with 16 out of 25 ministries (64%) in 2015 and 20 out of 24 ministries (83.3%) in 2014. Performance of the financial management audit conducted annually in 18 federal departments has also improved. 

In 2016, 16 departments (88.89%) were rated as excellent and two rated good. Whereas the performance for 38 statutory bodies audited on a three-year cycle basis showed that 16 agencies (39.5%) were rated excellent, 19 (52.6%) good and three (7.9%) rated satisfactory. 

The government’s financial report, signed by Auditor-General Madinah Mohamad, however, said the financial management performance could be improved if controlling officers or departmental heads undertake action to rectify the weaknesses as highlighted by the National Audit Department.

She recommended that lead officers conduct comprehensive checks to determine whether weaknesses highlighted also occurred in other departments. 

“The involvement of controlling officers or heads of department should be intensified through a hands-on approach on financial matters and that ministries or departments should enhance the effectiveness of internal audit.”

The reported further recommended that secretary-general of ministries or departmental heads should carry out a thorough examination to ascertain whether other programmes, activities or projects have the same weaknesses and thereby take corrective action and improvements. 

The auditor-general’s office added that ministries and departments must ensure that projects worth RM50 million and above comply with the stipulated value management guideline issued by the Economic Planning Unit (EPU). – November 27, 2017.