IRREGULAR payments and wastage by government agencies in 2020 have resulted in a loss of RM620 million, the Auditor-General’s (AG) Report revealed.

Released to Parliament today, the AG’s report on the federal government showed that RM510.49 million was lost due to irregular payments, with the National Security Council (NSC) being responsible for RM499.18 million.

According to the report, the government had commissioned the construction of the Government Integrated Radio Network (GIRN) in 2007 through a public private partnership with the concession company.

A check on the website shows that the business registration number belongs to Sapura Research Sdn Bhd. 

The contract, which is for 22 years, would involve constructing the system for two years for RM2.2 billion while the system maintenance contract, which began in February 2009, would cost RM1.834 billion. The service maintenance fee was RM956.15 million from February 2009 to January 2014. 

According to the report, there were three additional contracts for maintenance signed for RM1.61 billion.

In the report, AG Nik Azman Nik Abdul Majid said that NSC had paid RM499.18 million for maintenance work without verifying the KPI report. 

“Between January 2019 till October 2020, two out of five of the parameters  (Handover between calls (data) for KPI Retainablity and Data Throughput) were reported as not available,” said the AG. 

“Although this is not in accordance to the contract, RM499.18 million was paid in full to the concession company, This happened as the NSC technical officer did not verify the KPI report (from the concession company),” said the AG.

The AG found that NSC had also failed to deduct a rebate amounting to RM2.5 million for non-performance and paid the concession company RM23.5 million in insurance claims although there were no copies of the issue. 

Besides that, the AG said that NSC had also paid out RM150.19 million to the company despite not verifying the maintenance work and other claims. 

The audit also revealed that the government had paid for the company’s staff costs although 12 of the employees were working for one of the company’s subsidiaries. 

“All this had caused a loss to the government while the weak agreement terms did not protect the government’s interest but benefited the concession company,” said the AG.

According to the government, the GIRN project was aimed at enabling more efficient communication between personnel stationed at the operation/event site and those at the central control room via its Line Dispatcher system.

It will also allow a more sophisticated and integrated voice and data service and is to be used by 17 government agencies provided by NSC. – October 28, 2021.