Its not that certain commentator didn't get it when the latest Auditor General report was brushed aside as "same sorry stories about the civil service: wastage of public funds, inefficiency, profligacy, incompetence and dishonesty" that will eventually be forgotten in public sphere.
It's also not about last year appointed and impressive 29 years resume of Auditor General, Dato Wan Suraya's second Auditor Report release of fully her own. The report was lauded by Tan Sri Azman Hashim for its out of the ordinary independence and transparent.
Its about her tasking "to transform and restructure the auditing system and strengthen the country's financial management".
In last year's report for 2022, she commented that there was an improvement in financial position from 2021 despite increasing national debt and liabilities and recommended strengthening public financial discipline.
This year Wan Suraya introduced the Auditor-General's Dashboard (AGD) online platform where all types of Auditor-General's certificates on Federal Agencies' Financial Statements will be displayed. This is essentially introducing transparency, accountability, efficiency, and effectiveness in audit findings towards achieving good governance.
The priority of national audit is, to quote from her keynote address at a recent Bank Audit Conference 2024, "to respond to the concern by the government over instances of non-compliance and internal control weaknesses that are repeatedly mentioned in the annual audit reports in the past".
This is exactly what the action and follow-up the commentator meant, isn't it?
From the latest Auditor General report onward, the National Audit Department will trace the public money through the various GLCs and agencies. The more significant tradition-departing changes from Wan Suraya is an amendment to the Audit Act to expand the scope to audit government guarantees.
This blog is supportive of this effort. The Edge Weekly column below on the amendment:
An audit of necessity
By The Edge Malaysia
This article first appeared in The Edge Malaysia Weekly on July 29, 2024 - August 4, 2024
The amendments to the Audit Act 1957 are long overdue. The changes to the law essentially mean that any entity that raises funds via Government Guarantee (GG) will have its books scrutinised by the National Audit Department (NAD).
In a move that will increase accountability and transparency of companies handling public funds, the amendments, which have gone through Dewan Negara, will be gazetted soon.
More importantly, the amendments leave no room for discretion. The law requires that NAD look at the books of any entity that has raised funds through a GG.
For instance, in the 1Malaysia Development Bhd (1MDB) financial scandal, the then prime minister Datuk Seri Najib Razak signed off letters in 2009 to exempt the government-owned entity from being audited by the NAD. The law should now cover this loophole.
1MDB’s books were, however, audited by two of the big four auditing firms.
But there are distinct differences between an audit undertaken by the NAD and private firms. Apart from the financials, the NAD audit looks at the viability and progress of projects undertaken with funds given by the government.
More importantly, it also covers areas of corporate governance and highlights investments that have gone wrong or that are dubious.
When there are serious problems, the NAD tends not to mince its words in its report, which was why the audit on 1MDB that started in March 2015 and completed a year later was made a classified document.
The audit report was only declassified in 2018, after a change in government and Najib was ousted as prime minister.
Another reason why the NAD report is more effective is because it garners public attention. Every time the Auditor-General’s report is released it makes headlines and keeps ministers on their toes, albeit mostly only temporarily.
What continues to be lacking is the resolve to rectify shortcomings highlighted by the Auditor-General.
Hence, amending the law is good. But more can and should be done to ensure that the Auditor-General’s Report is taken seriously given the frequent lack of accountability in the mismanagement of funds or projects.
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If there is one comment on the latest Auditor General report, NAD may have erred with regards to the reported loss attributed to MARA Inc.
The properties purchased were correctly made through 2012 to 2014 and the sales were profitable. For instance, the Melbourne property were bought at A$22 million and sold at A$37.5 million (RM117 million) for RM81 million capital gain. Where did the loss came from?
This blogger was ahead of mainstream media on this issue as early as 2011 (read here via VPN) and kept our eye on the ball throughout 2012-15 to pursue the truth till the issue gained public attention in 2020 and subsequently, the pursuit of self serving top management of MARA Corp in 2022.
Without going into lengthy details such as the purchase and sale prices for Ashley Hotel, Atelier Apartment, Queen Street and Exhibition Street properties, is it possible that the losses for MARA Corp are being blamed and lumped at MARA Inc?
More details will be shared later day if necessary. MARA Corp losses attributed to the pandemic of 2021-22, incompetence from the BOD down to the self serving management, and Dr Latif's lackadaisical attitude as Minister (March 2020-August 2021.
There are lots of skeleton hidden in MARA Holdings, MARA Inc and MARA Corp for NAD to uncover. The innocent were victimised and the real perpetrators got away scot free.
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