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Highlight government ‘leakages’ and take swift action

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Just why are there so many cases of corruption, wastage and abuse of public funds? Kanason Pothinker points to a failure of compliance with proper procedures and regulations.

‘Leakages’ suffered by the government – a soft way of informing the public they have been badly served by some civil servants. And the number of such civil servants has risen over the years! 

On 1 October, the Malaysian Anti-Corruption Commission chief said corruption in government procurement was at a critical level. The commission, he said, was focusing on plugging such leakages involving public funds. 

The chief secretary to the government and the head of the Public Services Department also expressed strong concern and said action would be taken against civil servants who breach procurement guidelines. There would be no compromise.  

For many years, the auditor general’s annual reports have highlighted corruption, waste and ‘leakages’ of public funds – without the government being able to reduce or prevent such cases. The auditor general’s annual reports presently run into a series, exceeding a thousand pages!

Obviously, action against the many officers responsible for the leakages could not be taken or successfully prosecuted because of difficulties in identifying the officers solely responsible and those who breached the financial guidelines of the government.  

In the suggestions now being made, officers will be required to understand and know the nature of the transactions, in specific terms, and to be fully accountable for every activity and transaction for which they lend their names and position to the transactions and documents involved. For this to be achieved, there must be documentation of all decisions made, with reasons, and this must be minuted.  

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In terms of value, from published statistics and reports of corruption, the mainline government ministries and departments have had more leakages and wastage.   

Failure of compliance

I downloaded the auditor general’s report for 2019 on the compliance audit of federal ministries and departments. The series has just started. In this 140-page report, the auditor general says in his foreword that from 2019 his department began auditing the compliance of federal state ministries and departments.

The auditor general adds that this form of audit is in line with international standards of premier audit institutions. Compliance is a key audit area for auditors to review, along with risk profiling of ministries and departments. The compliance audit covers instances of waste, extravagance, corruption, fraud and leakages and the consequences arising from any failure to comply with the laws and financial regulations.  

This report of the auditor general is a ‘must read’ for senior servants in all ministries and departments, including central agencies. In his findings and conclusions, throughout the report, we can discern the cry of the auditor general for officers to comply with all financial procedures and laws that are relevant, otherwise there would be continual losses to for the government.

The auditor general recommends that officers’ knowledge, understanding and their experience in financial management be reviewed with a view to increasing their competency levels. The aim is to “hapuskan ketidakpatuhan’’ (eradicate non-compliance) or at least to reduce it altogether.

The cry of the auditor general, the chief secretary and the MACC chief should be heard by all civil servants and the public, especially taxpayers. 

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Highlights of 2019 compliance audit report 

The conclusions of the audit of programmes, projects and activities of selected ministries and departments are detailed in the report. A close reading will reveal many distressing revelations of oversight and failures to comply with contract conditions and tax regulations. In one instance, uncollected tax on liquor amounted to RM54m. Yes, that much, according to the audit report. Penalties for delays in completion, in the delivery of naval vessels amounted to millions as well.

Since the Public Accounts Committee is not available to investigate these matters now, it would be a great service to the public if the civil service could carry out an investigation, establish the losses, and recover the millions due. 

Congratulations to the auditor general and to my younger colleagues in the department for having ventured to audit and report specifically on compliance, with risk profiling to help identify cases from the hundreds of ongoing purchases, programmes and projects. The cases audited and reported upon are but a sample!

Apparently, there are procedures in place but in all the cases audited, compliance has been found wanting (to put it politely). There have been failures to comply- and more importantly, difficulties are found in identifying the officers responsible. 

The chief secretary, the head of the Public Service Department and the MACC chief have come out strongly against corruption and the wastage of public funds by government ministries and departments.  

All we know is that our ministers are busy and are engaged fully in holding on to their positions or challenging those in power. Meanwhile, our civil servants must step forward to resolve or at least reduce the incidence of corruption, fraud and wastage. 

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Several questions arise. Why are there so many cases of corruption, fraud, wastage and abuse of public funds? Are our rules and regulations and treasury circulars and instructions incomplete to guide civil servants in the proper and acceptable way of implementing purchasing programmes and undertaking projects, including monitoring and certifying completion before making payments? I suppose so. 

We do not need consultants

Just do an online search and find out how other countries have framed their processes and procedures for procurement and implementation of programmes and projects.  

I did just that, and I found guidelines, with detailed procedural steps that can enable us to do better than the present dire situation, as reported by the auditor general. Officers responsible for procurement or disposal duties or contract monitoring and management should have been briefed on the various corruption and fraud indicators in the procurement of goods, services and works.  

I hesitate to say which of the guidelines are the most appropriate and suitable, as I am confident our civil service can make the right choices with three important civil servants to guide and support them in our fight.  

Kanason Pothinker is a former assistant auditor general of Malaysia

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