Yayasan Selangor general manager Ilham Marzuki told the Select Committee on Competency, Accountability and Transparency (Selcat) that half a billion ringgit had gone missing from the state education foundation’s assets while Selangor was under BN rule.

“Our study shows that from 1991-2008, there were leakages of RM500 million from Yayasan Selangor,” Ilham told the committee at its public hearing today.

“If not, our assets would have been RM800 million.”

At present, he said, the foundation holds RM300 million worth of fixed assets and RM50 million in cash deposits.

He said the foundation had seen an increase in its cash holdings since he was appointed to head it in April 2010, from just RM20 million to RM50 million now.

Ilham called upon the state and Selcat to assist the foundation in auditing Yayasan Selangor for the period between 1991 and 2008, to detect the source of the leakages.

He lamented that the leakages has been reported to the Malaysian Anti-Corruption Commission (MACC) to no avail.

"There are boxes of documents on the matter in my office. Every day I go into my office, I see leakages,” he said.

Selcat chairperson Teng Chang Khim reminded Ilham that it is the foundation's responsibility to appoint independent auditors to audit its accounts if it is aware of any leakages.

He also suggested that Yayasan Selangor should utilise its internal audit unit for such tasks.

‘We made mistakes’

Ilham admitted that Yayasan Selangor had made mistakes in its expenditure, not only going against state financial guidelines but also basic prudence in spending.

“I agree that we have made mistakes... Some of the spending was also unnecessary,” he said.

Some of the mistakes included:

  • Not informing the board of trustees about proposed expenditure, including a lavish gala dinner for Yayasan Selangor’s 40th anniversary
  • Engaging in lavish expenses for activities that do not advance state educational development, like a fishing competition and Hari Raya dinner
  • Making up-front payments of nearly 90 percent or more to event managers before the event takes place
  • Awarding contracts worth more than RM50,000 without going through an open tender

Such oversights, he said, occurred as he was ill-advised during the first months of his tenure as general manager.

“I was not made aware that such practices broke state financial guidelines. Had I been advised as such, I would not have allowed these to go on.”

He also agreed with Teng’s assertion that, as the new boss, he had to follow the ‘culture’ of an organisation like Yayasan Selangor, including the questionable financial practices.

“I was new and I also wanted to win over the hearts of my staff, to get to know them.”

However, after the furore over the 40th anniversary dinner, he had instituted “drastic measures” to ensure no such leakages take place again.

“I promise that there shall be no more leakages.”

Ilham explained that he had set up committees to handle quotations, evaluations, selections, donations, technical monitoring and other aspects which involve financial management and spending.

The formation of these committees was approved by the board of trustees at its last meeting.

‘Cost ballooned on palace coordinator’s say-so’

The Selcat hearing was also told that deputy general manager for administration, Mohd Saifulruddin Sulaiman, had taken possession of over RM30,000 from a Korban event and proceeds of the fishing competition amounting to over RM20,000.

Both sums are oustanding and unaccounted for, although the foundation is in the process of demanding the return of the money and an accounting of the funds from him.

Ilham said that, initially, only RM150,000 had been budgeted for the 40th anniversary dinner.

This ballooned after consultations with the Selangor sultan’s pengelola istana (palace coordinator) who recommended proper protocols for a royal event.

“I must put this matter on record,” he said.

The dinner was later cancelled as the sultan declined to attend.

Ilham also refuted the Selangor internal audit findings that events organised by Yayasan Selangor were all direct awards, arguing that those were limited tender offers.

He maintained that documents proving this are in the possession of the MACC, and said he would try to get these back for submission to Selcat soon.

A representative of the internal audit department said no evidence had been found of the open tenders conducted.

The department suspects that the breaking-up of payments into multiple vouchers of less than RM50,000 each was an attempt to circumvent state financial guidelines that require any purchases above the amount be done through an open tender.

Teng said that, in the interim, the committee will consider the internal audit findings as true unless they have sight of the Yayasan Selangor documents.

The Selcat public hearing was stopped for the lunch break and is to resume after 2.30pm.

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