The Kedah government-owned Insaniah University College (Kuin) had splurged RM6.72 million to renovate its Stargate temporary campus without approval from its board of directors, according to the third series of the Auditor-General's Report 2014.

The sum has also yet to be paid, although the renovations have already been completed by another state-owned company in 2012.

According to the report, Kuin had rented 32 shophouses at Bandar Stargate, Alor Setar between April 28, 2011 and May 25, 2013 to house its Muamalat (Islamic Finance) Faculty, and its Hospitality and Halal Services Faculty until its new campus in Kuala Ketil is completed.

They were rented from three landlords at the cost of RM75,600 per month.

The renovations converted the shophouses into hostel blocks and lecture rooms, but when the Kuala Ketil campus was complete, the temporary campus was completely vacated and RM810,000 was spent restoring it to its original condition as stipulated in the rental agreement.

“ The total expenditure of RM9.34 million for the rental, renovation, and clean-up of the Stargate temporary campus did not bring value for money to Kuin because of the short period of use,” the audit report said.

Financial difficulties

It said the renovation works were done based on an interim letter of acceptance, without any contract between the management Insaniah Holdings Sdn Bhd, Kuin, and the contractor, and without referring it to the board of directors.

In response, Kuin said the renovation was done by its previous management and promised it will not happen again.

The auditor-general's report also pointed out that Kuin had permission from the landlords to modify the buildings, but on condition that it is restored to its original state within 14 days before handing it back to the owners.

However, 27 shoplots were handed over late without clean-up due to financial difficulties faced by Kuin.

In addition, it said Kuin had accepted an offer to restore the buildings according to technical specifications and the market rate of the job.

There is also no agreement to protect Kuin's interests in event of a dispute, and the contractor appointed was found not to have been selected through open tender.

In response, Kuin said its new management had obtained an estimate in excess of RM1 million for the restoration works.

However, it said the landlord has offered to appoint his own contractor to perform the restoration works at a lower cost,, and allow Kuin to pay the RM810,000 in 24-month instalments.

Meanwhile, the auditor-general's report also highlighted Kuin's poor financial performance. Although it had managed to turn a profit of RM1.06 million last year, its accumulated losses amounted to RM11.58 million.

The profit last year did not come from Kuin's operations, but from various other sources amounting to RM3.32 million.

Kuin's student intake between 2012 and 2014 had also consistently fell short of target, averaging at 35.9 percent of its target.

Of the students that it managed to enrol, Kuin was also found to be wanting when it comes to collecting fees from them, with arrears amounting to RM7.25 million as of the end of 2013.

The bulk of it coming from diploma students who have finished their studies (RM1.55 million) and students who have dropped out (RM1.3 million).

Kuin responded to the findings saying that it is reviewing the arrears, saying that some of its data on the matter cannot be verified.

It is also seeking legal action against students with arrears and have left the university college, it said.