A committee under the Finance Ministry approved payment of more than RM290,000 for two development projects that do not exist, the 2008 Auditor-General's Report has revealed.

Located in Taman Danau Desa (Seputeh) and Kampung Pasir (Segambut Luar) in Kuala Lumpur, these had been certified as completed. However, an audit check has found otherwise.

The report traced the expenditure to the Federal Territory State Development Committee (FTSDA), which falls under the jurisdiction of the Finance Ministry.

NONE It said RM270,116 was paid in full for the cost of an indoor court and a recreation centre in Taman Danau Desa.

Another RM22,676 was paid for ‘road works' in Kampung Pasir, bringing the total payment to RM292,792.

The FTSDA also approved renovations to, and upgrading of, Surau Al-Rahman in Precinct 16, Putrajaya, at a cost of RM50,000.

The allocation was then diverted to repainting the King George V Perak Jubilee Home in Sungai Besi, involving a hall and a hostel.

"In order to implement this project, an offer letter was issued to the contractors in October 2006 [...] and they were instructed to complete the work within four weeks," said the report.

However, the cost of the project ballooned to RM172,258, to cover the cost of installing floor tiles at the hostel and an office.

"But when the audit team visited the site, it found that the floor tiles were not installed. We could not figure out the cost because the job specifications indicated that the work on the hostel and the office was done separately," the report explained.

Investigations recommended

In another instance, the FTSDA paid RM44,698 in August 2008 after certifying the completion of renovations to a community centre in Persiaran Klang, Bandar Tun Razak. Again, it was found that the work had not been carried out.

In view of this, the report urged FTSDA to investigate each of the payments made to determine if corruption is involved.

It also made it clear that payment to contractors should only be made after the work is certified complete in accordance with the project specifications. The certification must be done by an authorised technician.

The report went on to recommend an investigation into the FTSDA itself, with appropriate action to be taken if fraudulent practices are proven against it.

Meanwhile, the Malaysian Anti-Corruption Commission (MACC) is studying the Auditor-General's Report to see if there are elements of corruption, misconduct and abuse of power in the management of public fund.

In a statement, the MACC said it would proceed with the necessary actions should it find any irregularity.

The Auditor-General's Report, tabled in Parliament on Monday, found numerous weaknesses including delays, irregularities in procurement process and supply of equipment at illogically high prices.