AUDIT REPORT | The Audit Department has reprimanded three Kelantan government agencies.
They are the state secretary office which manages the Kelantan Affordable Home Programme (RMMK), state Social Welfare Department (SWD) (Al-Musa’adah welfare assistance scheme or SBA Al-Musa’adah) and the Perbadanan Menteri Besar Kelantan (PMBK Sawit Sdn Bhd).
The 2018 Auditor-General’s Report Series 1 published today, found that the RMMK has failed to meet its objectives of providing and offering 5,000 units of RMMK housing between 2014 and 2018.
“In terms of achievement of physical output and outcome, only 160 units (3.2 percent) of the RMMK houses are completed and on offer,” the report said.
Among the weaknesses found were the RMMK allocation was not optimally spent, the terms in its policy, namely, the requirements for quota and levy for housing/mixed projects were also not included as part of the terms of approval of planning permission, while restriction or moratorium was not duly imposed, and the completed units could not be sold without the Certificate of Completion and Compliance (CCC).
Thus, the auditor-general submitted several recommendations, including the implementation of the RMMK’s quota for private projects so that it could achieve its output and outcome targets; revaluation of its effectiveness; and the project’s set target to be carried out to ensure that it could be achieved.
“An efficient management of the RMMK is also needed to ensure its allocation will be optimally used so that more units would be built, while the implementing agencies must be given enough exposure on the quota and levy and the moratorium requirements need to be carried out as stipulated in the policy,” the report said.
Meanwhile, the auditor-general also reprimanded the state SWD on the management of the SBA Al-Musa’adah scheme that had yet to reach its optimum level of efficiency due to the delay in termination of payment to deceased beneficiaries despite its achievement in assisting eligible individuals to get their basic needs.
The department has successfully distributed aid to 7,459 recipients in 2016, 7,641 people (2017) and 7,911 people (2018). The allocation has reached 82.2 percent to 101.7 percent of the target set.
However, the issue that should be addressed by the department involved 167 (45.6 percent) cases of the SBA Al-Musa’adah late termination of payment of up to seven months from the date of death resulting in a surplus of RM26,640.
“In addition, the review also found 50 beneficiaries have been switched to new schemes, with 22 individuals (44 percent) being granted approval of new schemes and payments made once SBA Al-Musa'adah was terminated. However, 12 beneficiaries (24 percent ) did not receive approval to switch to the new scheme immediately after the termination of SBA Al-Musa'adah.
“Meanwhile, 16 beneficiaries (32 percent) have yet to be assisted with a new scheme despite the fact that their previous scheme has been terminated, resulting in 28 (56 percent) people receiving no assistance at all between the period of one month to 35 months,” the report said.
To enable corrective actions and improvements, the auditor-general recommended several steps including better cooperation between departments and agencies in providing programmes or capital injections to assist beneficiaries.
“For SBA Al-Musa’adah beneficiaries, who have been identified with the potential to be independent, programmes or capital injections should be allocated to help them generate income so that they will be able to be independent,” the report said.
The auditor-general also reprimanded the PMBK Sawit Sdn Bhd's (PMBKSSB) poor governance practices as there was a need for improvement on the roles and functions of the board, company secretary, general manager, audit committee and internal audit, the corporate plan / strategic plan, key performance index (KPI) and standard operating procedures (SOPs).
“In addition, the PMBKSSB’s financial position is also weak as it has suffered losses since 2012, with a net loss of RM5.66 million in 2015, RM3.24 million (2016) and RM5.52 million (2017) and until Dec 31, 2017, the company has incurred losses amounting to RM21.30 million.
Hence, the auditor-general recommended that PMBKSSB improves the company’s governance with best practices by defining the roles and responsibilities of those involved.
“This includes that the board’s decisions are being monitored and placed under the implementation period so that they can be carried out within the prescribed period, reevaluate the company's position and to decide on the company’s direction by taking into account future profit-taking capabilities due to the ‘going concern’ risks,” said the report.