MySejahtera report: CSR reason used to secure govt project - PAC

The Public Accounts Committee (PAC) has urged the government to establish guidelines on being the beneficiary of corporate social responsibility (CSR) initiatives.

This was after the PAC found that a CSR initiative was used to secure a government contract without going through proper public procurement processes.

“All offers through CSR are welcome. However, the terms related to the CSR offer should be clearly stated and should not be used as an alternative way for direct negotiations. Guidelines should be in place in the CSR offering,” read a report by the PAC.

KPISoft Sdn Bhd, the developer of the MySejahtera application, allowed the government one year to use the app for free and then started to charge the government from April 2021 onward.

KPISoft has since been renamed Entomo Sdn Bhd.

“The appointment of KPISoft Sdn Bhd as the MySejahtera application developer in March 2020 was not organised and not in line with the public procurement procedure.

“There were no minutes or supporting documents on the appointment. The only document is the non-disclosure agreement (NDA) signed between the National Security Council (on behalf of the government) and KPISoft,” the report read.

According to excerpts from the PAC report, the NDA was inked on April 1, 2020, and set the terms on the running of the app by way of CSR.

According to the PAC report, the government was confused in terms of KPISoft’s appointment, the concept of CSR, and the ownership of MySejahtera.

The PAC also found no document showing the one-year CSR time frame between April 1, 2020 and March 31, 2021 set by KPISoft.

“Therefore, the government should review the propriety of awarding the contract by way of direct negotiation.

“The Malaysian Administrative Modernisation and Management Planning Unit (Mampu) should take over the entire application,” the PAC suggested.

It also concluded that the application is owned by MySJ Sdn Bhd, a company set up in September 2020 to run the platform despite Health Minister Khairy Jamaluddin claiming the government owns it.

“The government has yet to register the intellectual property (IP) for the MySejahtera application at Intellectual Property Corporation of Malaysia (MyIPO) as of April 2022,” read the PAC report.

“The government should ensure full government ownership in the app in order to protect personal data and ensure that the database is not misused by any party.”

High price contradicts CSR concept

MySejahtera was widely used as a national contract tracing application to prevent the spread of Covid-19.

MySJ Sdn Bhd came into the picture as the National Security Council (NSC) proposed they be given a contract for two years via direct negotiation, instead of Entomo.

The PAC report noted that the MySejahtera procurement came with a hefty price tag as the government set a ceiling price of RM196 million for two years.

“This amount is high and it contradicts the concept of CSR,” read the report.

The ceiling price was set after KPISoft gave two options as a way forward for the app in November 2020, five months before the CSR was to expire in April 2021.

KPISoft proposed to commercialise the MySejahtera application without imposing any cost to the government. It also proposed that the government pay a service fee of RM138 million annually to the company.

Interest in the government’s handling of MySejahtera was renewed following the PAC’s investigation of the government's Covid-19 procurement programme in March.

During that investigation, civil servants who testified revealed that the government plans to start paying MySJ Sdn Bhd to run the MySejahtera application.

This prompted the PAC to probe the government’s procurement of the MySejahtera application.

Khairy and Finance Minister Tengku Zafrul Abdul Aziz, were among those called as witnesses to explain relevant issues relating to the app.

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