Ex-auditor-general defends Tabung Haji audit, says no evidence of theft found

Former auditor-general Madinah Mohamad has pushed back against the Tabung Haji RCI’s criticism of the National Audit Department, maintaining that its audit of the pilgrimage fund followed the required standards and mandate.

Free Malaysia Today reported that Madinah, who served as auditor-general from 2017 to 2019, also said she and her team found “no evidence of theft or misappropriation” during their audit of the pilgrimage fund.

“If my team and I had found such evidence, I would have raised it and referred the matter to the relevant authorities.

“My mandate was very clear,” she reportedly said today as a speaker at a National Musyawarah Forum on Tabung Haji in Kuala Lumpur.

“The audit was conducted according to standards and based on audit evidence before any financial statement or certificate was issued.

“We followed the facts and evidence while remaining grounded in reality,” Madinah was quoted as saying.

Governance failures, interference, ‘creative accounting’

Following the RCI report’s release on July 29, the cabinet ordered investigations arising from its findings to resume immediately.

The MACC subsequently formed a special task force to examine possible corruption, abuse of power, document falsification, and money laundering offences, leading to several arrests and remand applications.

Police have also opened five investigation papers and, as of Aug 21, recorded statements from 127 people over Tabung Haji-related cases, including matters raised by the RCI.

The RCI into Tabung Haji’s management and operations between 2014 and 2020 identified governance failures, political interference, and questionable accounting practices as among the factors behind the fund’s financial crisis.

READ MORE: 'Sakau' or not? Five key takeaways from Tabung Haji RCI

It also criticised the National Audit Department for not conducting stricter audits of Tabung Haji’s financial statements between 2014 and 2017.

Among its findings, the commission said the fund should have recorded a net loss of RM1.4 billion in 2017 if the applicable Malaysian Financial Reporting Standards had been fully applied.

Instead, it reported a RM3.4 billion profit for the year - a difference of nearly RM4.8 billion.

‘Apples and oranges’

Madinah, however, defended the department against suggestions that the RM4.8 billion discrepancy showed that its audit had failed.

She reportedly said the department’s audit and a subsequent PricewaterhouseCoopers (PwC) review had different purposes, terms of reference, and methodologies, making a direct comparison akin to comparing “apples and oranges”.

“The differences in methodology and approach are what led to the two reports producing different figures,” she said, according to FMT.

Madinah further said the discrepancy mainly involved the recognition and valuation of asset impairments and investments, including those involving Tabung Haji subsidiaries and associate companies.

She said the National Audit Department conducted its audit under the Audit Act 1957 and Tabung Haji Act to determine whether the fund’s financial statements gave a true and fair view under the accounting standards in force at the time.

PwC, meanwhile, was commissioned to conduct a broader review of Tabung Haji’s financial position under different terms of reference, she said.

Hibah paid despite losses

PwC’s 2017 review, tabled in Parliament in December 2018, found that the fund had effectively used depositors’ savings to pay hibah (dividends).

It cited transactions involving the sale and repurchase of Bank Islam shares, as well as dividends declared by Tabung Haji subsidiaries but not fully paid, which boosted its reported profits.

The findings came amid revelations that the fund had paid hibah despite its liabilities exceeding its assets, which is prohibited under the Tabung Haji Act.

During the special Dewan Rakyat sitting on Aug 11 to debate the commission’s report, Muar MP Syed Saddiq Syed Abdul Rahman questioned why Madinah’s testimony was not included, given that she was auditor-general during the period under scrutiny.

Madinah subsequently said she had turned up at the Islamic Development Department on the scheduled day during the RCI proceedings but was not called to give a statement.

Also present at the forum today were Deputy Prime Minister Ahmad Zahid Hamidi, Plantation and Commodities Minister Noraini Ahmad, Majlis Amanah Rakyat chairperson Asyraf Wajdi Dusuki, and PAS secretary-general Takiyuddin Hassan.

‘PAC should probe Tabung Haji’

Bernama reported that Zahid has backed a proposal for the Public Accounts Committee (PAC) to set up a special body to investigate Tabung Haji’s management from 2017 to the present.

“In my view, this is a recommendation that should be followed so that there are no accusations of ‘embezzlement’, while the certificate issued by the National Audit Department, which clearly shows that a clean certificate was issued, indicates that the audit conducted on Tabung Haji was based on its governing Act.

“The Tabung Haji Act 1995 states that the National Audit Department is responsible for auditing it.

“This is what the PAC should look into so that the facts can correct public perceptions and reflect the reality that the public wants to know,” he said, adding that the proposal was informally raised by several MPs who also attended the forum.

Separately, FMT quoted PAC chairperson Mas Ermieyati Samsudin as saying that the proposal will be discussed with all members after a pre-scheduled committee meeting in Parliament tomorrow.

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