GEORGE TOWN, July 31 — The standard operating procedure (SOP) of Invest-In-Penang Berhad (IPB) in its overseas mission was found incomplete, not updated and not adhering to the conventional format, according to the Auditor-General’s Report 2016 Series 1.

According to the report, the absence of a complete and updated SOP caused the mission to implement and spend before obtaining the approval of the chairman of the Board of Directors.

The report also mentioned the expenditure of IPB rose from RM2.55 million in 2013 to RM3.3 million in 2014 due to overseas missions, emoluments, exhibitions and seminars.

In this regard, IPB which is fully owned by Penang’s State Secretary Incorporated (SSI) and tasked with promoting investments to the state, has not reviewed its financial SOP since August 2010.

"SOP is the main document to explain every operation carried out by the company and its financial SOP which was also not reviewed resulted in weaknesses in internal control on payment management,” said the audit report which was tabled in Parliament today.

The report also said IPB did not set up an Audit Committee nor an Internal Audit and as such there was no internal audit carried out from 2013 to 2016.

Therefore, the auditors recommended IPB set up a more effective internal financial management control by reviewing the existing SOP regularly.

IPB was also urged to adopt the best practice of the Malaysian Code of Corporate Governance 2012 such as creating an Audit Committee to assist the Board of Directors to monitor the proceedings of the company more effectively.

On other matters, an audit also found loss of revenue from the billboard temporary occupation licence (TOL) for the Northeast District Office and Land Office (PDTDTL) due to falsified receipts for TOL and processing fees amounting RM35,500.

"PDTDTL confirmed that there were 16 fake receipts and two cases of falsified land tax receipts and one case of fake receipt from another company,” it said.

The report said the falsification of receipts occurred as there was no coordination between the Penang City Council (MBPP) and the Land Office in verifying the issuance of payment receipts as well as negligence in checking information in the application form by MBPP.

Besides that, auditors also found billboard TOLs were also approved on reserve land of federal roads in 130 locations and as a result the state government was collecting revenue amounting to RM0.15 million belonging to the federal government.

"The matter arose because the Land Report for TOL did not provide details and confirmation of the status of the road concerned,” the report said.

According to the report, the authority to approve applications to build advertisement structure on federal road reserve throughout the country rested with the Works Minister.

Meanwhile PDTDTL in its reply to the National Audit Department on March 13 said the confusion occurred as the reserve land of federal roads was only gazetted based on the distance without any special details on the width of the road.

PDTDTL also informed the audit department that it would obtain the approval of state authorities so that applications on federal road reserve would not be processed in future. — Bernama