KUALA LUMPUR, Oct 29 — City Hall (DBKL) will finally set up an internal audit unit and automated IT system after coming under fire for uncollected advertising revenue totalling RM138.35 million up to last year, the Public Accounts Committee (PAC) today.
The committee – which is probing DBKL over the ineffective management of revenue from advertisement licences and billboards – said that the new systems will be ready by next year.
After a two-hour long meeting with the City Hall’s top officials, PAC chair Datuk Nur Jazlan Mohamed said that the local authorities were not able to collect the fees as a result of the loopholes in a semi-automated system.
“We were shocked that DBKL didn’t have an internal audit department... but City Hall is working with the National Audit Department to set up the mechanism,” Jazlan told reporters.
“They are improving their IT infrastructure to make sure they cover end-to-end from issuance of licenses, supervision and collection,” he said.
The Federal Territories and Urban Well-being Ministry was criticised in the Auditor-General’s 2013 Report after the auditors discovered that DBKL was not collecting RM138.35 million in the form of unpaid premise signage advertisement fees (RM128.14 million) and billboard licence fees (RM10.21 million).
The AG report also noted that the e-licence application facility available was not user-friendly, resulting in applications being approved without having to comply with the stipulated conditions.
The Pulai BN MP said advertising revenue had been collected manually and the existing system was not linked to DBKL’s finance unit to enable verification.
Due to the weak system, Jazlan pointed out that DBKL has been losing out on advertising revenue, which has been decreasing over the years.
Between 2010 and May 2013, collection from the issuance of advertisement or billboard licence was RM52.09 million or 83 per cent, compared to the estimated RM62.73 million.
Without an improved system in place, it was also not possible to detect any wrongdoings, added Jazlan.
“Now that they updating their systems, hopefully we will be able to check the audit trail... in order to make it easier to identify wrongdoings, if any,” he said.