KUALA LUMPUR, July 31 — The procurement of student residences from a private company has resulted in significant losses for University Malaysia Kelantan’s (UMK) business wing, according to the latest Auditor-General’s (A-G) report.
The first series of the 2016 report, released today stated that UMK Business Ventures Sdn Bhd (UMKBV), a wholly-owned company of the university, had been tasked with finding ways to generate income by providing services in the field of research by managing events,seminars, courses, workshops and any other businesses.
“The procurement of student residences from a private company resulted in losses for UMKBV. This was because only a small portion of the rental payment (RM3.85 million) had been considered in the purchase price compared to the total rental paid amounting to RM30.53 million,” the report read.
It said that monthly rental payments were used as part payment for the residences, but after the building was eventually sold to UMKBV, the initial owner did not refund the rental deposit.
“...the building was sold to UMKBV but the rental deposit amounting to RM2.49 million has yet to be refunded by the initial owner.”
The audit report also said that UMK incurred a loss of an additional RM117,000 due to an “unoccupied” rental office in Wisma TCH in Kota Baru.
“In order to improve the performance of the company, it is recommended that UMKBV draws up a long term strategic plan focusing on the company’s incorporation objective other than rental of student residences.
“This is to ensure UMKBV does not rely heavily on the rental activity to generate income,” the A-G report stated in its recommendations.