PETALING JAYA, June 17 — Punitive measures will be more effective stopping financial losses resulting from civil servant negligence or fraud in public procurement, Tan Sri Ambrin Buang said today.
The former auditor-general (A-G) said that under his watch, the National Audit Department has repeatedly highlighted many weaknesses within government agencies that saw wastage and leakages in projects for the public’s benefit.
“To correct the ‘tidak apa’ perception, there must be effective follow-up on the audit report not only in terms of corrective actions to adhere to rules and procedures but also as a deterrent to others in terms of punitive action against government officers, whether they are still in service or retired but have been found to conduct fraud or behave negligently.
‘It is important in enhancing governance in public sector including government-linked companies,” he said in his speech at the Malaysian Economic Convention 2019 here.
He lamented the loss of a “good move to empower the National Audit Department to directly take follow up action on the A-G report”, saying the government auditors were in the best position to conduct independent checks because they were familiar with the procedures and changes in activities.
“The result in punitive action will be encouraging indeed,” he said.
Ambrin voiced his bitter disappointment that throughout his career auditing the government, the audit department’s calls and efforts to improve the delivery system and correct bureaucratic mistakes practically went unheeded.
He recalled that when financial scandals such as PKFZ and the National Feedlot Corporation (NFC) first came up, he thought it would be the worst case of governance in Malaysian history, until the theft of sovereign investment fund 1Malaysia Development Berhad (1MDB).
“If you asked how many can recall what happened in PKFZ, the Youth and Sports Ministry scandal, the NFC and the Sabah Water Department scandal... not many can recall that. I thought these would be the ultimate worst case governance scenario.
“Then 1MDB came up and it was the largest financial scandal in the world which made Malaysia globally infamous,” he said.
But he also said the government should not swing to the other extreme and use punishment to stop its financial bleed in procurements.
He advised for a two-pronged approach, emphasising the need to follow rules and guidelines to check fraud and corrupt practices.
He said government officers should not simply comply to the demands of their superiors in order to avoid repercussions as they could end up in trouble the moment their actions are audited.
Ambrin then advised the civil servants in charge of procurement to also conduct proper due diligence on companies before awarding contracts even if it has called for an open tender.
“Never mind contractors being appointed via direct negotiation or selected negotiation but the question is whether or not due diligence was done. If proper due diligence was done, they would have checked all claims provided by the bidders.
“This includes the financial strength of a company which should extend to a few years instead of just one year. Otherwise you might award a project to a company with financial problems. You should also cross check to see if some companies are owned by the same individual.
“They should also conduct price comparison. Today, you can do it on the internet. And the state’s legal adviser should also be there every step of the way while central agencies like the Treasury and the Attorney General’s Chambers be sought out,” said Ambrin.