KUALA LUMPUR, Nov 6 — As much as RM66.87 million in dividends from government investments was placed in its development fund instead of the consolidated revenue account, the Auditor-General (A-G) said today.
The A-G said this was not in line with normal practices and differed to how the 2018 dividends were accounted for.
“Our audit analysis found RM66.87 million worth of dividends from seven companies was accounted into the Kumpulan Wang Pembangunan [development funds].
“This method of accounting is not in line with the Treasury circular. It is also not consistent with the accounting methods in 2018 where these monies were accounted for in the government’s consolidated revenue account,” the A-G said in the Report on the Federal Government’s Financial Statement for 2019 released publicly today.
The report said Parliament’s Public Accounts Committee (PAC) had responded to this issue on July 14 when the matter was raised to its attention.
Citing Section 2(d) of the Development Funds Act 1966, the PAC asserted that the law allowed dividends to be allocated into the development fund, noting the provision said “moneys received from the sale or realisation of any asset paid for out of the Fund”.
However, the A-G disputed the PAC argument.
In its report today, the A-G said receipts of dividends are not the same as selling shares in a company, adding that the money should be put into the consolidated revenue account.
The federal government’s source of income comes from taxes, non-tax revenue, non-revenue receipts and receipts from the Federal Territories.
In 2019, the government earned RM264.4 billion, an increase of RM31.5 billion or 13.5 per cent compared to 2018’s total of RM232.9 billion.
The government’s main source of income came from taxes totalling RM180.6 billion while non-revenue taxes consisting of interest from investments totalled RM60.1 billion.
This was more than 2018’s RM31.9 billion and the reason for this was due to a RM54 billion dividend from Petronas.
From this total RM30 billion were special dividends specifically for the repayment of income taxes.