OCTOBER 10 — Pantau Kuasa is an initiative by the Institute for Democracy and Economic Affairs (IDEAS), a nonprofit research institute dedicated to promoting solutions to public policy challenges, to monitor political appointments in federal statutory bodies (FSBs) and government-linked companies (GLCs) across various governmental administrations.
In its Methodological Note, IDEAS informs the public that Pantau Kuasa is a platform that provides the public with insights into the governance of FSBs and GLCs in Malaysia, specifically regarding the appointment of directors to the board.
What is commendable of Pantau Kuasa is not only that it serves as an avenue where the public is able to get information on political appointments made in both the FSBs and GLCs, but it also informs the public what political appointments, FSBs, and GLCs are.
The public are rightly informed that the definition of FSBs is actually written in a law known as the Statutory Bodies (Accounts and Annual Reports Act) 1980 (Act 240). Section 2 of Act 240 says a statutory body means “any body corporate, irrespective of the name by which it is known, that is incorporated pursuant to the provisions of federal law and is a public authority or an agency of the Government of Malaysia but does not include a local authority and a body corporate that is incorporated under the [Companies Act 2016]”.
Article 160(2) of the Federal Constitution defines “public authority” to include “a statutory authority exercising powers vested in it by federal or State law”.
Similar to a company, FSB is a separate entity that has the power to sue and be sued in its own name, sign contracts, own, buy, and hold assets.
Simply put, FSB is created by an Act of Parliament which governs it. There are other Acts which govern FSBs, including Act 240. Two other Acts worth mentioning are the Statutory Bodies (Power to Borrow) Act 1999 (Act 596) and Statutory Bodies (Discipline and Surcharge) Act 2000 (Act 605).
Act 596 requires FSBs to obtain approval from the relevant Minister and the Minister of Finance before borrowing any money, while Act 605 outlines the code of conduct for officers of FSBs, though some FSBs are exempted from the Act.
FSBs are required to submit their annual report and financial statement to the Auditor General, which will then be presented in Parliament. This is clearly spelled out in Section 5 of Act 240, which reads as follows:
(1) Every statutory body shall keep or shall cause to be kept proper accounts and other records in respect of its operations in accordance with generally accepted accounting principles and shall cause to be prepared a statement of its accounts in respect of each financial year and shall, within six months after the end of that financial year or such extension thereof as may be granted under section 9, submit the same to the Auditor General for audit.
(2) The Auditor General shall forthwith cause the statement of accounts to be audited.
The provisions of the Audit Act 1957 (Act 62) apply to the audit of the accounts of every FSB.
So, it is not necessary for every Act that creates FSB to provide that the accounts of the FSB must be audited annually by the Auditor General (AG), as provided by Section 9A of the Legal Profession Act (Act 166).
Section 9A of Act 166 was inserted by way of amendment passed by Parliament in December last year and came into force on May 9.
Following an audit of its accounts, every FSB must submit its financial statement of accounts and the AG’s Report (if any) to the Minister together with a report of its activities.
The Minister, in turn, must present the statement of accounts, the Auditor General’s Report (if any), and the report of activities to each House of Parliament. This is spelled out in Section 8 of Act 240.
The law therefore allows each House to debate and approve the AG’s Report as the case was when the Dewan Rakyat on July 24 approved the Auditor-General’s Report (LKAN) 2/2025 on the Activities of Ministries/Departments/Statutory Bodies/Federal Government Companies, which contained matters raised from audits on five programmes, activities, and projects across seven ministries.
The onus is on the relevant Minister to explain the absence of audited financial statements of accounts and report of activities of any FSB to Parliament.
The Minister is accountable to Parliament.
*This is the personal opinion of the writer or publication and does not necessarily represent the views of Malay Mail.
