AG Report makes 16 recommendations to improve financial management of federal agencies

LET’S READ SUARA SARAWAK/ NEW SARAWAK TRIBUNE E-PAPER FOR FREE AS EARLY AS 2 AM EVERY DAY. CLICK LINK

KUALA LUMPUR: The Auditor-General’s Report (LKAN) on the financial statements of federal agencies for the year 2022 tabled in Parliament today has put forward 16 recommendations for corrective actions and improvements.

Auditor-General Datuk Wan Suraya Wan Mohd Radzi said the recommendations include that the head of federal agencies should submit financial statements for auditing according to the set period and ensure grants are used for their intended purpose within the specified time frame.

“Federal agencies should settle their loans according to the repayment schedule so as not to burden the federal government, which would incur financial costs beyond the due period.

“It is also recommended that the head of federal agencies review the establishment of subsidiary companies that are dormant, incur losses, and fail to generate satisfactory returns,” she said in a statement today.

According to Wan Suraya, as of Jan 11, 140 out of 144 financial statements of federal agencies for the year 2022 had been submitted to the Auditor-General for verification.

Of that total, she said 130 financial statements have been certified, while four federal agencies have yet to submit their financial statements for 2022 due to disruptions in the financial system network and the delayed appointment of the chairman of the board of directors.

“A total of 116 financial statements of federal agencies received the Auditor General’s Certificate with an Unmodified Opinion, while 14 others were granted a Modified Opinion, consisting of 13 Reprimanding Opinions and one Opposing Opinion,” she said.

Wan Suraya said the LKAN is also paying attention to government agencies that demonstrate weaknesses in their financial statement preparation, specifically those receiving a Modified Opinion from the Auditor General for three consecutive years from 2020.

“These agencies, among other things, do not comply with accounting standards, have poor maintenance of financial records and face financial system issues,” she said.

On the Analysis of Financial Statements of Federal Agencies for the Year 2022, Wan Suraya said that out of 130 audited financial statements, special attention should be given to 80 federal agencies recording a current surplus of RM54.677 billion and 50 federal agencies registering a current deficit amounting to RM4.570 billion.

She said 126 federal agencies have higher asset amounts compared to liabilities, while four have higher liabilities compared to assets.

“Eighty-six federal agencies received grants for management and development from the federal government totalling RM27.034 billion, while 83 have accumulated outstanding development grant balances amounting to RM25.535 billion.

“Ten federal agencies have the highest outstanding loan balances totalling RM122.388 billion. Four out of these 10 agencies have loan balances from the federal government totalling RM5.338 billion, while three out of the four federal agencies have rescheduled the repayment period for the loans,” she said.

Wan Suraya further said that 53 federal agencies have 234 subsidiary companies with a total investment value of RM56.128 billion and of these total, 212 subsidiary companies are active, while 22 are dormant.

In addition, she said that 121 subsidiary companies recorded profits while 91 subsidiary companies experienced losses, and only 66 out of the 212 active subsidiary companies have paid dividends to the federal agencies totalling RM1.910 billion in 2022.