NS deals led to RM110m loss

National Service shirkers and a very “rigid” contract have caused the Government losses of up to RM110.1mil from 2004 to last year, the 2007 Auditor-General’s report said.

Over the four years, the audit found that 63,417 people failed to attend the programme for various reasons, which led to the Government having to fork out the money to camp operators due to the way the contract was set out.

The contract spelt out that the Government would pay rent for the use of equipment and facilities for between 690 and 890 trainees for 2004 and between 300 and 400 trainees for 2005 and beyond.

The fee, per trainee, worked out to RM30 in the peninsula and RM41 in Sabah and Sarawak for 2004. In 2005, it cost RM25 in peninsula and RM34.30 in Sabah and Sarawak.

This meant that the Government had to pay for the stated number of trainees in the contract even if the number of trainees turning up was less or more than the figure stipulated in the agreement.

“Every year, between 16% and 23% of those called up to join the programme did not turn up. The ministry must review the contract conditions regarding how many trainees are allocated to each camp,” the report said.

It added that the ministry should also have a backup name list as there had to be a stop to the losses due to people not turning up for training.

“The NS Training Department also has to double-check its name list with the relevant authorities before putting out the roll call,” it said.

Among the reasons those called up did not attend were: a change in address, still studying, sole bread-winners, disabled, did not receive notices, died, overseas, in the army, health problems or have attended NS before.

In its reply, the ministry said it was in the midst of reviewing the contracts, adding that the department would be increasing the number of trainees next year to 140,000 to make up for any shortfall.

The audit also found that RM57mil in arrears had yet to be collected from camp operators for advances they had taken to construct the camps.

The audit also checked on certain camps from various angles such as the suitability of its location, cleanliness, food quality and quality of equipment supplied.

It found that the Beringin Beach camp in Langkawi was unsuitable because high tides often flooded dormitories and left a classroom unusable.

For the Wawasan camp in Sabah, camp operators told the audit team that it was difficult to obtain fresh fish to cook for the trainees but the audit team found it otherwise at the Kota Kinabalu market.

The audit also found that T-shirts, track pants, baseball caps and sports shoes supplied under contracts worth RM41.12mil were of low quality.

Source: The Star

Auditor-General's Report: Billions owed

CAN'T pay off your loan? Welcome to the club.

As of last year, state governments, companies, statutory bodies and others owed the Federal Government over RM10 billion.The biggest debtors were the companies, which together owed close to RM4 billion.

Perwaja Terengganu Sdn Bhd owed more than RM3 billion, followed by Perbadanan Aset Keretapi (formerly Keretapi Tanah Melayu) which owed RM600 million.

The second biggest debtors were the state governments with a total debt of RM3.5 billion. Johor and Selangor topped the list with debts close to RM700 million each.

The third group was statutory bodies, with a RM2.4 billion debt.

Fifty-seven ministries and departments are owed RM14 billion, with taxpayers owing the Inland Revenue Board RM8 billion.

Source: NST

Auditor-General's Report: How was the X-ray contract awarded?

THE Health Ministry's purchase of three X-ray machines at a cost of RM33 million has raised questions on how the contract was awarded.

Through direct negotiation with the Health Ministry, Syarikat Glotel Sdn Bhd was given the contract to supply two Positron Emission Tomography Computed Tomography Scan (PET CT Scan) and a Cyclotron machine, and to build the buildings to house these machines at Penang Hospital and Putrajaya Hospital.

The auditor-general found that despite the fact that Glotel was not registered with the Contractor Service Centre, it still got the contract.

In addition, Syarikat Allied Physics Sdn Bhd, the company sub-contracted by Glotel to certify the quality and safety of the PET CT Scan, was not qualified or licensed to handle radioactive material and X-ray equipment, as required under Section 13(2) of the Atomic Energy Licensing Act.

As a condition of the contract, Glotel was to have provided training to ministry officers on the use of the PET CT Scan and Cyclotron machines, as well as assist in obtaining a Good Manufacturing Practice (GMP) status.

This would have enabled the government to register the production of FlueroDeoxiglucose (FDG) with the National Pharmaceutical Control Bureau.

However, this did not happen, as the syllabus prepared by Glotel was not done in consultation with the government, making the training unsuitable for GMP qualification.

Failure in getting GMP status has resulted in FDG, which is injected into the patient before a scan, not being registered.

Even more puzzling is how Glotel managed to get the contract to handle and transport the radioactive FDG.

Under the Radiation Protection (Licensing) Regulation 1986, only a company that has Class A and Class D licences could handle and transport radioactive FDG. Of the three companies that pitched a tender, only one -- Syarikat Intan Sejati Sdn Bhd -- had Class A and Class D licences.

In April 2005, both Intan Sejati and Glotel's tender were proffered by the deputy director-general of Health (medical) to the Health Ministry's Privatisation and Procurement Division secretary.

But it was Glotel that the deputy director-general recommended for the contract to supply FDG, even though Glotel only had a Class C licence.

The endorsement was made based on Glotel's offer to provide insurance for the FDG in case the PET CT Scan was broken and the FDG's short shelf-life expired from lack of use.

However, the auditor-general found that, in addition to not adhering to the Radiation Protection (Licensing) Regulations, this arrangement cost the government RM1,008 more per shipment compared to how much Intan Sejati would have charged.

Audit visits to both hospitals between January and February found that 40 components of the PET CT Scan and Cyclotron machines, valued at RM658,800, had yet to be used. Among the reasons for this was that the components had either been purchased too soon, or were unsuitable for use.

To all these queries, the Health Ministry had no reply.

Source: NST

Auditor-General's Report: RM3.19 million for only nine studs

OVER RM3 million was spent, but the Veterinary Services Department only got nine fit animals for its cattle stud farm project or the "Pengeluaran Bibit dan Baka Ternakan Lembu".

In 2006, the department placed an order amounting to RM6.2 million with Kembar Teguh for the supply of 2,500 cattle from China between July 2006 and July last year.

But until February last year, the supplier had only sent the department 1,812 cattle although the department had already paid it a lump sum of RM3.19 million.

The auditor-general found that only nine out of the 1,812 cattle delivered fulfilled the department's specifications.

The specifications were that the animals should not be more than 24 months old, should not weigh less than 250kg, should have no deformities and the colour of its hide should either be yellowish brown or black brown.

Seventy of the cattle had brucellosis and had to be put down. Another 451 could not pass any of the criteria set and had to be returned to the supplier.

Athough the remaining 1,282 cattle could only pass two of the four criteria the department had set, the animals were accepted.

The auditor-general questioned the wisdom of the department's decision to accept the 1,282 animals and said it should only have paid for the nine animals that met its specifications.

The audit also found that the supplier failed to quarantine the cattle for a minimum of 30 days -- during which it would feed and care for them at its own farm -- when they were brought into the country.

Instead, they were sent to the Animal Farming Centre in Jelai/Gemas and the centre was forced to bear the cost of feeding and caring for the cattle.

The department, however, said that the cattle were sent to Jelai/Gemas because the centre was going to be gazetted as a temporary quarantine shelter.

"The department has the right to gazette any location it deemed fit according to the 1953 Animals Act."

It also denied that it had to bear the costs of feeding and caring for the cattle during quarantine.

Of the remaining cattle, the department said it had no intention of getting them from Kembar Teguh because of "various difficulties" faced by both supplier and the department when dealing with the authorities in China.

Until December last year, the department operated six stud farms, with 6,300 animals. Between 2005 and last year, RM18.85 million was spent on the farms, which were targeted to produce 17,351 cattle.

Source: NST

Corruption also afflicts the young

August 31, 2008; NST Online

Corruption in this country is not only restricted to those in power or individuals holding high positions.

In fact, it even involves students from public and private institutions of higher learning and those who are just starting their careers.

Anti-Corruption Agency (ACA) deputy director-general II Datuk Zakaria Jaafar said the latest statistics revealed that about 30 per cent of students from public and private colleges and universities, as well as young executives in their 20s and 30s, were involved in some form of corrupt practice.

He said this revealed that efforts to weed out corruption in the country have a long way to go and must begin with young people, especially among students.

"Though it is the ACA's responsibility to battle corruption, we cannot do it alone as it is spread over such a wide range of individuals.

"Therefore, we appeal to the public to work closely with the ACA and provide us any information which may assist us in our efforts," he said after presenting prizes to winners of a debate on corruption at Sekolah Datuk Abdul Razak in Senawang near here yesterday.

Source: NST

Auditor-General Report 2008 - $10mil Teaching equipment missing

RM10m worth of teaching equipment 'missing'
Rahmah Ghazali; August 30, 2008; Malaysiakini

Teaching equipment for Science and Mathematic in English worth RM9.56 million has gone missing between 2005 and 2007 in 812 schools nationwide.
MCPX

According to the Auditor-General’s Report, the government had approved an allocation of RM4.99 million for the teaching of Science and Mathematics in English from 2002 and 2008.

Of the amount, the government paid RM2.21 million for the purchase of information and computer technology (ICT) equipment from 2002 and 2007.

Apart from the missing equipment, the report also detected some irregularities where the installation works of the equipment were not complete but testing and installation certificates had been signed by school authorities.

The report further revealed that the testing and installation certificates were still signed by the school authorities despite sloppy installation and poor condition of the equipment upon arrival.

The equipment, based on the report, was also not maintained in compliance with standards set out in the 2007 Treasury circulars.

The delayed arrival of the equipment to the schools was also under scrutiny. Other than that, the installation of the equipment was also not done properly.

A blow to Education Ministry?

The report also highlighted that there was no punitive action taken against the main supplier for the delay so far.

Excess facilities were also detected in the report where teaching equipment such as laptops outnumbering the teachers hired to teach Science and Mathematics in English.

Teaching Science and Maths in English was the brainchild of former prime minister Dr Mahathir Mohamad to improve students proficiency in the language.

These findings in the report could be seen as another blow for the Education Ministry as many vernacular schools have been protesting against instruction in the medium.

However, an alternative formula was reached for vernacular Chinese schools as a compromise after strong protests from the community.

Source: Malaysiakini

Auditor-General Report 2008 - CTRM investment failure

Auditor-General's Report:: Half billion spent, RM25m returns
August 31, 2008, NST Online

OVER half a billion ringgit was spent, but all the Malaysian government got in return from its investment in Columbia Aircraft Manufacturing Corporation in the United States was RM25 million.

From 1994 until September last year, the government and Composites Technology Research Malaysia Sdn Bhd (CTRM) poured RM537.04 million into Columbia Aircraft in the form of investments and loans.

(The government, through the Finance Ministry, is the biggest shareholder in CTRM, owning about 90 per cent of its shares. Petronas is the other shareholder.)

However, the government's aim of reaping profits from its investments in the aircraft manufacturing company failed because of the company's weak management and unscrupulous spending by its senior officers.

The Auditor-General's report said the company's board of directors failed to expedite the manufacture of aircraft while the Minister of Finance Incorporated did not monitor the company's activities.

Columbia Aircraft's main activities were to plan and manufacture three four-seater light aircraft models -- the Columbia 300, 350 and 400 -- using composite material for the US market.

The company had accumulated losses of RM480.18 million at the end of 2006.

As a result of its huge debts, Columbia Aircraft filed for bankruptcy at the Oregon Court on Sept 24 last year.

On Nov 27 last year, Cessna, another aircraft company, bought over Columbia Aircraft for only RM56.27 million. The Malaysian Government only got RM25 million from the sale.

Source: NSTP