FOR STAT. 1st Series JABATAN MALAYSIA

Transcription

1 AUDITOR GENERAL S REPORT FOR THE YEAR 2012 Prefacee And Report Summary The Activities Of The State Depa artment/agencies And The Mana agement Of Thee State Govern nment Companies 1st Series STAT E PENANG JABATAN AUDIT NEGARA MALAYSIA

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3 PREFACE 1. Article 106 of the Federal Constitution and the Audit Act 1957 requires the Auditor General to audit the Financial Statements of the State Government, the Financial Management, and the Activities of State Departments/Agencies. Section 5 (1) (d) of the Audit Act 1957 empowers the Auditor General to audit a company registered under the Companies Act 1965, which received grant/loan/guarantee from the Federal Government or the State Government and a company where more than 50 % of the paid-up share capital is held by the Federal Government, State Government or State Government Agencies. An order cited as the Audit (Accounts of Companies) Order 2004 (amended 2009) with the consent of the Supreme Head of Malaysia, His Majesty, Seri Paduka Baginda Yang di- Pertuan Agong has authorised the Auditor General to conduct an audit on the State Government companies. While Article 107 of the Federal Constitution requires the Auditor General to submit his report on the audit findings to the Supreme Head of Malaysia, His Majesty, Seri Paduka Baginda Yang di-pertuan Agong and His Excellency, the Head of State of Penang. His Majesty will give his Royal Assent for the tabling of the Report in Parliament while His Excellency will then consent for the tabling of the Report in the State Legislative Assembly. 2. Starting from 2013, the National Audit Department is responsible to implement the four initiatives under the GTP2.0: Anti-Corruption NKRA. One of these initiatives is to table the Auditor General s Report on the Activities of the State Departments/Agencies and the Management of State Government companies at each Parliamentary / State Legislative Assembly session. Therefore, it can be immediately accessible by the public in accordance with the requirements of the Government s agenda for the success of the Government Transformation Programme for the period 2013 to I hope this report, on the implementation of the Activities of the State Departments / Agencies and the Management of the State Government Companies for the year 2012, tabling first for the year 2013, would be a basis for improving all weaknesses, reinforcing improvement efforts, enhancing accountability and integrity as well as getting value for money for every expenditure incurred as aspired by the Government. 3. My report is the result from the auditing that has been carried out on certain/specific activities implemented/undertaken by 4 Departments and a State Government Company. The Audit of the activities of the Departments/ Agencies was to assess whether the planned programs and activities successfully implemented in a timely manner, without wastage and achieved its objectives. While the audit of the company's management is to evaluate whether the financial performance of the company is good, management and financial activities as well as corporate governance implemented appropriately in accordance with the set rules and have achieved the desired objectives of its incorporation. To improve the shortcomings raised or to avoid reoccurrences of the weaknesses, I have put forward

4 recommendations for remedial actions by the Head of Departments/Agencies and State Government s Companies concerned. 4. I would like to express my gratitude to all officers in the various Departments/Agencies and State Government Companies in Penang who has given their full cooperation to my officers during the audit. I would also like to extend my appreciation and thanks to all my officers who have worked diligently and given their full commitment to complete this report. (TAN SRI DATO SETIA HAJI AMBRIN BIN BUANG) Ketua Audit Negara Malaysia Putrajaya 18 February

5 REPORT SUMMARY ACTIVITIES OF THE STATE DEPARTMENTS/AGENCIES AND MANAGEMENT OF THE STATE GOVERNMENT COMPANIES 1. NORTHERN SEBERANG PERAI DISTRICT AND LAND OFFICE AND NORTH EAST DISTRICT AND LAND OFFICE - Quit Rent Revenue Collection 1.1. Quit rent is the main revenue for the Penang State Government. The District and Land Offices are responsible for managing all land administrations. Activities in the District and Land Offices include registration, collection of revenue, development, disposal and enforcement. The District and Land Offices in the State of Penang uses e-tanah application for registration and collection of quit rent revenue. Quit rent can be paid via online or any District and Land Office counter. The Northern Seberang Perai District and Land Office (PDTSPU) and the North East District and Land Office (PDTDTL) respectively have 76,587 and 50,724 registered titles as at end of August The total quit rent revenue including online collection in both districts for the year 2010 to 2012 amounted to RM million An Audit conducted from the month of May to August 2012 revealed that overall the performance of revenue collection at PDTSPU and PDTDTL was satisfactory with the achievement between 83.6% and 106.4% of the stipulated target. However, several weaknesses must be given due attention as follows: Inaction in collecting quit rent arrears. Increase in quit rent arrears. Inaccurate quit rent rates. Inaccuracy of e-tanah data. Quit rent rates were not updated in the Revenue Module of e-tanah To improve the collection of quit rent, the Northern Seberang Perai District and Land Office and the North East District and Land Office are recommended to take the following actions: The revenue and the registration data need to be updated for integration to ensure the number of titles in the Revenue and Registration Module are correct and accurate The updating of landowners information in the Revenue Module should be supervised. 140

6 Titles with nominal quit rent of RM1 and RM0 should be checked to ensure compliance Recovery of e-tanah system should be done promptly to ensure revenue collection process runs smoothly Awareness campaigns on the responsibility of paying quit rent should be increased. 2. DEPARTMENT OF ISLAMIC RELIGIOUS AFFAIRS - Management Of Halal Certification 2.1. Halal Certification and Halal logo were issued to give recognition and guarantee that food products or ingredients used by the food premises are in accordance to the guidelines and procedures set by the Department of Islamic Development Malaysia (JAKIM). The use of Halal Certificate and logo is not mandatory but entrepreneurs who display fake logo will be charged under the Trade Descriptions Act Starting 1 January 2012, JAKIM and the Council/Department of Islamic Religious Affairs are the only agencies authorised to issue the Malaysia Halal Certificate and logo. Issuance of the Halal Certificate must comply with syariah and technical aspects. Syariah aspect emphasizes on the non-usage of non halal and doubtful ingredients in the production and preparation of products meanwhile technical aspects include cleanliness of the premises, sanitation and safety of food/products. As at September 2012, there were 436 operators with valid Halal Certificates An Audit conducted from May to August 2012 revealed that on the overall, performance of the issuance of Halal Certificates was satisfactory in terms of the number of applications and management. However, there were several weaknesses as follows: Delays in the issuance of Halal Certificates. Premises issued with Halal Certificates were not monitored. Limited enforcement To improve the management of the halal certification, the Halal Division is recommended to take the following actions: Review the need for delegation of powers to enable the officers to carry out monitoring and enforcement activities effectively. The officers should be gazetted and possess authority cards as required under the Trade Descriptions Act Time norms should be set for the issuance of halal certificates or alternatively adopt the time frames set by JAKIM Enhance monitoring activity particularly on food premises/operators and abattoirs 6 months after issuance of the halal certificate. 141

7 3. PENANG MUNICIPAL COUNCIL - Management of Public Housing 3.1. The Penang Municipal Council (Council) provides Local Authorities services on the island of Penang. These include renting of public housing to Malaysians. The two Public Housing Schemes provided by the Council are the Public Housing Scheme and the Public Rental Scheme. The first scheme is offered to families with monthly income below RM2,500 with rental rates between RM60 and RM200 per month. While the second scheme is offered to those who can afford to rent at market rental rates between RM170 and RM5,160 per month. The Council has provided a total of 1,535 housing units in 22 residential areas for rent under the Public Housing Scheme and 502 housing units in 12 residential areas under the Public Rental Scheme since the 1960s. For the year 2010 to 2012, a total of RM3.16 million has been allocated for maintenance. According to the records, as at June 2012, the balance of rental arrears for both housing schemes amounted to RM1.58 million An Audit conducted from May to August 2012 revealed that on the overall, the management of public housing was satisfactory. However improvements are recommended for the following shortcomings: The records pertaining to application for public housing rental were not maintained properly. Maintenances of public housing were not planned and there were delays in taking action on public complaints on damages. Compliance on the terms and conditions of rental agreements was not fully enforced and monitored. Outstanding rental cases were not referred to the Legal Unit resulting in no enforcement To further improve the management of public housing, the Penang Municipal Council is recommended to take the following actions: Update the rental application schedule and undertake regular maintenance Carry out scheduled monitoring and enforcement activities jointly Prepare Standard Operating Procedures (SOP) and fix a suitable time frame for handling complaints Set a target in reducing outstanding rentals as a Key Performance Indicator (KPI). 142

8 4. ISLAMIC RELIGIOUS COUNCIL OF PENANG As-SahabahUrus Zakat Sdn. Bhd As-Sahabah Urus Zakat Sdn. Bhd. (ASUZSB) was established as a wholly owned company of the Islamic Religious Council Of Penang (MAINPP) in June 1994 with an authorised capital of RM5 million and paid up capital of RM1.02 million. In the earlier years of establishment, ASUZSB only served to collect zakat. After its corporatisation in the year 1999, MAINPP handed over the authority for the distribution of zakat to ASUZSB. ASUZSB is managed by 11 Board Members with expertise in various fields relating to the company's activities. An Audit conducted from May to August 2012 revealed that overall the financial position of ASUZSB was good while the management of activities and corporate governance were satisfactory. However there were several weaknesses as follows: ASUZSB invested in financial institutions not approved to accept deposits from the government link companies. Two billboard sites were not approved by the local authorities. ASUZSB did not prepare Standard Operating Procedures, work process and strategic planning. Asset management procedures were not complied with, such as labelling and disposal of assets were not done 4.3. To further improve the management of activities and corporate governance, ASUZSB is recommended to take the following actions: Monitor marketing and advertising activities Ensure compliance to the Malaysian Code of Corporate Governance and financial management regulations Prepare a Corporate Strategic Plan Set up an Asset Committee to manage the assets and adopt the current regulations. 143