FACULTY OF ADMINISTRATIVE SCIENCE AND POLICY STUDIES BACHELOR OF ADMINISTRATIVE SCEINCE (HONOURS) APPLIED RESEARCH PROJECT (ADS 555)

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1 FACULTY OF ADMINISTRATIVE SCIENCE AND POLICY STUDIES BACHELOR OF ADMINISTRATIVE SCEINCE (HONOURS) APPLIED RESEARCH PROJECT (ADS 555) A STUDY ON FINANCIAL EFFICIENCY OF MELAKA STATE GOVERNMENT EXPENDITURE NAME OF STUDENTS: NORADAWIYAH BINTI PADULLAH ZAAHIDAH BINTI MAT YUSOP NAME OF SUPERVISOR: MR. MOHD. ZULHILMI BIN MOHD YUNUS NAME OF CO-SUPERVISOR: MISS EKMIL KRISNAWATI BINTI ERLEN JONI SEMESTER MARCH JULY 2013

2 CLEARANCE FOR SUBMISSION OF THE RESEARCH REPORT BY THE SUPERVISOR Name of Supervisor : Encik Mohd. Zulhilmi Bin Mohd Yunus Title of Research Report : A study on Financial Efficiency Of Melaka State Government Expenditure Name of Students : Noradawiyah Binti Padullah Zaahidah Binti Mat Yusop I have review the final and complete research report and approve the submission for the report evaluation. (ENCIK MOHD. ZULHILMI BIN MOHD YUNUS) SUPERVISOR ii

3 ACKNOWLEDGEMENT Praise to ALLAH for His guidance throughout the accomplishment of this applied research project report. We always thankful to ALLAH for His Blessing throughout our academic efforts as Ibadah and crowns them with success in the world and hereafter. Our deepest appreciation goes to our most compassionate lecturer, Encik Zulhilmi Bin Mohd Yunus for his patience and tolerance in guiding and correcting us towards the completion of this report. Without his deep understanding and consideration, we are unable to complete this report with passion and interest. May Allah bless him in this world and hereafter, Ameen. Next, we want to extand our gratitude to our supportive friends namely NurMazlina, Fadila, Fairul Haziq, Naziefatul Hana, Sharul Nizam, Siti Jamilah, Nur syuhada and Qayum for their physical, emotional, mental and motivational support. No one can replace their role as the positive friends in our student s life. We would also like to acknowledge FSPPP lecturers including Assoc. Prof Md Nor Othman and individuals whose names we did not mention here, for their constructive comments and helpful suggestions during the process in completing this report. Finally, the greatest respect and love to our parents and families who always be our backbone and appreciate our academic s endeavour with prayers, support and encouragement that helps us to have an inner peace during critical moment in our life. May Allah shower his Mercy on our parent and families and great them with Janah A l- Firdausi, Ameen. iv

4 ABSTRACT It is generally agreed that the most important single function of government is to secure the rights and freedoms of individual citizens. Basically, government recognizes the principle that the public must be protected and served. The citizen, in effect, surrenders a degree of individual sovereignty to the government in return for protection of life and property and the delivery of essential services. Governments supervise the resolution of conflicting interests, the workings of the political process, the enforcement of laws and rights, and the monitoring of national income and international trade where government regulate economic and social relationships among individuals and private organizations and carry out enterprises such as production of military goods, provision of postal services, and ownership of power utilities and public works. Among the most basic services provided by government are the printing and coining of money, the provision of roads, sewers, water, education, and social and welfare services. Government spending also can be categorized as the main agenda to ensure citizen are really gain benefit from government expenditure. The allocation of goods and service efficiently will reflect the effectiveness of government in delivering the services and at the same time to fulfill needs and demands from citizen. Hence, financial area must be plan strategically that will meet the objective of government and in line to promote and develop economic growth incrementally. v

5 Table of Contents CHAPTER Declaration Acknowledgement List of figures List of Tables PAGE v iv x x Chapter 1: Introduction Introduction Problem Statement Research Objective Research Question Scope of the Study Significant of the study 5 Chapter 2: Literature Review and Conceptual Framework 2.1 Introduction Definition of Efficiency Concept of Expenditure Efficiency Financial Efficiency Social Efficiency 20 vi