05 October 2007

PAC: Make govt officers careless with public funds pay

B. Suresh Ram
The Sun

The Public Accounts Committee (PAC) says government officers who are careless with public funds must be made to pay a surcharge from their own pockets.

This was provided for under the Financial Procedures Act 1957, said Public Accounts Committee chairman Datuk Shahrir Abdul Samad who agreed with the Auditor-General's report that action should be taken against officers involved in the direct negotiations of the Youth and Ministry's projects.

Under the act, a surcharge could be imposed on government officers found responsible for any improper payment of public money.

"It is thus important for officers to protect themselves in such direct negotiations," he said.

"We want officers to be accountable and responsible for actions and decisions," he said today after chairing a PAC meeting in Parliament House. Auditor-General Tan Sri Ambrin Buang and Youth and Sports Ministry secretary-general Datuk Mohd Yassin Salleh appeared before the PAC.

Shahrir said direct negotiations by the Youth and Sports Ministry for construction of the National Youth Skills Training Institute (IKBN) and the supply of equipment had resulted in cost overruns.

"There was no sufficient monitoring by the ministry (Youth and Sports) and the Finance Ministry," Shahrir said.

The Auditor-General Report 2006, among others, highlighted the procurement of equipment for IKBN where the government had to fork out RM8.39 million above the market price.

The purchases included two crane towers for which the ministry paid RM5.72 million against the market price of RM2.98 million and a set of screwdrivers at RM224 a set against the market price of RM32.

"Being a direct negotiation based project, government officials should be more careful and responsible in carrying out such duties," he added.

Shahrir said if were there any problems related to the negotiation of the procurement of the equipment to the institute, such as the ceiling limit and other related matters, the Youth and Sports Ministry should have checked with Treasury officials.

"The ministry should also have ensured that it has the ability and expertise to undertake such direct negotiations. This was because initially the project was an open tender process," he said.

"In the end, see what has happened?" Shahrir added.

He also added that the PAC was not happy with the prices quoted by some of the companies in supplying the equipment to the institutes.

"Not happy with some of the pricing … some prices were quoted with a profit margin of 50%," he said.

He advised ministries and agencies to look into the profit margin of companies supplying equipment or providing services, to ensure that it is within the appropriate level.

"If not, the project price would not be respected … and it is public funds," he said, adding that the PAC wants the government to opt for open tenders for all public projects instead of direct negotiations and through turnkey.

The government should resort to implementing projects through direct negotiations only when it is of specialised nature, said Shahrir.

"Direct negotiations should be limited to projects involving consultancy of specialised nature … most other projects anyone can do," he added.

He said open tenders would make local businesses and contractors more professional and improve competitiveness.

"In our experience we found that all problems related to project implementation were due to direct negotiations and implementation of such projects in a turnkey manner," he said.

Shahrir, who is Johor Baru MP, said PAC had asked the Finance Ministry to furnish it with a list of Eighth Malaysia Plan projects which were carried out via direct negotiations and turnkey manner.

He said ministries and agencies often resorted to direct negotiations when delays prevented projects from being implemented via the open tender system.

Shahrir said the PAC will visit the Port Klang Free Zone on Oct 18 to inspect its progress and development. This would be a follow up on two previous meetings the select committee had conducted on the issue.

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