Auditor-General’s Report: Internal auditing important
2011/11/02
JIMMY S.T. FOK, Petaling Jaya, Selangor
letters@nst.com.my
I REFER to reports (New Sunday Times, Oct 30) on reactions to the revelations in the Auditor-General's Report 2010.
Just like in past reports, the findings highlight glaring anomalies of various government departments and bodies, especially with regard to purchases of equipment at exorbitant prices.
Deputy Rural and Regional Development Minister Datuk Hasan Malek was quoted as saying that Majlis Amanah Rakyat had set up a committee to investigate the purchase of items for training courses at such high prices.
He added that appropriate action, depending on the severity of the anomalies, would be taken against the offenders. This included sacking the person.
It is time preventive measures were adopted by all government departments and agencies towards better responsibility and accountability.
Malaysia Crime Prevention Foundation vice-chairman Tan Sri Lee Lam Thye and Transparency International Malaysia deputy president Prof Datuk Mohamad Ali Hasan were spot on in their comments.
Lee suggested an overhaul of procedures on procurement of items and services to prevent similar issues from recurring.
Ali said: "There must be self-regulated checks.
"We cannot wait an entire year for the auditor-general's report before we are made aware of any financial discrepancies."
Most private organisations have two common procedural systems in place to prevent and curtail any anomalies:
- The establishment of an internal audit or compliance unit. The unit's role is to conduct periodic random audits to identify whether stipulated proper procedures are adhered to in the purchase of items and provision of services. These random exercises are to curtail anomalies or discrepancies before the external auditor comes in; and,
- The establishment of a purchasing or tender committee comprised of independent members who are neither directly involved in procurement or sourcing for suppliers.
The committee serves to ensure that the supplier with the best price offer will win the tender.
If there are valid reasons that a supplier with a slightly higher price should be given preference, then the reasons must be properly documented; for example, a longer warranty period.
Without the committee's sign-off, the officer in charge of procurement cannot proceed to award the contract and purchase.
The question that I wish to pose is whether the public sector has similar preventive procedural systems in place.
If the answer is "no", then it is incumbent upon departments and agencies to implement it quickly.
If the answer is "yes", I wonder how the anomalies went undetected until the auditor-general's office did its due diligence.
Read more: Auditor-General’s Report: Internal auditing important http://www.nst.com.my/nst/articles/18fok/Article#ixzz1cXsDHXF1
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