Auditor General s Report For The Year 2013

Transcription

1 Auditor General s Report For The Year 2013 The Activities Of The Departments/ Agencies And The Management Of Negeri Sembilan State Government Companies 2 nd Series

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3 AUDITOR GENERAL S REPORT FOR THE YEAR 2013 The Activities of Departments/Agencies and Management of State Government s Companies For Negeri Sembilan 2 nd Series NATIONAL AUDIT DEPARTMENT OF MALAYSIA

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5 PREFACE 1. Article 106, of the Federal Constitution and the Audit Act 1957 requires the Auditor General to audit the State Government s Financial Statements, Financial Management and Activities of the State Ministries/Departments/Agencies. Section 5(1) (d) of the Audit Act 1957 empowers the Auditor General to carry out audit on any company registered under the Companies Act 1965 that are receiving grant/loan/guarantee from the Federal or State Government and any company where more than 50% of the paid-up share capital is held by the Federal Government, State Government or a public authority. Articles 107 of the Federal Constitution requires the Auditor General to report on the audit findings to the Supreme Head of Malaysia, His Majesty, Seri Paduka Baginda Yang di-pertuan Agong and His Royal Highness, Duli Yang Maha Mulia Yang di-pertuan Besar Negeri Sembilan. His Majesty will grant his Royal assent for the Report to be tabled in Parliament while His Royal Highness will then assent for the Report to be tabled in the State Legislative Assembly. 2. For the year 2014, the National Audit Department will continue to implement the initiatives under the GTP2.0: NKRA Anti Corruption to table the Auditor General s Report on the Activities of Departments/Agencies and the management of State Government s companies in Parliament/State Legislative Assembly at every seating. The National Audit Department will also continue to support the National Transformation Policy and to assist the Departments/Agencies making improvements by giving opinions and recommendations through the auditing carried out thus enhancing the people s well-being. I hope the report with regards to the implementation of Activities of Departments/Agencies and Management of Negeri Sembilan State Government s Companies for the year nd Series will become the basis for improving all weaknesses, strengthen efforts to improve and increase accountability and integrity and obtain value for money for each expenditure made as desired by the Government. 3. This report is the result of auditing carried out on certain activities implemented in three Agencies and a State Government s Company. Auditing on activities of State Departments/Agencies is for the purpose of evaluating whether the programme and activities planned are carried out successfully in accordance with the time frame set, no wastage and their objectives are achieved. Auditing on management of company is to evaluate whether the financial performance of the company is good, management of activities, finance and corporate governance of the company were implemented orderly and in accordance to the regulations and objectives are fully achieved. 4. Audit Observations have been submitted to the relevant Heads of Departments/Agencies/State Government Companies. Only significant Audit findings are reported in this Report. This Report is also forwarded to the Menteri Besar/State Secretary s Office of Negeri Sembilan. In order to improve on the weaknesses highlighted or to avoid their recurrence, I have forwarded 11 recommendations for the respective Heads of Departments/Agencies to take action. 3

6 5. I wish to express my gratitude to all officers of the State Departments/Agencies and State Government Companies who have given their full cooperation to my officers throughout the audit. I would also like to extend my appreciation and thanks to my officers who have worked diligently and given their full commitment to complete this Report. (TAN SRI DATO SETIA HAJI AMBRIN BIN BUANG) Auditor General Malaysia Putrajaya 2 nd May

7 REPORT SUMMARY ACTIVITIES OF STATE DEPARTMENTS/AGENCIES AND MANAGEMENT OF STATE GOVERNMENT COMPANIES 1. DEPARTMENT OF ISLAMIC AFFAIRS - Halal Certification Management 1.1. Halal Certification is Management meant to give recognition and guarantee to Muslim consumers that the foods and products/ingredients/premises are halal, hygienic and pure. Halal Certification Management is under Department of Islamic Development Malaysia (JAKIM) and Negeri Sembilan Islamic Religious Department (JHEAINS). JAKIM serves as a monitoring body and responsible for issuing halal certification. JHEAINS is responsible from the application process until the approval stage. Beginning August 2011, Halal Certification process is implemented via e-halal system. Applications that was processed and audited will be referred to the Committee of Negeri Sembilan s Halal Certification Validation Panel for approval. Next, it will be submitted to JAKIM for the issuance of Halal Certificate. For the period of 2011 to November 2013, a total of 638 halal certificates were approved out of 758 applications received An Audit conducted from September to December 2013 revealed that the management of Halal Certification have been carried out satisfactorily whereby the performances of issuance halal certificates for the period 2011 to 2013 were 84.2% of the 758 applications received. However, there are several weaknesses within the process and need improvement as follows: The applications of Halal certification were not processed in timely manner due to late in audit site visit. Noncompliance of regulations by premises that was awarded with Halal Certificate. The noncompliance includes cleanliness of the premises, the usage of raw materials without halal logo and selling products from manufacturers with invalid halal logo To ensure the implementation of halal certification is efficient and effective consistent with applicable laws and regulations, JHEAINS is recommended to take the following actions: Filling up the Assistant Food Technology Officer vacancy to ensure that the audit of premises can be executed within the timeframe set Monitor premises with halal certificate comprehensively to ensure the compliance of regulations. 5

8 Cooperate with the Local Authority in order to set the halal certification as one of the conditions to obtain a business license or licenses renewal for food premises / producer / consumables Promotions can be enhanced to raise awareness on the halal certification for entrepreneurs and consumers. 2. DEPARTMENT OF VETERINARY SERVICES - Livestock Industry Development Programme 2.1. Department Of Veterinary Services Negeri Sembilan (the Department) is responsible for developing the livestock industry in Negeri Sembilan. The primary function of the Department is on the production of livestock, poultry and animal feed; control, prevention and eradication of animal diseases, quarantine and research; provide training on the Livestock Industry; controlling the import and export of livestock and livestock products; inspection of meat, milk, eggs and control of slaughter house; and expansion of production and animal health. Through the Livestock Industry Unit (LIU), the Department has introduced the Livestock Industry Development Programme (Programme) under the 10th Malaysia Plan (10MP). The objectives of this programme are to produce competitive and viable livestock entrepreneurs; increase meat production by integration and feedlot; creating disease-free areas; enhancing the delivery of veterinary services; and transformation of farmers into commercial level. For the period of 2011 to 2013, a total of RM8.38 million allocation has been received from the State Government to implement the program and a total of RM8.34 million was spent An Audit conducted from September to December 2013 on the Livestock Industry Development Programme revealed that the budget management was good with more than 90% expenditure for the period 2011 to However, the management of the Programme was not satisfactory due to a number of weaknesses were found as follows: There was no clear method to evaluate the performance and the implementation of the Programme in terms of objectives and targets achievements. It also difficult for monitoring process to be made on the Programme. Only 62 (9.8%) out of 630 farmers who received PINTAF/ Pawah scheme return the livestock as per agreement which involved a total of 315 livestock (5.6%) out of 5,596 livestock that have been distributed throughout 2008 to A total of RM1.44 million was spent not for the Programme purposes since the Department has no detailed plan of the Programme such as the number of farmers and livestock distributed. Market research were not done for the procurement of livestock for the period of 2011 to 2013 amounting to RM6.62 million. Procurement and distribution of livestock for 2011 cannot be determined due to 6

9 payment vouchers with the related supporting documents went missing. In addition, verification of the animal has undergone health checks, vaccinations and blood tests cannot be done because all the relevant supporting documents were attached to the missing payment vouchers. No specific monitoring mechanism to ensure the implementation of the Programme achieves its objectives and investigation were not carried out on the complaints of livestock deaths To improve the performance of the Programme, it is recommended the Department Of Veterinary Services Negeri Sembilan to take the following actions: Set a target to enable the Department evaluate the performance of the Programme Enforcement towards PINTAF agreement to ensure livestock are returned as per agreement. In addition, periodic monitoring should be enhanced by the Department Records pertaining to the Programme shall be kept for the purpose of reviewing and monitoring. 3. JUDICIAL DEPARTMENT SYARIAH - Handling of Syariah Cases 3.1. Negeri Sembilan Syariah Judiciary Department (JKSNS) was established based on Sec. 41 (1) and (2) of the Enakmen Pentadbiran Hukum Syarak Negeri Sembilan The objectives of the establishment is to handle syariah cases fairly, orderly and efficient based on the jurisdiction conferred by law and the constitution in line with Islamic principles and requirements. JKSNS consists of three categories which are the Syariah Appeal Court (MRyS), the Syariah High Court (MTS) and Syariah Subordinate Court (MRS). JKSNS has the authority to hear, try and decide Mal cases, criminal cases and inheritance cases based the powers conferred under the laws and enactments enforced among others the Undang- Undang Keluarga Islam (Negeri Sembilan) 2003, Enakmen Pentadbiran Agama Islam (Negeri Sembilan) 2003, Enakmen Tatacara Mal Mahkamah Syariah (Negeri Sembilan) 2003 and Enakmen Tatacara Jenayah Syariah (Negeri Sembilan) Based on the report maintained by JKSNS, a total of 15,361 Mal cases and 2,872 Criminal cases have been registered in the year 2011 to 2013 and a total of 15,296 Mal cases and 2,630 Criminal cases were resolved. A total of 1,449 Mal cases and 1,007 Criminal cases were still pending at the end of year An Audit conducted from September to November 2013 revealed that the cases handling was good. Overall, the number of Mal and criminal cases solved increased in 2013 compared to Mal cases solved in the year 2013 increased by 9.6% from 5,343 compared to 4,876 in For criminal cases, a total of 1,399 cases were solved in 2013 compared to 749 in 2012, an increase of 86.8%. Whilst, 97% of cases registered have 7

10 successfully called in within the time set. JKSNS also has been monitoring the case handling well. However, there are some weaknesses in the handling of cases of syariah could be improved as follows: Increase number of backlog cases due to several external and internal factors. Among the factors are the number of judges compared to the high number of cases and absence of the defendant/ accused person or asked to postpone the trial. The record of e-syariah was not updated where the were differences in number of cases between e- Syariah and manual records To improve the performance of the syariah cases handling, it is recommended that JKSNS consider the following: Review the number of judges and any posts corresponding to the increase of cases registered annually Update the data in e-syariah to avoid differences with manual record the maintain the accuracy of data. 4. ISLAMIC OF COUNCIL OF NEGERI SEMBILAN - MAINS Holdings Sdn. Bhd MAINS Holdings Sdn. Bhd. (MHSB) formerly known as EDIFAJAR Development Sdn. Bhd. was established on January 22, The company has changed its name and became known as MAINS Holdings Sdn. Bhd. beginning from 10 November 1998 which is wholly-owned by Islamic Council of Negeri Sembilan (MAINS) with an authorized capital of RM5 million and paid up capital of RM0.75 million. The objective of MHSB is to increase income for MAINS through business activities, managing and developing all MAINS assets in order to be fully utilised. MHSB main activities are in real estate and services such as property management, real estate development, business development and counselling. As at November 2013, MHSB has 2 subsidiaries with 100 % shareholding of Perbadanan Wakaf Negeri Sembilan (PWNS) and MAINS Hotel Sdn. Bhd. (MAINS Hotel). These subsidiaries were established to carry out activities related to Wakaf management and hospitality An Audit conducted from September to November 2013 generally revealed that the company financial position was good whereas until the end of 2012 the company has recorded a retained earnings of RM5.85 million. MHSB has stated a net profit after tax for the third consecutive year despite profit trends show declining in pattern. Activities management and corporate governance was satisfactory. However there were areas that need improvement in terms of revenue collection and schedule of rented premises maintenance The Audit recommends the following to improve the management of MHSB: 8

11 Prepare a maintenance schedule to ensure each rented premises and equipment are always in good condition which can extend the life span of premises and equipment Provide Corporate Strategic Plan and Key Performance Indicator so that the MHSB san clear business direction and targets to be achieved. 9

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