Money for nothing

What should be of even more grave concern to all Malaysians is the great unknown – just how much more wastage and inefficiencies are there, which are not being investigated?

Tricia Yeoh, The Sun

IF there is one government document Malaysians look forward to each year, it’s the Auditor-General’s Report. Once released, we go crazy picking it apart and selecting our favourite delectable pieces to rave about to friends.

It was no different this year with the 2012 report. This time, we even managed to make it to the Wall Street Journal that reported on the wasteful spending and mismanagement.

For instance, we read about the Education Ministry wasting RM2 billion on poor school security systems with unsatisfactory results, 20 branded wall clocks bought by the Broadcasting Department for RM3,810 each, more than 38 times the estimated price of RM100, and a RM400,000 claim difference for Health Ministry uniforms, among many other ridiculously shameful examples (never mind the 44 missing loaded firearms that the police said could have fallen into the sea from boats).

A total estimate of wastage caused by such gross inefficiency was not given, mainly because this was merely a partial audit of the federal government bureaucracy.

The report only covered observations from the audit of “21 programmes/ activities/ projects of 15 Federal Ministries/ Departments and management of 4 Government Companies”, so imagine the results if this sampling was widened to include the hundreds of programmes run by the 24 federal ministries over the full year.

Even so, the total sum of wastage based on select cases quoted by mainstream media came up to RM3.5 billion, which, by the way, is RM200 million more than what the Finance Ministry has told us the government would save by increasing oil prices in its recent subsidy rationalisation move.

Although government does eventually need to phase out subsidy dependency, what infuriates people most is that such efforts are not perceived to be matched in commensurate measure by attempts to reduce unnecessary government spending.

It was timely that an IDEAS policy paper (the Institute for Democracy and Economic Affairs for which I work) by author Professor David Jones from the University of Brunei Darussalam, gave specific proposals on how transparency could help existing failings in the public procurement system.

He states that Malaysia spends more than RM150 billion each year on procurement, almost one fourth of our nominal GDP. This is higher than what most OECD countries spend, about 12% of their GDP annually.

The various acts, treasury instructions and circulars that form the basis of government procurement are clear, for example in stipulating that open tenders are required for works, goods and services procured worth more than RM200,000 a year.