SHAH ALAM: The government is looking into ways to improve the governance of the Federal Land Development Authority (Felda), including the possibility of revamping its key positions.
This came about following the Auditor General's Report 2015 Series 2 tabled in Parliament yesterday (Monday), which revealed that Felda suffered a RM73.63 million loss from its three projects that were not approved by two relevant ministries.
Minister in the Prime Minister's Department Senator Datuk Paul Low Seng Kuan said the problem highlighted in the audit report was an issue of breakdown in governance and integrity of people responsible.
He said the government has clear procedures in project tendering and approvals, but is lacking in enforcement which led to non-compliance of procedures.
"First, it has to do with integrity of the person involved. That is why when we (government) select people (into key positions), they must be those of high integrity and not only based on competency and talent alone.
"Second, it is a breakdown of process. The government procedures are very clear, but the issue is with compliance. They did not go through the proper process, which requires one to ascertain the need for a project and then specifications needed, before calling for a tender.
"And the tender should always be an open tender, unless there's intellectual property involved, or an issue of security. Any conflict of interest also must be declared," he told reporters at Shah Alam Convention Centre, here today.
Low was attending a conference organised by the Selangor State Development Corporation (PKNS) on integrity, titled 'Strengthening Integrity and Risk Management Towards Best Corporate Governance'.
He said the government was going to make sure that the accountability process and framework must be in place in entities like Felda.
"I believe that the Malaysian Anti Corruption Commission should investigate if there's any wrongdoing, and I believe that they are already on it. And in the civil service, disciplinary action also should be taken by the Chief Secretary to the Government.
"From my side, I will have to look into this and identify the flaws (in Felda governance), find out why this is happening and propose corrective actions."
The audit report on Monday revealed that there was no feasibility study and due diligence undertaken by Felda prior to the Sturgeon Fish Farming, Savaro Restaurant and Schneeballen Pastries projects, to determine the need and location, technological capabilities, leading to the loss.
It also highlighted that there was no approval from the Rural and Regional Development minister and the Finance minister for the establishment of the four subsidiary and sub-subsidiary companies for the implementation of the three projects.