KUCHING: The Auditor-General's Report 2/2024 found discrepancies in the allocation balances for the Rural Water Supply Project (BALB) in Sarawak and Sabah in 2017 and 2020, as reported in the Budget Program and Performance Report by the Ministry of Rural and Regional Development (KKDW).
The audit revealed that the allocation balance for the Sarawak Reticulation BALB Project in 2017 was RM1.24 million, with RM4.98 million allocated for the Sabah BALB Project in 2020.
It was also revealed that KKDW disbursed a total of RM109.56 million, comprising RM12 million for the Sarawak BALB Project on December 6, 2017, and RM97.56 million for the Sabah BALB Project on November 16, 2020, to the Rubber Industry Smallholders Development Authority (Risda).
According to the report, Risda was designated as the paying agency, but the funds were not spent in the respective years due to project delays.
"The Audit also found that Risda was not one of the implementing agencies for the Sarawak and Sabah BALB Projects.
"Upon review, the Audit found the justification for the disbursement of RM12 million in 2017 for the Sarawak BALB Project due to delays in project implementation overall, as several projects failed in tender evaluations and needed to be retendered," it said.
Additionally, it stated that there were overlaps between the BALB projects and the construction of the Pan Borneo Highway, which disrupted the process of finalising the list of involved villages and delayed the final design phase of the project.
Seven projects were proposed for implementation in 2017, all of which were still in the design stage, with expected tenders in 2018.
As of October 2023, the Audit also found that 13 Sabah BALB projects had not been paid using the allocated funds to Risda.
According to the report, if the funds had not been disbursed to Risda, the actual allocation balances for the Sarawak Reticulation BALB Project in 2017 would amount to RM13.24 million and RM102.54 million for the Sabah BALB Project.
"This affects the Budget Program and Performance Report of KKDW for the Sarawak BALB Project, which needs to be submitted to the Ministry of Finance, where expenditures were recorded higher than actual, and balances were recorded lower starting from 2017 for BALB Sarawak and from 2020 for BALB Sabah," it said.
According to the report, KKDW in responses on September 4, 2023, October 5, 2023, October 10, 2023, and December 27, 2023, explained that based on Treasury Instruction (AP) Para 54, all expenditure controls fall under the jurisdiction of the Controlling Officer.
KKDW also clarified that the allocations disbursed to Risda was for the purpose of details of the Sarawak BALB Project and were not transferred for other project uses.
Therefore, it is not classified as a transfer of allocation or details because Risda only acted as a paying agency based on directives from the Infrastructure Division.
According to KKDW, the transfer of allocation received approval from the Chief Secretary (KSU) as the controlling officer for the purpose of paying projects that could not be paid in the current year to ensure project implementation was not hindered due to lack of allocation.
Furthermore, the Infrastructure Division will review the requirements and allocation balance at RISDA and will hold discussions before the end of the first quarter of 2024 with the Ministry of Finance.
Meanwhile, the Audit also opined that disbursing allocations to non-implementing agencies for audit payment purposes affects the Annual Budget Program and Performance Report.
"The Controlling Officer must oversee allocations and expenditures under his supervision to ensure financial management is enhanced," it said.