This article first appeared in The Edge Financial Daily on November 22, 2019

KUALA LUMPUR: Former auditor-general (AG) Tan Sri Ambrin Buang found the process of auditing 1Malaysia Development Bhd (1MDB) to be more difficult than usual as the fund did not give its full cooperation by sharing the necessary documents required by the National Audit Department (NAD), he told the High Court yesterday.

Ambrin testified that the NAD’s special audit team for 1MDB — which comprised 12 officers — experienced certain limitations when conducting the audits, as some of the original and important documents, which were supposed to be used to verify transactions and as audit evidence, were either submitted late or not submitted at all by the fund.

“These limitations had a significant impact on the audits carried out in verifying the financial position and operations of the company and related transactions,” he explained.

For instance, 1MDB did not submit the group’s management account for the year ended March 31, 2015 and bank statements from overseas financial institutions.

“No access can be made to the computers, notebooks and servers in 1MDB to obtain data and information for the purpose of cross-reference and analysis during auditing.

“In this situation, I find the 1MDB auditing difficult and that it took almost a year to complete when in fact, it could have only taken within five months,” he added.

Ambrin noted that the 1MDB audit process started on March 9, 2015 and was scheduled to be submitted to the Public Accounts Committee (PAC) on Feb 24, 2016.

However, due to the alleged amendments done under the instruction from former prime minister Datuk Seri Najib Razak, the final “amended” report was only eventually submitted to the PAC on March 4, 2016.

It was initially decided in the cabinet meeting on March 4, 2015 that the NAD was to verify 1MDB’s account and that the report should be submitted to the PAC.

The audit, Ambrin said, was done based on the mandate of the Cabinet and the PAC to verify the audited financial statements of 1MDB group and to evaluate if the financial performance and activities of 1MDB group were still in line with the company’s original objectives which are:

• Investing in projects that can help drive strategic initiatives for long-term sustainable development and encourage foreign direct investment inflows into the country; and

• Utilising existing sovereign wealth fund networks in the Middle East and China to bring in foreign direct investment that is suitable for national projects.

Ambrin also stressed that when the auditing process was imposed on 1MDB, all the members of the special audit team had followed the standard procedure of the International Standards of Supreme Audit Institutions (ISSAI 3000) in the auditing process and preparing the final audit report.

The process is also subject to the Audit Act 1957.

The witness was testifying in Najib and Arul Kandasamy’s audit tampering trial.

Najib is charged with abusing his power in directing the 1MDB audit report be amended by omitting certain facts in order that no action can be taken against him, while Arul Kanda is accused of abetting his actions.

If convicted, they face a maximum jail term of 20 years and a fine of at least five times the amount of gratification, or RM10,000, whichever is higher.

Ambrin will continue to read his witness statement before Justice Mohamed Zaini Mazlan on Wednesday.