This article first appeared in The Edge Financial Daily on July 16, 2019

KUALA LUMPUR: Only a tenth of the budget allocated for the “Film in Malaysia Incentive” (FIMI) went to local film-makers from 2016 up to August 2018, with the lack of domestic promotion of the incentive affecting participation from the local industry.

The actual impact from the incentives to the creative industry also could not be gauged because there was no outcome evaluation, according to the Auditor-General 2018 Report Series 1.

The National Film Development Corp Malaysia (Finas), an agency under the multimedia and communications ministry, managed the FIMI programme.

In its audit, the National Audit Department found that the programme had successfully attracted foreign film-makers to film in Malaysia in order to increase employment opportunities for local crew and production companies.

However, it was inefficiently managed by Finas, according to the audit report.

“The target of at least 50% of the FIMI programme funding to benefit local film producers was not achieved as only five (5) local applications worth RM12.42 million (10%) were approved between 2016 up to the auditing date in August 2018,” said the report.

The allocation for FIMI under the 11th Malaysia Plan was RM124.52 million for the period between 2016 and 2018.

The audit also noted that Finas had not implemented an outcome evaluation programme to assess the impact of the incentives given.

Another issue flagged was RM1.21 million in payment approved despite the relevant application not fulfilling the required criteria.

“The FIMI unit did not retain financial records, expense ledger, expenditure receipts and bills from the applicant companies which had been reviewed and certified by the external audit consultant for the purpose of monitoring rebate claims and auditing,” the audit noted.

The FIMI programme’s objective was, among others, to encourage local film-makers to produce high-quality contents that could be marketed overseas. It was also aimed at promoting Malaysia as a filming destination for foreign film-makers, creating jobs for the local industry.

The FIMI programme was designed to provide a 30% rebate on all Qualifying Malaysian Production Expenditure (QMPE) for both local and foreign productions that covers post-production but not pre-production spending.

In a response to the audit finding dated April 17, Finas said it had received 94 applications between 2013 and March 2019. Of these, only 60 were approved and given a provisional certificate.

From the 60, 45 were international and the remaining 15 local projects, with an estimated QMPE of RM1.24 billion, said Finas.