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

KUALA LUMPUR: Last year, 16 of 24 ministries achieved the “excellent” level under the National Audit Department’s (NAD) accountability index assessment, and eight rated “good”, according to the Auditor-General’s Report 2018 Series 1.

According to the report, the NAD audited the financial management of 24 ministries, 17 departments and 13 federal statutory bodies.

Of the government departments, 15 were rated “excellent” and two placed in the “good” category. For statutory bodies, three were rated “excellent”, four “good”, five “satisfactory” and one “not satisfactory”.

“The financial management can be improved if officers or department heads not only take action to rectify the weaknesses revealed by [the] auditors but also preventive action to ensure the weaknesses are not repeated,” the report said.

The report also made recommendations to improve the government’s financial management, including greater involvement among department heads in financial matters and having a system of checks and balances.

“They need to be hands-on in the management [of financial matters],” the report said, adding there should be periodical assessments of officers to prevent incompetent ones from using their discretion when making decisions.

Spot checks show financial compliance ‘still unsatisfactory’

Spot audits or checks during 2018, however, showed compliance with financial rules was “still unsatisfactory” among 15 ministries and 51 federal statutory bodies.

“Overall, non-compliance with spot audit criteria was at 85.4% for the responsibility and cost centres under the 15 ministries and at 80.5% for the 51 federal statutory body offices,” the report noted. Corrective actions and improvement efforts have been implemented, it added.