MS ISO 9001 : 2000
2
CORPORATE STATEMENT
4
MESSAGE FROM THE AUDITOR GENERAL
6
MAIN ACHIEVEMENTS
9
CORPORATE INFORMATION Perspective Organisation Chart Profile of The Auditor General Top Management Department’s Strategic Planning 2005 - 2007 Auditor’s Code of Ethics Internal Control & Departmental Meetings Committee Involvement
10 12 13 14 16 17 18 19
Contents 21 23 39 45 53
ANNUAL ACTIVITY REPORT
2006
MAIN ACTIVITIES Corporate Management Sector Federal Government Audit Sector State Government Audit Sector Federal Statutory Bodies Audit Sector
57
CONTRIBUTIONS TOWARDS ENHANCING ACCOUNTABILITY IN THE PUBLIC SECTOR
63
INTERNATIONAL INVOLVEMENT
69
SPECIAL REPORTS 100 Years’ Anniversary Celebration Symposium on Environmental Governance 2006 National Audit Day
70 71 72
Corporate Statement VISION To be a prime contributor for promoting excellence in financial management and accountability in the public sector.
MISSION To audit in a professional and independent manner and to provide a balanced report to Parliament and State Legislatures for enhancing accountability in public administration.
OBJECTIVES • To prepare quality and timely Audit Reports for Parliament and State Legislatures. • To carry out audit activities independently and produce a balanced report. • To fulfil the needs and aspiration of stakeholders and auditees. • To manage audit activities in the most efficient and effective manner. • To be a role model to other organisations.
CLIENT CHARTER • To perform audit professionally in conformity with the International Standards of Auditing. • To certify Financial Statements and issue audit certificates within four months after receiving the Annual Financial Statements. • To prepare balanced Audit Reports without prejudice and bias. 2
annual activity report 2006
Corporate Statement QUALITY POLICY The National Audit Department is committed towards ensuring a high standard of quality and professionalism in its audit work and reporting in conformity with the International Standards of Auditing.
QUALITY SLOGAN Quality Audit Enhances Accountability
CORPORATE CULTURE Professionalism To ensure a high degree of professionalism in the performance of audit work by emphasising the importance of staff discipline and quality. Independence To carry out our duties without restrictions so as to ensure that our reports and opinions are independent and in accordance with the requirements of the Audit Act 1957. Quality To ensure a high standard of quality in the performance of our duties by promoting a good working culture and continuous professional development. Integrity To observe a professional code of ethics in the conduct of the audit work and reporting of audit findings. Esprit de Corps To emphasise the importance of teamwork by creating a productive working environment which emphasises on esprit de corps and innovation. Responsibility To be responsible in all actions as an auditor or staff of the department.
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Message From The Auditor General Assalamualaikum wbt. and greetings. The year 2006 saw the continuation of the National Audit Department’s efforts in realizing its vision of becoming an esteemed institution in upholding public accountability through various initiatives and reforms. These efforts include organizational and human capital development; infrastructure enhancement; as well as modernizing the audit approach and methodology in order to maintain professionalism and integrity in the execution of the audit mandate. The year 2006 was also a significant year, as the Government had launched an important blueprint, namely the Ninth Malaysia Plan as the ‘National Mission’. In sustaining transparency, accountability and good governance in the public sector, the Public Service must also take cognizance from the experience in the Eighth Malaysia Plan to overcome the elements of wastages and weaknesses spotted in their financial management. In terms of departmental administration, the National Audit Department must be seen as a role model in every aspect of management and to always uphold the principles of the National Integrity Plan by giving more focus on the outcomes and impacts of programmes as opposed to just their outputs. In the course of the Department’s reforms and initiatives, we had launched and published the first issue of the Audit Bulletin as an effort to create audit presence among the auditees. The Department had also organized the National Audit Convention, which discussed issues pertaining to accountability and good 4
governance. Apart from that, the Department had organized an Environmental Governance Symposium in support of the Government’s effort in dealing with environmental issues. Effort is also undertaken to introduce the Accountability Index, which aims at measuring the effectiveness of the financial management systems of Ministries/Government Agencies. It is hope that the implementation of the ratings system based on the Accountability Index will further improve the public governance. Therefore, the Department will continue to venture into new initiatives and areas deemed necessary in implementing its audit mandate effectively. The Department is also focused on improving its collaboration with professional bodies and International Audit Institutions in its effort to enhance public sector auditing in Malaysia. Officials from the Department are also involved as working group members, speakers and facilitators in areas of auditing locally and internationally. I am convinced therefore that these exposures will assist in the development of human capital towards moulding a first class mindset. Besides that, the National Audit Academy also plays a prominent role as a training centre for continuous professional development of audit personnel and auditees. At the international level,the NationalAuditAcademy has been recognised as a course provider under the Malaysian Technical Cooperation Programme (MTCP) for public sector auditors from abroad, and will commence its international training programmes in 2007.
the Department’s strategic plan in upholding public accountability.The show of support is a manifestation of audit personnel’s acceptance of the initiatives introduced for the betterment of the Department. I firmly believe that with the support of its trained and experienced personnel, the Department will contribute effectively towards the successful implementation of the Ninth Malaysian Plan and improving the Government’s delivery system. In tandem with our national development, I am confident that the National Audit Department will continue to progress in its efforts to strengthen public sector auditing in Malaysia. This confidence is supported by the Department’s well structured plan run by a collectively efficient and knowledgeable personnel in establishing a good organisation and infrastructure. Lastly, I would like to congratulate and express my warmest gratitude to all officers and staff involved in preparing this 2006 Annual Activity Report, as well as to those who had contributed in achieving the audit mandate. Best wishes.
I am impressed with the overwhelming support given by audit personnel towards the success of 5
Main Achievements 1.
The 2005 Auditor General’s Report • The Auditor General’s Report for the Government and Federal Statutory Bodies was presented to His Majesty the Yang di-Pertuan Agong on 29 June 2006 and tabled in Parliament on 1 September 2006. • The Audit Report and Certificate for the Financial Statements of 13 State Governments were issued between 8 June and 8 August 2006. The Auditor General’s Reports for the 13 State Governments were tabled in Parliament on 5 September 2006. • For the first time the Auditor General’s Report on State Governments’ Financial Statements were issued separately from the Activity and Special Study Report on State Governments’ Departments/Agencies.
2.
Auditing conducted in 2006: Main Auditing Activity Audit Sector
Financial Statements
Financial/Agency Management
Performance
Federal Government
1
40
40
State Government
301
95
54
Federal Statutory Bodies
114
22
20
Total
416
157
114
3.
The National Audit Institution Centennial Celebration: • National Audit Convention • Audit Gala Night o Launching of the National Audit Institution’s 100 Years book o Launching of the National Audit Institution’s 100 Years Memorial Stamps
4.
The National Audit Department was awarded the MS ISO 9001:2000 Certification for the Audit of the Financial Statements of Federal Government and Statutory Bodies on 23 February 2006.
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annual activityreport 2006
Main Achievements 5.
The National Audit Department published the Audit Bulletin for the first time in June 2006.
6.
Launching of 3 Auditing Guidelines: • Auditing Guidelines on Financial Statements of Islamic Council and Other Islamic Institutions. • Auditing Guidelines on Financial Statements of State Statutory Bodies. • Auditing Guidelines on Financial Management and Activity of Forest Department.
7.
The National Audit Academy was accredited as a Course Provider under the Malaysian Technical Cooperation Programme (MTCP) for the following fields: • Performance Audit • ICT Audit
8.
The National Audit Department won the 2006 Public Service Innovation Award titled Public Account Statement for State Government Audit Version (VersAd).
9.
Negeri Sembilan Audit Branch’s Quality Control Circles (QCC) group won the state level QCC Convention and subsequently contested at National level Convention.
10. The appointment of the Auditor General of Malaysia as a Governing Board Member of the Asian Organization of Supreme Audit Institutions (ASOSAI) for the period from 2006 until 2009. 11. The National Audit Department organized an Environmental Governance Symposium with the theme “The Role of Auditor Towards Improving Environmental Governance”. 12. The National Audit Day Celebration was held at the state level for the first time which was hosted by Selangor Audit Branch. 13. For the first time a meeting between the Auditor General and all Heads of Public Sector Internal Audit was held on 3 May 2006 as an effort to improve cooperation in auditing works. 14. A total of 71 courses in auditing, accounting, ICT and management involving 2,116 participants were conducted by the National Audit Academy.
7
8
annual activityreport 2006
corporate information Perspective Organisational Chart Profile of The Auditor General Top Management Strategic Planning Auditor’s Code of Ethics Internal Control & Departmental Meetings Committee Involvement
9
annual activity report 2006
Perspective The National Audit Institution has been established since 1906. The Auditor General is appointed by His Majesty the Yang di-Pertuan Agong on the advice of the Prime Minister and after consultation with the Council of Rulers in accordance with Article 105 of the Federal Constitution. A person who holds the post of Auditor General can be re-appointed but not for other appointments under the Federal or State services. The Auditor General may resign at anytime but cannot be terminated except under the same grounds and procedures as in the termination of a Federal Court Judge. In 2006 the Department celebrated its 100th anniversary. During that period, 17 people have held the post of Auditor General. The year 2006 also witnessed changes in the leadership of the Department when Tan Sri Dato’ Setia Ambrin bin Buang became the Auditor General on 23rd February 2006 upon the retirement of Tan Sri Dr. Hadenan bin A. Jalil. Although leaders changed, the Department’s mandate and objective to improve accountability in the public sector management remained intact. Article 106 of the Federal Constitution and the Audit Act 1957 outline the Auditor General’s responsibilities to audit the accounts of the Federal and State Governments, Government Agencies, Public Authorities and other bodies as ordered by His Majesty the Yang di-Pertuan Agong. The Auditor General has also received the mandate to audit the accounts of Government Linked Companies and its subsidiaries through the Order of His Majesty the Yang diPertuan Agong. The Auditor General’s Report is presented to His Majesty the Yang di-Pertuan Agong/States Rulers/State Governors to be tabled in Parliament/State Assemblies. The types of audit carried out are: •
Financial Statements Auditing – to certify the annual financial statements submitted by the Federal and State Governments/ Government Agencies as required by law and in accordance with accepted accounting standards. Through this audit, the Auditor General will give his opinion whether the financial statements prepared is true and fair and that records are properly maintained and updated.
•
Compliance Auditing – to determine whether financial management at Ministries/Departments/ Government Agencies is in compliance with the laws and other financial regulations and procedures.
•
Performance Auditing – to appraise whether Government programmes/activities are executed in an effective, efficient and economical manner and achieve their intended objectives.
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annual activity report 2006
Perspective Apart from the audit work carried out as required by statutes, the National Audit Department also undertakes audit/review on the following matters: •
Financial Management of Ministry/Department for the purpose of confirming the Premier Grade Officers.
•
Audit Presence which is conducted in several Responsibility Centers (RC) not covered in the year’s audit plan. Audit Presence is carried out on aspects relating to internal control and management of revenues.
•
Beginning 2003, the National Audit Department carried out ‘Adoption Programmes’ with the objectives of guiding and advising Ministries/Departments/ Government Agencies on ways to improve the quality of their financial management.
In the course of fulfilling his obligations, the Auditor General has full power to request all information and explanation pertaining to the audit. He can have access to any documents and have power to ask any individuals to give statement under oath as well as to empower any officers to inspect and enquire on his behalf. The Auditor General may seek legal advice while performing his duties. All information obtained by the Auditor General is deemed confidential. The National Audit Department has always endeavoured to improve its work quality. This is evident when the Department was awarded with the MS ISO 9001:2000 certifications for the audit of the Financial Statements of Federal Government and Statutory Bodies.The Department is also in the process of obtaining the same certification for the audit of the Financial Statements of State Governments, State Statutory Bodies, Local Councils and Islamic Religious Councils. Through innovation, the Department has also managed to expedite the preparation of Reports and Audit Certification on the State Government’s Financial Statements. All the improvement and innovation achieved thus far is in line with the Department’s quest to strengthen the public sector accountability and integrity.
corporate information
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annual activity report 2006 Federal Territory
Security & Internal Affairs
Research Division
Education
Technical Advisory Service Branch
Management & Company
Various Ministries/ Deparments II
Defence
Coordination & Information Management Branch
National Audit Academy
Income Tax
Health & Society Development
Agriculture & Agro-based Industry
Public Works
Finance
Information Technology & Communication Division
Customs & Transport
Various Ministries/ Deparments 1
AUDIT SECTOR
SECTOR
Management Division
DIRECTOR
FEDERAL GOVERNMENT
DIRECTOR
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CORPORATE MANAGEMENT
DEPUTY AUDITOR GENERAL (Federal)
AUDITOR GENERAL
Terengganu Pahang
Johor Selangor
Pulau Pinang
Perlis
Melaka
Negeri Sembilan
Kelantan
Sarawak
Perak
Kedah
Sabah
State Government Audit Sector
Coordination Unit
DEPUTY AUDITOR GENERAL (State)
DIRECTOR
Finance IV
Finance III
Finance II
Finance 1
Finance Branch
AUDIT SECTOR
Social IV
Social III
Social II
Social 1
Social Branch
FEDERAL STATUTORY BODIES
Organisation Chart
Profile Of The Auditor General Tan Sri Dato’ Setia Ambrin bin Buang Auditor General of Malaysia Tan Sri Dato’ Setia Ambrin bin Buang was born on 24 March 1949 in Kampung Baru, Kuala Lumpur. He joined the Public Service in 1971 upon graduation with a Bachelor Degree in Economics (Hons.) from the University of Malaya. His career began as an Assistant Secretary, Finance and Administration Division, Ministry of Trade and Industry. Other positions held by him during his tenure in the Ministry from 1971 until 1979 were as Assistant Director, International Trade Division; Private Secretary to the Minister of Trade and Industry; and Deputy Director, Industries Division. In 1979, Tan Sri Dato’ Setia Ambrin continued his study in Masters of International Business at the University of South Carolina, United States of America. Upon his graduation in 1981, he resumed his service at the Ministry of Trade and Industry as Deputy Director of Small Industries Division. From 1982 to 1987, Tan Sri Dato’ Setia Ambrin was seconded to the Malaysian Timber Industry Board (MTIB) as its Marketing Director and subsequently as its Deputy Director General. From 1987 until 1991, he was transferred to the National Institute of Public Administration (INTAN) as Head of the Economic Administration Centre and was subsequently promoted as INTAN’s Deputy Director. Tan Sri Dato’ Setia Ambrin served in the Malaysian Embassy, Tokyo, Japan as Minister for Economic Affairs and Deputy Chief of Mission from 1991 to 1995. Upon his return to Malaysia in 1995, Tan Sri Dato’ Setia Ambrin was appointed as Senior General Manager (Administration and Finance) of KLIA Berhad which is the developer of the construction of the Kuala Lumpur International Airport. Tan Sri Dato’ Setia Ambrin returned to Government service when he was appointed as the Selangor State Secretary from 1999 to 2001. He was later appointed as Secretary General, Ministry of Education from 2001 until 22 February 2006. On 23 February 2006,Tan Sri Dato’ Setia Ambrin was appointed as the Auditor General of Malaysia. Tan Sri Dato’ Setia Ambrin is a member of the Selangor Royal Council and the Board of Directors, Malaysian Institute of Integrity. He has previously served as a member of the Board of Directors, University of Multimedia, University Tenaga Nasional and Open University Malaysia; former Deputy President, UNESCO National Committee and a past Board Member of the Multimedia Development Corporation.
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corporate information
In recognition of his services and contributions, Tan Sri Dato’ Setia Ambrin was conferred the following honours and decorations: Kesatria Mangku Negara (KMN), Darjah Paduka Mahkota Selangor (DPMS), Panglima Setia Mahkota (PSM) which carries the title Tan Sri and Darjah Dato’ Setia Sultan Sharafuddin Idris Shah (SSIS) which carries the title Dato’ Setia.
Top Management
Dato’ Azizah bt Haji Arshad Deputy Auditor General (Federal) Dato’ Azizah bt Haji Arshad was appointed as the Deputy Auditor General (Federal) in 2001. She has been with the National Audit Department for 30 years. She has a Masters in Public Financial Management from the American University, Washington DC, USA and a BA (Hons.) in Economy and Management from Universiti Kebangsaan Malaysia. She received the following awards and decorations: Pingat Johan Mangku Negara (JMN), Dato’ Paduka Mahkota Perak (DPMP) and Ahli Mangku Negara (AMN).
14
Haji Anwari bin Suri Deputy Auditor General (State) Haji Anwari bin Suri was appointed as the Deputy Auditor General (State) in 2006. He has been with the Department for 26 years. He holds a Masters in Business Administration (Management) from Universiti Kebangsaan Malaysia and a Bachelor Degree in Economics (Hons.) from the University of Malaya. He received the following awards and decorations: Johan Setia Mahkota (JSM), Ahli Setia Negeri Sembilan (ANS), Ahli Mangku Negara (AMN) and Pingat Khidmat Cemerlang Masyarakat (PMC).
annual activity report 2006
Top Management Boon Jon Lin Director, Federal Statutory Bodies Audit Sector Mr. Boon Jon Lin was appointed as Director, Federal Statutory Bodies Audit Sector in 2002. He has been with the Department for 30 years. He has a Bachelor Degree in Economics (Hons.) from the University of Malaya. He was conferred the Johan Setia Mahkota (JSM) and Ahli Mangku Negara (AMN).
Haji Mustapha bin Naina Maricar State Audit Director, Sabah Haji Mustapha bin Naina Maricar was appointed State Audit Director, Sabah in 2002. He has been with the Department for 29 years. He has a Masters in Business Administration from the Eastern Illinois University, USA, a Bachelor Degree in Business Administration from the Monmouth College, Illinois and a Diploma in Business Studies from Mara Institute of Technology, Malaysia. He was conferred with the Ahli Setia Darjah Kinabalu (ASDK) and Ahli Mangku Negara (AMN). Mustafa bin Haji Saman Director, Corporate Management Sector Mr. Mustafa bin Haji Saman was appointed as Director, Corporate Management Sector on 15 March 2006. He has been with the National Audit Department for 26 years. He has a Masters in Business Administration from the Dubuque University, Iowa, USA and a Bachelor Degree in Economics (Hons.) from the University of Malaya. He was conferred with Darjah Gemilang Bintang Kenyalang – Pegawai Bintang Kenyalang Sarawak (PBK).
Hamdan bin Ahmad Director, Federal Government Audit Sector Mr. Hamdan bin Ahmad was appointed as Director, Federal Government Audit Sector in 2005. He has been with the National Audit Department for 26 years. He has a Masters in Social Science (Acc. & Dev. Finance) from the University of Birmingham, United Kingdom and a Bachelor Degree in Economics (Hons.) from the University of Malaya.
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corporate information
Ong Swee Leng State Audit Director, Sarawak Ms. Ong Swee Leng was appointed as State Audit Director, Sarawak in 2006. She has been with the National Audit Department for 27 years. She has a Bachelor Degree in Accounting (Hons.) from the University of Malaya.
Department’s Strategic Planning 2005 – 2007 TARGET 1
To Enhance the Quality of Audit Work
Strategy I
Quality Audit Standard Assurance
Strategy II
Efforts to Enhance Auditing Approach
Strategy III
Towards Excellent Work Quality
TARGET 2
To Improve the Advisory Services
Strategy I
Compliance with Procedure
Strategy II
Improving Knowledge and Advisory Service Technique
TARGET 3 Strategy I
TARGET 4
To Enhance the Knowledge of ICT Restructuring and Re-Engineering
To Enhance the Quality of Human Resource Management
Strategy I
Effective Human Resource Management
Strategy II
To Provide Effective Training Programme
TARGET 5 Strategy I
TARGET 6 Strategy I
To Strengthen Working Culture To Implement Total Quality Management (TQM) ) To Improve the Quality of Financial Management of the Department To Enhance the Accountability Level of Financial Management at Headquarters and State Branches
TARGET 7 16
Strategy I Strategy II
TARGET 8 Strategy I
annual activity report 2006
To Improve Service Delivery System To take Immediate Action on the Needs of Auditees in Accordance with the Audit Act 1957 To Improve the Quality of Service Delivery and Information System
To Create Better Surroundings To Improve the Quality of the Workplace
Auditor’s Code of Ethics The Auditors Code of Ethics was issued as a guide to all Audit personnel in accordance with the aim to upgrade the Department’s performance and professionalism in line with its functions to enhance accountability in the management of public fund.
Quality Assurance
Self Discipline
Professionalism
Due Professional Care
Auditor’s Code of Ethics
Good Governance
Integrity
Independence, Fairness and Justice
Conflict of Interest
Confidentiality
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corporate information
Involvement In Outside Activities
Internal Control & Departmental Meeting Inspectorate The Inspectorate Taskforce of the National Audit Department was established in accordance with Treasury Circular No.9 of 2004 with the objective of ensuring that internal controls are adequate to create a transparent, clean, efficient and trustworthy financial and administrative system in the Department. The taskforce carried out inspection of financial and management system to ensure:
• The existence of internal control in the financial and administration management system. • Financial, administration and resource management records are fully maintained and managed according to regulations. • Fixed assets and inventories are controlled, recorded and updated according to procedures. • All circulars, manuals and instructions issued by Central Agencies and Headquarters are complied with and implemented. • A clean and conducive working environment. In 2006, the Inspectorate Taskforce conducted audits at the Management Division in Headquarters, five branches under the Federal Government Audit Sector and the State of Johor Audit Branch: Date 5-7 April 2006
Department/Branch Ministry of Defence Audit Branch
12-14 April 2006
Ministry of Works Audit Branch
9-11 August 2006
Inland Revenue Board Audit Branch
16-18 August 2006
Ministry of Agriculture & Agro Based Industry Audit Branch
23 May – 23 June 2006 6-8 December 2006 18-22 December 2006
Management Division, NAD Headquarters The Federal Territory of Labuan Audit Branch Johor State Audit Branch
Departmental Meeting The National Audit Department held Management and Committee Meeting every month or on scheduler basis as directed. This was to ensure that the Department’s Annual Plan was implemented efficiently and the objectives achieved as well as to strengthen the administration of the Department. Meeting Management Meeting 18
Financial Management And Accounts Committee Meeting Integrity Management Committee Meeting Auditing & Accounting Standards Committee Meeting Departmental Joint Council Meeting
annual activity report 2006
Frequency 13 4 3 4 3
Committee Involvement The Departmental involvements in Committees at the Federal Government level are as follows: • • • • • • • • • • • •
National Action Council Special Cabinet Committee on Management Integrity Liaison Committee between Federal and State Governments Electronic Government Steering Committee Integrity Management Committee, Prime Minister’s Department Board of Directors, Institute of Integrity Prime Minister’s Quality Award Panel - MAMPU Cabinet Task Committee on Management Integrity Joints Departmental Council JPM Competency Evaluation Board – PM’s Department IT Technical Committee (JTIT) Steering Committee of the Standard Accounting Systems for Government Agencies (SAGA)
The Committees involved at state level are as follows: State Development Committee Sarawak Development Project Monitoring Committee State Government Integrity Committee Government IT and Internet Committee State Public Complaint Committee State Government Financial and Budget Committee
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corporate information
• • • • • •
20
annual activity report 2006
sektor pengurusan korporat
main activities Corporate Management Sector National Audit Academy
Federal Government Audit Sector State Government Audit Sector Federal Statutory Bodies Audit Sector
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annual activity report 2006
22
laporan aktiviti tahunan 2006
sektor pengurusan korporat
corporate management sector
INTRODUCTION The Corporate Management Sector is a support sector to the Federal Government Audit Sector, the State Government Audit Sector and the Federal Statutory Bodies Audit Sector. This Sector comprises of the Management Division, Information and Communication Technology Division, Research Division, National Audit Academy, Coordination and Information Management Branch and Technical Advisory Service Branch. The main focus of the Corporate Management Sector is on the following matters: • • • • •
To improve the quality of delivery system to every sector; Effective leadership to support the success of the Department and its employees; To maintain and develop human resource capabilities in order to achieve continuous professional growth; To improve and nurture leadership, productivity and negotiation skills of employees; and To identify potential leaders as successor, catalyst and prime movers.
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annual activity report 2006
Management Division Management Division comprises of 2 branches, i.e. the General Administration and Finance Branch and the Human Resource Management Branch. The main functions of this Division are: • • • •
General administration of the Department which includes management of assets, inventories, vehicles, disposals, mailings, filings and others in compliance with the Public Services Development Circulars; Managing Department’s finances which include budgeting, operating and development expenditures, Trust Accounts, Revenue Accounts and procurements; Managing human resource which include terms of service, retirement, promotion and others; and Conducting departmental and service examinations.
GENERAL ADMINISTRATION AND FINANCE BRANCH The main functions of the General Administration and Finance Branch encompasses matters pertaining to general administration, development and finance of the Department. The General Administration Unit is responsible for the general administration, office maintenance and utilisation of office facilities. Meanwhile, the Finance Unit acts as Head Office in liaising with Central Agency such as Treasury, Prime Minister Department, and Accountant General Office, while its second responsibility is to deal with the Federal Territory Accountant General Office Branch in matters pertaining to payrolls, claims, bills payment and preparation of expenditure performance report. In addition, the Finance Unit also acts as the Development Secretariat in coordinating the Department’s development project machinery. GENERAL ADMINISTRATION UNIT Management of Departmental Assets/ Inventories and Stores The Department had acquired an ICT-based Asset and Store Management Systems known as MyAsset and MyStor to manage and control assets and inventories as well as stores/stocks of office supplies. The General Administration Unit had completed the updating of assets/inventories records in the Auditor General office, Deputy Auditor General (Federal) office, Deputy Auditor General (States) office, Corporate Management Director office and the Management Division office. This system will be extended to all users at every Sector. 24
In relation to the above, among the tasks that have been carried out were as follows:• • • •
Keying in data for all assets and inventory records, Labeling of assets and their locations, Generating list of assets according to location and officer’s name, and Observing and monitoring system utilisation.
annual activity report 2006
Department Security The National Audit Department had established an Emergency Response Team (ERT) in May 2006 and every Sector/Branch/Unit in Headquarters had appointed two representatives each as Floor Marshal and Assistant Floor Marshal. Activities conducted in 2006 were as follows: • •
•
•
Briefings and meetings held 3 times in 2006. A talk on ‘Fire and Building Security’ by Mr. Emi bin Taihin, representative from the Fire and Rescue Department, Putrajaya on 26 July 2006. ‘Preparation for Fire Emergency’ training at the Fire and Rescue Department, Putrajaya, attended by Floor Marshals and Assistant Floor Marshals on 8 August, 2006. Supply of security equipments to every floor.
corporate management sector
Management Division FINANCE UNIT Operating Expenditure Performance In 2006 the operating expenditure allocation approved for the National Audit Department was RM 87.4 million. Of that amount, RM 85.9 million (98%) had been spent, an increase of RM 11.8 million (15.9%) from the amount spent in 2005.
Management Expenditure for the Year 2006 2005 ITEM
ALLOCATION (RM)
2006
EXPENDITURE (RM)
ALLOCATION (RM)
EXPENDITURE (RM)
Emolument
46,820,900
46,720,373
50,074,300
49,753,060
Service and Supply
26,195,000
25,674,876
33,975,100
32,880,507
1,700,000
1,684,545
3,291,600
3,174,736
8,000
54,420
54,000
53,175
15,000
11,400
35,000
30,869
74,738,900
74,145,614
87,430,000
85,892,347
Assets Grants and Fixed Payment Other Expenditures TOTAL
Development Expenditure Performance Under the Ninth Malaysia Plan, the National Audit Department was allocated RM4.54 million for its development projects i.e. the National Audit Academy and Computerization Project.
Development Expenditure for the Year 2006 ALLOCATION (RM)
EXPENDITURE (RM)
National Audit Academy
2,250,000
1,444,258
Computerization Project
2,286,000
2,089,570
4,536,000
3,533,828
TOTAL
National Audit Department Research and Expertise Training Trust Account The National Audit Department Research and Expertise Training Trust Account was established to account all contributions and receipts approved to this account to be used for activities related to training, research, continuing professional studies and course participant’s welfare. The account’s opening balance in 2006 was RM 165,170. Total receipts amounted to RM 78,806 and RM 6,495 was spent for purchases of training materials. The account’s closing balance for 2006 was RM 237,481.
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main activities
PROJECTS
Management Division Office Renovation and Purchase of Vehicle The National Audit Department had renovated the offices of the state of Sarawak Audit Branch, the National Audit Academy and the Technical Support Advisory Unit.The Department also purchased 2 buses (25 seater), four units of 4-wheel drive vehicles and one motorcycle. The allocation and expenditure details are as below: Office Renovation
State
Purchase of Vehicle
Allocation
Expenditure
Allocation
Expenditure
Headquarters
376,770
265,269
500,000
492,000
Sarawak
191,380
191,380
397,000
397,000
Sabah
-
-
198,500
198,500
Total
568,150
456,649
1,200,000
1,087,500
State Audit Branch Offices’ Construction Projects Under the Ninth Malaysia Plan, the Government had approved an allocation of RM50 million to build the National Audit Department’s branch offices.The Selangor Audit Branch is allocated RM15 million,Terengganu RM10 million, Perak RM10 million and Pahang RM 15 million. The Department had also been approved allocation under the Private Finance Initiative (PFI) amounting to RM53 million for the construction of office buildings of which Kedah Audit Branch is allocated RM17 million, Kelantan RM18 million and Negeri Sembilan RM18 million. At the end of 2006, the Corporate Management Sector had vigilantly carried out land acquisition and planning construction of building in collaboration with the states involved. It is envisaged that the National Audit Department plan of completing its new office infrastructures to create better working environments will be achieved during the Ninth Malaysia Plan. THE HUMAN RESOURCE MANAGEMENT BRANCH The Human Resource Management Branch is responsible for the management of personnel affairs of the National Audit Department. Among its main activities are recruitment, confirmation, internal transfers, promotions, retirements, disciplinary matters, counseling, Excellent Service Awards event, salary adjustments and study advancement to Diploma, Degree, Masters and PhD levels. In 2006, out of a total of 1,613 posts approved for the National Audit Department, 1,480 posts were filled.
Number Of Staffs According To Service Categories 26 Category
Approved
Filled
Vacancies
7
7
-
275
251
24
Support Group
1,331
1,222
109
Total
1,613
1,480
133
Public Sector Premier Grade (JUSA) Management & Professionals
annual activity report 2006
corporate management sector
Management Division Activities of Human Resource Management Branch Description
No. of Officer/Staff
Recruitment
168
Confirmation of Employment
86
Transfer
42
Promotion
168
Retirement
29
Disciplinary Action
2
Counseling
3
Excellent Service Award
108
Salary Increment
58
Diploma, Degree And Masters Programme
32
EXAMINATION UNIT The Examination Unit is responsible for conducting departmental and service related examinations for officers and staffs of the National Audit Department. The number and type of examinations conducted in 2006 were as below: Service Examination (Probationary Officer) No. of Candidates Date
1/2006
6-8 June 2006
2/2006
12 - 15 December 2006
Grade
Part II Constitutions & Laws
Part III Accounting
Part IV Auditing
W41
4
9
8
W27
20
13
18
W41
2
6
4
W27
12
15
20
main activities
No.
27
Management Division Special Examination for Promotion To Assistant Auditor Service Scheme Grade W27 No. of Candidates Date
Section A Constitution, Laws, Financial Regulations & Administration
Section B Accounting
Section C Auditing
6 - 8 June 2006
21
20
27
Competency Level Assessment Examination No. of Candidates Date
6-8 June 2006
Grade
Part I General Competency
Part II Specific Competency
W41
98
136
W32
75
79
W27
329
379
W22
22
20
W17
47
62
Competency Level Assessment Course
28
Grade
Date
No. of Candidates
W52
30 July - 5 August 2006
15
W44
12 - 20 August 2006
30
W36
12 - 19 August 2006
27
W26
17 - 23 December 2006
7
Throughout 2006, the National Audit Department had conducted 6 Departmental Examination’s Questions Drafting Panel meetings, 2 Competency Level Assessment Examination’s Question Drafting Panel meetings and 4 Department Examination Panel meetings.The roles of the Department Examination Question Drafting Panel are important in the implementation of the Malaysian Remuneration System in the Department. The major responsibility of the Panel is to appoint Examination Question Drafting Panel; to determine the level and quality; and to approve the examination questions and the answer scheme prepared; to appoint examinee; to determine the required passing marks; to prepare Examination Results Report and Examination Analysis to be tabled to the Department Examination Panel meeting; and to report on cases of examination infringement to the Department Examination Panel. The result of Competency Level and Evaluation Examination has to be tabled to the Departmental Examination Panel as well as to the Prime Minister Department Competency Level and Evaluation Panel for approval.
annual activity report 2006
corporate management sector
Research Division Research is very important in the development of an organization. Even though Research Division is considered as a supporting unit but through comprehensive and authentic research, it plays significant roles in the improvement of service delivery effectiveness to auditees and stakeholder.This will eventually raise the Department’s corporate image. Total commitment from top management to the support group will enable the mission, vision and strategies being planned and shared to ensure the success of research activities. In 2006, the Research Division had conducted several researches, reviewed Guidelines, prepared reports, managed international relations, handled visits by foreign delegations as well as managed and monitored the Private Audit Firms which had been awarded audit works contracts by the Department. Apart from that, the Research Division was also secretariat to some Department’s activities such as the National Audit Convention, Premier Dinner Gala, Symposium on Environmental Governance and National Audit Day. Brief notes on activities carried out by the Research Division throughout 2006 are as follows: Preparing and Reviewing Department’s Guidelines The Division is responsible for the preparation of guidelines on new auditing techniques and procedures to improve quality of auditing. Besides that, guidelines currently used are also reviewed to ensure they are updated in line with current developments. In 2006, the Division collaborated with the State Government Audit Sectors to issue 3 Guidelines as follows: • Auditing Guidelines on Financial Statements of the Islamic Councils and Other Islamic Religious Institutions; • Auditing Guidelines on Financial Statements of the State Statutory Bodies.; and • Auditing Guidelines on Financial Management and Activities of the Forest Department. Reports Preparation A new assignment undertaken by this Division is to study the Parliament official verbatim record of debates (Hansard) to identify any significant issues related to audit. The official statement abstract report can be used as reference by audit officers in various sectors so that auditing can be focused on relevant and current issues. In addition, this Division prepared several reports as follows: Report of the Department’s Senior Officer Conference in 2006; Summary Report on Shari’a Auditing in Malaysia; Report on the Terms Used When Issuing Audit Opinion; Comparative Report on Supervision of Audit Profession that is practiced in the United Kingdom, the United States of America, South Africa and Malaysia; • Status Report on Audit Quality Management System (AQMS), 7th ASOSAI Research Project; • Paper on the status of Implementation of Environmental Audit in the Department; and • Paper on the status of the establishment of the Malaysian Board of Audit/Malaysian Institute of Auditor.
Management of Private Audit Firms (PAFs) The management of PAFs was taken over from the Federal Statutory Bodies Audit Sector in 2002. As at 2006, there were 56 PAFs assigned to audit the accounts of 95 Federal Statutory Bodies, 116 State Statutory Bodies and 137 Local Authorities. The responsibilities pertaining to managing PAF are as follows: • Preparing proposal paper for the appointment and re-appointment of PAF to be submitted to the Appointment Committee upon receipt of applications from the Federal Statutory Bodies Audit Sector, Federal Government Audit Sector and State Government Audit Sector; • Preparing contract document for the appointment of PAF;
29
main activities
• • • •
Research Division • Monitoring PAFs performances as input to the PAFs Appointment Committee. PAFs is monitored on aspect with regards to adherence to contract terms and conditions, audit implementation, manpower and officers’ competency; • Updating PAFs profile from time to time; and • Organizing annual meeting between the Auditor General and PAFs to further improve the quality of auditing and management of PAFs. List of Studies Conducted Amongst the studies conducted in 2006 were Perception of the National Audit Department Strategic Plan for the period 2005 – 2007, Usage and Review of the ICT Auditing Guideline and Review of the Audit Act 1957. No.
Studies Title and Synopsis Perception of the National Audit Department Strategic Plan for the period 2005 – 2007
1.
This study evaluated the perception of the Department’s officers and staffs towards the strategic planning document including the Department’s Vision, Mission, Objective, Client’s Charter, Corporate Culture and Strategic Planning. Respondents consisted of staff from various positions ranging from grade W17 to W54. This study showed that the perception of the Department’s officers and staffs was good on all aspects being evaluated. Briefings and discussions need to be carried out to ensure that all level of officers and staffs understand the Department’s strategic plan and an indicator need to be developed to measure the achievement of the strategic plan objectives.
2.
Study on the Usage and Review of the ICT Auditing Guideline The level of understanding of the Department’s officers with regards to the ICT Auditing Guideline is important to ensure they are able to use the Guidelines to conduct ICT Auditing effectively. A total of 151 officers and staffs from Grade W17 to W54 were involved in the study. Overall, the level of understanding amongst officers and staffs were still unsatisfactory as the Guideline was written in English and descriptions on several aspects of ICT auditing were very brief. The Guideline will be reviewed and updated in line with the ICT development and expansion.
3.
Revision of the Audit Act 1957 This meta-analysis study was to compare the Audit Act 1957 of Malaysia with the Audit Acts of Supreme Audit Institutions of the United Kingdom, New Zealand, Australia and Canada. The study focused on the duties, types of auditing, power of the Auditor General, confidentiality and audit report. The result from the study would enhance the existing contents of the Audit Act 1957 to increase the Department’s credibility and ability to improve accountability of public sector financial management.
30
annual activity report 2006
corporate management sector
Information and Communication Technology Division
• • •
To develop and implement application system effectively; To increase the efficiency and security of internal communication; and To enhance computer skills and knowledge among users and to develop experts in information technology auditing to enable them to conduct effective audit in the ICT environment.
•
Purchased 1,288 units of Dewan Eja (Malay spell checker) software as an effort to improve the quality of writing.
•
Procured additional PCs and Notebooks.
•
Prepared Multimedia Presentation in conjunction with the Ahmad Noordin Auditorium Naming Ceremony, Environmental Governance Symposium, and Launching of the Audit Guidelines during the Quality and National Audit Day Celebration.
•
Procured Video Conferencing equipments. The facilities were used during the following events in 2006: • Environmental Governance Symposium at the National Audit Academy on 4 December 2006. • Management Meeting on 6 December 2006 which was held live through video conferencing between the Headquarters and Audit Branches in the states of Penang, Kelantan, Johor, Sarawak, Sabah and the NAA.
•
Developed and updated the Computer Assisted Audit Techniques and Tools (CAATTs) Guidelines to be used by audit officer:
2006 Activities • Produced the National Audit Department’s Information Technology Strategic Planning (ISP) Document for the year 2006 to 2010. •
•
•
•
Organised the NAD Annual ICT Conference which discussed Departmental computerization and ICT Audit issues. Proposed assistance relating to the creation of Computer Technician post at State Audit Branches. A total of 12 new FT17 Technicians joined the State Audit Branches in 2006. Broadening access to the department’s intranet, Audit*Net network for audit officers by adding 23 new network connections in the State Treasury Audit Sections and the Accountant General Office branches in states. The broadband capabilities were upgraded from 256Kbps to 384Kbps in 16 existing locations. Equipped the Department with: o Server for the Integrated Campus Management System (ICMS) in the National Audit Academy (NAA). o MyAsset and MyStor System for assets and stores management. o ILMU (Integrated Library Management Utility) System for managing the NAD Library.
New Guidelines on: • SPEKS (Standardised State Government Computerised Accounting System) Vote Book Module. • SPEKS Salary Module. Updated Guidelines on: • Employee Provident Funds (EPF) Contribution version 1.2. • SPEKS Financial Statement version 1.2. •
Made preparation for changes from Branch Accounting Systems (BAS) to Government Financial Management Accounting Systems (GFMAS) by the Accountant General Office. The division also provided advisory service to enable access to GFMAS database when auditing the Federal Government Accounts.
31
main activities
The Information and Communication Technology (ICT) Division is responsible for planning, equipping as well as managing the computer system infrastructure of the National Audit Department (NAD). Apart from that, the Division also provides services to enhance efficiency and effectiveness in ICT audit. The Division is made up of two branches namely the ICT Audit Advisory Service Branch and the Development and Operational Branch. Other responsibilities of the Division are:
Coordination & Information Management Branch The Coordination and Information Management Branch was established to coordinate activities within the National Audit Department’s Sectors/Divisions/Branches and also between the Department and external organizations. In addition, this Branch also acts as an information provider to Sectors/Divisions/Branches in the course of doing auditing and management. Publication of the Department’s Annual Activity Report The Annual Activity Report is an annual report published by the Department which highlights the Department activities during the year. Besides for internal distribution, the report is also distributed to the Members of Parliament/State Assemblies; members of the Federal and State Public Accounts Committees; Head of Ministries/Departments/ Government Agencies; and Ministries/ Departments/ Government Agencies as well as Institutions of Higher Education libraries. Publication of the Audit Bulletin In 2006, the National Audit Department for the first time published its own bulletin, known as the Audit Bulletin, which is circulated biannually in June and December. The first bulletin was published in June 2006 and launched by the Auditor General. The second bulletin was published and distributed in December 2006 to coincide with the National Audit Day on 5 December 2006.
32
The objective of publishing the Audit Bulletin is to be an information channel to Audit personnel as well as a media to deliver messages to auditees. Amongst others, the Audit Bulletin shares guides on various aspects such as financial management, construction of projects, etc.The Audit Bulletin is circulated to the Ministers; Members of Parliament/State Assemblies; members of the Federal and States Public Accounts Committee; Head of Ministries/ Departments/ Government Agencies; Ministries/ Departments/ Government Agencies and Institutions of Higher Education libraries; and Department’s personnel and retirees.
annual activity report 2006
Maintenance of the National Audit Department Website Contents The contents of the Department’s website are updated from time to time with the cooperation of the Information and Communication Technology Division. Updating is done on the following: •
The Bulletin Board which highlight the Department’s current information/activities;
•
Information about the Department which encompasses the Auditor General profile, working papers presented, involvements at international levels, the Department’s Mission, Vision and Client’s Charter, the Department Strategic Plans, Auditing Standards, Auditors’ terms of Service and Code of Ethics and Directory of Audit Officers;
•
Legal Section pertaining to The Auditor General’s Institution;
•
Publication Section which covers the Audit Bulletin, Annual Activities Report and the NAD profiles;
•
Audit Report’s Section containing the Federal Government, Federal Statutory Bodies and State Government Audit Reports;
•
Media Section which highlights media coverage/paper cuttings relating to the Department and interviews with The Auditor General;
•
Section which shows movement of Audit Officer;
•
Highlight of events happening at Headquarters, State Audit Branches and the National Audit Academy, which also includes activities of the Quality Control Circles (QCC), Audit Club and PUSPANITA.
corporate management sector
Coordination & Information Management Branch Executive Talks The National Audit Department always encourages its officers/staffs to enhance their knowledge in various fields. Hence, the Department organizes Monthly Executive Talk covering various fields such as auditing, accounting, management, religion, general knowledge and current issues as a means of increasing the general knowledge of audit personnel. Throughout 2006, a total of 10 talks were conducted. Visit from local Institutions Throughout 2006, the Departments received 7 visits from students of Institutions of Higher Education and officers from other Government Departments/Agencies with the objectives to share knowledge in the field of auditing and the roles of the National Audit Department.
Library The NAD Library increased its collection of books in the field of auditing, accounting, management, computers, and psychology and also books for general reading which includes fictions. Beginning 2006 the Library started using the ILMU (Integrated Library Management Utility) System to manage the borrowings and returning of books. The overall collection of books in the Library until December 2006 is 7,214 copies (excluding magazines which are received every year). The National Audit Department Choir The Coordination and Information Management Branch coordinates the NAD Choir in terms of logistic and preparation for performances. In 2006, the NAD Choir made performances in the following ceremonies:
• • • •
National Audit Convention on 14 February, 2006; Audit Gala Night held in commemoration of the 100th Years’ Celebration of the National Audit Institution on 14 February, 2006; Monthly Assembly held at the Prime Minister Department on 8 May 2006; The NAD Quality Day and Excellent Service Award ceremony on 9 November 2006; Symposium on Environmental Governance on 4 December 2006; and The National Audit Day on 5 December 2006.
Others Activities • Secretariat to the Department Top Management Meetings •. Secretariat to the Corporate Management Sector Meetings • Secretariat to the Quality Control Circles (QCC) Steering Committee • Secretariat to the MS ISO 9001:2000 Management Review Meeting • Secretariat to the Accounting Standards Committee • Secretariat to meeting between the Auditor General and Public Sector’s Heads of Internal Audit.
33
main activities
• •
Technical Advisory Service Branch Technical Advisory Service Branch main responsibility is to provide advisory services and trainings to audit team in conducting construction projects audits.This Branch also provides advisory services pertaining to the Department’s own development projects and renovation of Audit offices. The services provided encompass various aspects inclusive of Civil Engineering, Building and Administration of Construction Contracts. In 2006, the branch assisted the other sectors in conducting performance audit on construction project as well as assisting the National Audit Department in its own development projects as follows:Performance Audit – Construction Project No.
Audit Sector/Unit
No. of Projects
1
Federal Government Audit
7
2
State Government Audit
10
3
Federal Statutory Bodies Audit
1
4
Internal Audit Unit
2
Total
20
The Department’s Development Project No.
Venue
No. of Projects
1
National Audit Department Head Office
3
2
National Audit Department State Branch
4
3
National Audit Academy
13
Total
34
annual activity report 2006
20
sektor pengurusan korporat
national audit academy INTRODUCTION The National Audit Academy was officially launched on 24 November 2005 to cater the training needs of the National Audit Department. The training policy and programmes are formulated to ensure it is in line with one of the targets set in the Department’s Strategic Plan, i.e. “ To provide effective training programmes”. Apart from that, the training programme is also formulated to comply with Service Circular No. 6 of 2005 which requires that every staff attend a minimum of seven days training a year.All courses and trainings at the academy are conducted by 4 schools viz. School of Auditing, School of Accounting, School of ICT and School of Management. NATIONAL AUDIT DEPARTMENT TRAINING VISION Equipped the National Audit Department community with the necessary knowledge and skills to become a prime contributor towards financial management excellence and accountability. NATIONAL AUDIT DEPARTMENT TRAINING MISSION To provide effective training programme for all National Audit Department community and to provide sufficient avenues for them to enhance an excellence working culture.
35
annual activity report 2006
The National Audit Academy Courses Organized by The National Audit Academy In 2006, the National Audit Academy (NAA) successfully conducted 71 courses and workshops involving 2,116 officers and staffs of the National Audit Department. The courses encompassed areas on auditing, accounting, ICT and management. Some of the courses offered were financial statement audits, financial management audits, performance audits, contracts audits, land management audits, the Government revenue audits, ICT Awareness and Controls, basic Audit Command Language (ACL), basic accounting, introduction to the Financial Reporting Standards (FRS), Competency Level Assessment courses, etc. The duration of the courses was between 3 and 14 days and participants were provided with meals and accommodation at the NAA hostels. Apart from offering courses to staffs from other agencies, the NAA also conducted courses specifically for some agencies. Courses Conducted For Year 2006 Course
No. of Courses
No. of Participants
Auditing
29
838
Accounting
12
385
ICT
10
230
Management
20
663
71
2,116
Total
Courses Conducted by Outside Agencies Besides attending courses organized by NAA,Audit officers and staff were also sent to attend courses, seminar and workshop organized by outside agencies. Seminar and workshop selected depended on its suitability and relevancy in the field of auditing, ICT, accounting and management. Among the seminars attended by the Audit officers and staff were Workshop on Fraud Prevention, Forensic Auditing, IT Audit and Governance, Internal Audit Conference, Corporate and Business Writing Skills, Kuala Lumpur Islamic Finance Forum, etc. In 2006 a total of 131 NAD’s officers and staffs attended 53 courses/seminars/workshops organized by outside agencies. Seminars/Workshops Organized by External Agencies Attended by NAD Personnel
36
annual activity report 2006
Category of Officers
Course/Seminar/Workshop
Premier Grade ‘C’
3
Grade W48 to W54
48
Grade W41 to W44
55
Grade W17 to W36
25
Total
131
corporate management sector
The National Audit Academy The Naming Of The Ahmad Noordin Auditorium Ceremony On 9 November 2006, a ceremony was held to commemorate the naming of the National Audit Academy Auditorium as the Ahmad Noordin Auditorium. The name was chosen to acknowledge contributions made by the late Tan Sri Ahmad Noordin bin Zakaria during his tenure as The Auditor General of Malaysia from 1975 to 1986. The ceremony was officiated by the Auditor General, Tan Sri Dato Setia Ambrin Bin Buang. Among the guests who attended the ceremony were the late Tan Sri Ahmad Noordin’s wife, Puan Sri Fatimah Hashim and family members, former Auditor General Tan Sri Dr. Hadenan Bin A. Jalil and some former National Audit Department senior officers who served under the late Tan Sri Ahmad Noordin. NAA as Course Provider under Malaysian Technical Cooperation Programme (MTCP) The National Audit Academy was given the approval by the Economic Planning Unit of the Prime Minister Department on 12 December 2006 to organise Short Term Courses under the Malaysian Technical Cooperation Programme (MTCP) beginning 2007. Under this programme the Malaysian Government will bear all expenses of the participants from 25 developing countries to attend the course which will be held at the National Audit Academy. Two courses were identified to be conducted in 2007 and participants from several countries will be invited to attend the courses. Date
Performance Audit Course
May 2007
ICT Audit Course
November 2007
Countries To Be Invited Azerbaijan, Bangladesh, Bhutan, Cambodia, China, Georgia, India, Indonesia, Iran, Iraq, Kazakhstan, Kyrgyzstan, Maldives, Mauritius, Mongolia, Myanmar, Nepal, Pakistan, Papua New Guinea, The Philippines, Sri Lanka, Thailand, Turkey,Vietnam,Yemen.
The objectives of organizing courses under this programme are to strengthen regional ties in public sector auditing and to help improve public sector accountability in participating countries. The assistance provided under this programme will also enable NAD’s officers to meet and share knowledge and experiences on auditing matters with officers from participating countries. It is also hoped that through organising courses under the programme will help to promote the National Audit Academy as a Centre of Excellence in the Asian region.
37
main activities
Course
38
annual activity report 2006
sektor audit kerajaan persekutuan
federal government audit sector INTRODUCTION The Federal Government Audit Sector is responsible to audit and report to Parliament whether accountability exist in the management of public funds and activities of the Federal Government as provided in the Federal Constitution and Audit Act 1957. The audits are conducted on the Federal Accounts as well as the activities of the Federal Ministries/Department. The Sector comprises of 13 branches within Putrajaya and Kuala Lumpur and 13 Federal Audit Section at all the State Audit Branches.
39
annual activity report 2006
Auditing Of the Annual Federal Government Financial Statement The Federal Government’s Public Account Statement which is prepared by the Accountant General Office is certified by the Auditor General and tabled in Parliament in accordance with Section 16(2) of the Financial Procedure Act. The auditing process of the Federal Government’s Public Account Statement is carried out at two levels: i.
Interim Audit Interim Audit is carried out throughout the financial year to certify the accuracy of the Financial Statement. Interim auditing covers two aspects, namely systems audit and transaction audit.
ii. Final Audit Final audit is conducted upon receipt of the Financial Statement from the Accountant General Office. At this stage, reviewing, certifying and analysis of year end balance details of the Balance Sheet, Memorandum of Account Statements and Notes to the Public Accounts are carried out in order to give an opinion on the completeness, accuracy and validity of the Financial Statement. The Financial Statement of the Federal Government for the year ended 31 December 2005 was received from the Accountant General Office on 8 March 2006. An unqualified certificate was issued on 9 June 2006 after the completion of audit. The 2005 Auditor General Report The 2005 Auditor General Report for the Financial Statement and Activities of the Federal Government’s Ministries/Departments was presented to His Majesty the Yang di-Pertuan Agong on 29 June 2006. The Report was tabled in Parliament on 1 September 2006.
40
annual activity report 2006
federal government audit sector
Audit Accomplishments In 2006, the Federal Government Audit Sector conducted the following audits as planned: Audit Activities in 2006
Audit Branch
Performance Audit
Financial Management
Trust Accounts
‘Adoption’ Programmes
Audit Presence
1
Finance
1
2
17
1
-
3
2
Various Ministries/ Department I
4
3
68
1
-
4
3
Security & Internal Affairs
3
2
13
1
-
15
4
Health And Society Development
2
3
37
1
-
-
5
Defence
3
2
3
1
-
3
6
Management & Companies
3
-
-
-
41
-
7
Federal Territory
3
3
8
-
-
2
8
Education
2
2
73
1
-
-
9
Custom And Transportation
2
3
5
1
-
2
10
Works
1
3
5
1
-
1
11
Various Ministries/ Department II
2
3
43
1
-
-
12
Income Tax
2
3
-
-
-
-
13
Agricultural And Agro-based Industry
2
10
7
1
-
11
30
39
279
10
41
41
Total
41
main activities
No.
Financial Management for Premier Grade Officers’ Confirmation
Performance Auditing Conducted In 2006 No. 1.
2.
Audit Branch Finance
Various Ministries/ Department I
Study Title i.
Management of Federal Government’s Arrears.
i.
Management on Construction of Radio Television Malaysia (RTM) Office Complex, Studio And Auditorium, Seremban, Negeri Sembilan. Management Construction Project of the National Youth Skills Institute. Property Management at Foreign Missions, Foreign Affairs Ministry. Creation and Recruitment Process of Public Sector Post, Public Service Department.
ii. iii. iv.
i. 3.
4.
42
Security & Internal Affairs
Health And Society Development
ii. iii.
Management of Issuance And Enforcement Activities of Temporary Work Visit Pass. Management of Traffic Activities of the Royal Malaysian Police (RMP). Management of Procurement Thru Direct Negotiation – Helicopter Mi-171 for the RMP Air Unit (2 units).
i. ii.
Management of Ambulance Services at Government Hospitals/Clinics . Management of Financial Aids to Non-Government Organization’s (NGO’S).
i. ii. iii.
Management of Combat Attire And Equipments at the Army Infantry Corp. Management of Patrol Vessel (PV) Procurement by the Ministry of Defence. Radar Capabilities And Maintenance at RMAF Base and RMAF Air Defence Centre.
5.
Defence
6.
Management & Companies
i. ii. iii.
Management of Indah Water Consortium. National Heart Institute. Multimedia Development Corporation.
7.
Federal Territory
i. ii. iii.
Universal Services Provision Programme. Management of Beautification of Labuan City. Management of Solid Waste By Alam Flora in Kuala Lumpur and Putrajaya.
8.
Education
i. ii.
Preschool Expansion Programme. Management of Community Colleges Activities.
Custom And Transportation
i.
9.
ii.
Management of Revenue Collection Through Custom Information System (CIS). Management of Road Transport Department Enforcement Activities.
i.
Construction Projects of Marine Police Base, Batu Uban, Pulau Pinang.
i.
Management of Working Capital Funds, Department of Entrepreneur’s Development And Cooperative. Storm Water Management And Road Tunnel (SMART).
10.
Works
11.
Various Ministries/ Department II
ii. i.
12.
Income Tax ii.
13.
Agricultural And Agro-based Industry
annual activity report 2006
i. ii.
Management of Tax Payer Information Dissemination by the Inland Revenue Board. Management of Company’s Field Audit by the Inland Revenue Board. Management of Paddy Fertilizer Subsidies, Ministry of Agriculture And Agro Based Industry. Management of Paddy Price Subsidies, Ministry of Agriculture And Agro Based Industry.
federal government audit sector
Coordination of Audit Activities between The Branches of National Audit Department and Internal Audit Units. In 2006, The Auditor General took initiatives to coordinate auditing activities between the National Audit Department’s Branches and Internal Audit Units in Ministries/Departments. Discussions were held between officers of the National Audit Branches and the respecting Internal Audit Units. During the discussions, both parties presented their audit activities which had been completed work still in progress, audit activities to be conducted; the audit scope, issues identified and reported; and problems/needs of branch offices. The objectives of the discussion were to coordinate audit activities in order to avoid duplication of works and issues raised as well as to focus on relevant activities. Auditing at the Malaysian Embassies/High Commission Offices • In 2006, the Federal Government Audit Sector conducted audit on property management and financial management at the Foreign Affairs Ministry and several Malaysian Embassies/High Commission Offices. Property management audit was conducted to determine whether the properties of the Foreign Affairs Ministry especially located at the Malaysian Embassies/High Commission Offices were planned and managed properly and effectively in line with stated objectives. The scope of audit encompassed properties located in Embassies/High Commission Offices which was either built or purchased (including strata unit) for the period from 1957 until 2006. Aspects covered by the audit involved 5 major activities i.e. property acquisition; registration of ownership (safe keeping of original titles); maintenance; usage and security. In addition, financial management audit was conducted on management control; revenues control; expenditures control; management of trust funds and deposit; asset and inventory management including confirmation of cash in hand.
•
Initially, the above two audits were conducted at the Development and Property Section as well as Finance Section of the Foreign Affairs Ministry at Wisma Putra. This was followed by the audit of 9 Malaysian Embassies/High Commission Offices in London (United Kingdom); Paris (France); Brussels (Belgium); The Hague (Holland); Beijing and Hong Kong (China); Jakarta (Indonesia); Singapore and Stockholm (Sweden). The audit works were conducted by 4 teams consisted of 9 officers of various grades.
•
One of the audit team members, Ms. Ang Nai Har, together with officers from the Public Services Department (Pension Division) and the Accountant General Office also attended a meeting with representatives from the Crown Agents Financial Services Limited, United Kingdom and the Malaysian High Commission office, London to discuss various issues relating to pension payments to retirees in the United Kingdom. 43
main activities
•
Implementation of the Government Financial and Management Accounting System (GFMAS) – Updating the MS ISO 9001:2000 Quality Documents The Accountant General Office of Malaysia had been using the Branch Accounting System or BAS for 18 years since 1987. In 2001, the Government approved the Office’s request to replace the system. A review was done on the Federal Government accounting system beginning May 2003. Based on the study it was recommended that a new system should be implemented to enable the Government to operate on an accrual accounting system replacing the current cash basis accounting system. The Government Financial and Management Accounting System (GFMAS) is a new system implemented in the Accountant General Accountant Office to enhance the effectiveness in the management of the Government’s accounting system. The GFMAS application development project was launched on 11 January 2005. GFMAS will replace several existing applications in head quarters and also in branch offices. However, the system will be integrated with e-SPKB (Integrated Financial Management Accounting System) and eProcurement system.The system was implemented throughout all branch offices of the Accountant General Office. In relation with the changes in the accounting system, the National Audit Department must gain the relevant knowledge in order to prevent any delays in their auditing works. The Department must also change the ways and methodology of auditing by making appropriate amendments to the auditing procedures of the Federal Government’s accounts which have been certified by MS ISO 9001:2000. For that purpose, the Federal Audit Sector has taken the following steps:• Cooperated with the Accountant General Office to conduct briefing to the National Audit Department officers especially the Federal Government Audit Sector. • Cooperated with the Accountant General Office to supply computers, equipments and other requirements to Audit officers who is conducting the audit of the Accountant General Office to enable them to have access to the system and information required for auditing. Officers from the ICT Audit Advisory Service Branch were also involved in providing the necessary assistance in providing connections between audit PC and GFMAS server. • Cooperated with the Accountant General Office and vendors to conduct detailed training to all Audit officers involved.
44
• Conducted brainstorming sessions to update the MS ISO 9001:2000 Quality Documents from 19 to 22 September 2006 and 2 October 2006 held at the National Audit Academy, the Finance Audit Branch office and also at the National Audit Department headquarters in Putrajaya. The sessions were attended by officers who are directly involved in the audit of Federal Government’s Account and also officers from the ICT Audit Advisory Branch.
annual activity report 2006
sektor audit kerajaan negeri
state government audit sector INTRODUCTION The State Government’s Audit Sector is responsible to audit and report to Parliament and States Assemblies whether accountability exist in the management of public funds and activities of State Government as stipulated in the Federal Constitution and the Audit Act 1957. This auditing is conducted on Financial Statements of State Government, State Statutory Bodies, Local Authorities and Islamic Councils as well as activities of Ministries/Departments/Government Agencies in the States.
45
annual activity report 2006
State Governments Financial Statements Auditing is carried out on the Financial Statements to give an opinion whether it shows a true and fair view and financial records are maintained and updated. The Auditor General’s Report concerning the 13 State Governments’ Financial Statements was submitted to His Majesty the Yang di-Pertuan Agong for his consent to be tabled in Parliament. The reports were tabled in Parliament on 5 September 2006 and in the State Assemblies on the following dates: Tabling of the Auditor General’s Reports at State Assemblies
46
annual activity report 2006
No.
State
Reports Year
Date of Tabling
1.
Johor
2004
27.2.2006
2.
Pahang
2004
17.4.2006
3.
Perlis
2005
20.9.2006
4.
Melaka
2005
16.10.2006
5.
Kelantan
2005
8.11.2006
6.
Perak
2005
20.11.2006
7.
Selangor
2005
27.11.2006
8.
Pulau Pinang
2005
27.11.2006
9.
Sabah
2005
27.11.2006
10.
Sarawak
2004
28.11.2006
11.
Terengganu
2005
4.12.2006
12.
Negeri Sembilan
2005
4.12.2006
13.
Kedah
2005
31.12.2006
state government audit sector
Audit Achievements Financial Statements of State Statutory Bodies, Islamic Councils and Local Authorities A total of 288 financial statements of state agencies had been certified until 31 December 2006. Details are as follows: Certification of Agencies Financial Statements Agencies
Number of Financial Statements Certified
State Statutory Bodies
144
Local Authorities
129
Islamic Councils
15
Total
288
Financial Management Audit, Performance Audit, Audit of Subsidiary Companies, Adoption Programme, Audit Presence and Agency Management The State Government Audit Sector had successfully implemented the 2006 Audit Programme. In 2006, the sector carried out the following audits: Audit Activities in 2006 State
Financial Management Audit
Performance Audit
Audit of Subsidiary Companies
Adoption Programme
Audit Presence
Agency Management
1.
Johor
7
4
1
4
60
-
2.
Kedah
6
4
1
4
67
1
3.
Kelantan
6
4
2
4
27
-
4.
Melaka
3
2
1
2
12
-
5.
N.Sembilan
6
3
1
2
40
-
6.
Pahang
6
4
1
4
32
-
7.
Perak
7
4
3
4
92
-
8.
Perlis
4
2
1
4
7
-
9.
Pulau Pinang
7
4
1
2
17
-
10.
Sabah
13
8
2
6
86
-
11.
Sarawak
15
7
1
7
38
-
12.
Selangor
6
4
1
4
32
-
13.
Terengganu
6
4
2
4
66
2
Total
92
54
18
51
576
3
Implementation of the MS ISO 9001:2000 at State Government Audit Sector The State Government Audit Sector performed several initiatives in its quest to obtain the MS ISO 9001:2000 certifications for the audits of Financial Statements of State Governments, State Statutory Bodies, Islamic Councils and other Islamic Religious Institutions. Workshops and briefings were conducted to prepare the quality documents and to give exposures to audit officers from State Audit Branches. Beginning 17 July 2006, auditing was carried out by the 13 Audit State Branches, which covered financial statements of the State Government, Local Authorities, State Statutory Bodies, Islamic Councils and other Islamic Religious Institutions, based on the quality documents prepared.
47
main activities
No.
State Government Audit Sector Guidelines The main function of the State Government Audit Sector is to conduct auditing covering various disciplines.To strengthen and enhance audit quality, it is important that comprehensive guidelines are prepared. Therefore, in 2006, the State Government Audit Sector conducted brainstorming session to prepare and subsequently issued the following guidelines to be used by the State Government Audit Sector: • Auditing Guidelines on Financial Statement of the State Government. • Auditing Guidelines on Financial Statement of the Islamic Councils and Other Islamic Religious Institutions. • Auditing Guidelines on Financial Statement of the State Statutory Bodies. • Auditing Guidelines on Financial Management and Activities of the Forest Department. Adoption Programme In 2006, a total of 51 Departments/Agencies at state level were accepted under the ‘Adoption Programme’. At the end of 2006, 68 departments/agencies which had participated in this programme between 2004 and 2006 were awarded a Certificate of Participation as follows:
Number of Recipient for Certificate of Participation
48
Audit State Branch
Number of Departments/ Agencies
Sabah
12
Sarawak
19
Selangor
6
Perak
5
Pahang
3
Johor
3
Terengganu
4
Kelantan
5
Negeri Sembilan
4
Melaka
1
Pulau Pinang
1
Kedah
4
Perlis
1
Total
68
annual activity report 2006
state government audit sector
Performance Audit State Government Audit Sector performed 54 performance audits throughout 2006 which covered 13 State Audit Branches. Titles of the audit are as follows: State
Performance Audit Title
Agency
1.
Management of Land Reclamation And Land Utilization
Muar And Kota Tinggi Land Office
2.
Study on Food Industries Development Programme In Johor
Johor Agriculture Office
Johor 3.
Educational Loans Management
4.
Recreation Facilities and Park
5.
Productions of Rock Materials
6.
Johor Education Foundation Batu Pahat Municipality
Management of Sports Facilities Development Kedah
7.
Management of Baitumal Properties
8.
Management of Quit Rent
9.
Management of Application And Awarding of Land Titles
10.
Management Programmes
of
Perak
Pendang And Langkawi Land Office State Government Secretary Office Kedah Islamic Council Kulim Municipality
Sports
Council Training
Perak
Taiping Land And District Office Perak Sports Council
11.
Management of Local Government’s Arrears
Manjung Municipality, Ipoh City Hall And Lenggong District Council
12.
Management of Recreational Forest
State Forest Department
13.
Management of Amendment to Land Usage Conditions
14.
Management of Loans
15.
Public Amenity Development And Infrastructure Project
Kota Belud District Council
16.
Management of Buffalo Farm Project At Telupid, Sandakan
Veterinary Service Department Veterinary Service Department
Sabah
Land And Survey Department Sabah Economic Development Federation
17.
Construction And Management of Slaughter House
18.
Management of Sabah State Railways
Sabah Railway Department
19.
Privatisation of Rubbish Collection
Lahad Datu District Council
20.
Issuance And Enforcement of ’Halal’ Label Usage
Sabah Islamic Department
49
main activities
No.
No.
State
Performance Audit Title
21.
Management of Education Loans
22.
Management of Quit Rent Pahang
Pahang Foundation Maran District Council Department of Social Welfare Pahang Agriculture Department Sarawak Agriculture Department
23.
Management of General Welfare Scheme
24.
Fruits Industry Development Programme
25.
Women Economy Development Programme
26.
Management of Sarawak Sports Development
27.
Bridge Replacement Projects on State Road
Department of Works
Management of Financial Aids and Old Folks Welfare Scheme At Seri Kenangan Old Folks Home
Department of Social Welfare
28.
Sarawak
29.
Management of Wharf/Jetty and Terminal
30.
Privatisation of Rubbish Collection
31.
Sarawak Irrigation and Drainage Project
33.
Management of Library Collection And Amenity
34. Selangor 35. 36.
50
Agency
Road Construction Project From Sekinchan To Ulu Bernam Construction And Management of Tourism Infrastructure and Marine Park Privatisation on the Development of Aborigines Settlement
37.
Management of Children’s Kindergarten (TADIKA)
38.
Management of Allowance To Mukim Mosque’s Imam And Bilal
Terengganu
Sarawak Sports Council
Sarawak Rivers Organization South Kuching City Hall Sarawak Irrigation and Sewage Department Selangor Public Library Bodies Department of Works Sabak Bernam District Council State Secretary Office Terengganu Islamic Foundation Terengganu Islamic Affairs Department Irrigation And Drainage Department Hulu Terengganu District Council
39.
Management of Drainage
40.
Management of Licensing
41.
Cattle Fattening Scheme Project Programme
42.
Management of Night Market Traders And Foods Complex
Seberang Prai Municipality
43.
Mosque Construction Project
Islamic Affairs Department
44.
Management of State Government Quarters
Pulau Pinang
annual activity report 2006
Veterinary Department
State Secretary Office
state government audit sector
No.
State
45.
Performance Audit Title Management of Quit Rent
Agency Kangar Municipality
Perlis 46.
Management of Perlis Water Supplies
Department of Works
47.
Mosque Construction And Renovation Programme
Kelantan Development Office
48.
Management of Forest Farm Project
State Forest Department
Kelantan 49.
Management of Kelantan Public Library Corporation
Kelantan Library Board
50.
Developments of Bandar Pasir Pekan Joint Venture Project
Tumpat District Council
51.
Melaka Sentral Development and Management Project
State Treasury Office
Melaka
53. 54. 54.
Building Management Management on Issuance of Licenses to Collect Forest Product Privatisation of Solid Waste Cleaning And Disposal Negeri Sembilan Services Management of Negeri Sembilan State Government Islamic Schools
Melaka Development Board State Agriculture Department Nilai Municipality Islamic Affairs Department
51
main activities
52.
52
annual activity report 2006
sektor audit badan berkanun persekutuan
federal statutory bodies audit sector INTRODUCTION The Federal Statutory Bodies Audit Sector is obligated to perform financial statement audit of the Federal Statutory Bodies, management audit of agencies and its subsidiary companies as well as performance auditing. Until December 2006, 121 Federal Statutory Bodies and Provident Funds have been audited by the Sector. This included 8 new agencies established in 2006 as follows: • • • • • • • •
Malaysia Deposit Insurance Corporation Retirement Provident Funds Skills Development Funds Corporation University Darul Iman Malaysia University Malaysia Kelantan The National Defence University of Malaysia Malacca Port Authority Urban Development Authority
53
annual activity report 2006
Audit Achievements The Auditor General’s Report of the Federal Statutory Bodies for the year 2005 was submitted to His Majesty the Yang di-Pertuan Agong on 29 June 2006. The report was subsequently tabled in Parliament on 1 September 2006. The Federal Statutory Bodies Audit Sector received the MS ISO 9001:2000 certification for the audit of the Financial Statement of Federal Statutory Bodies on 23 February 2006. The Sector also reviewed and made improvements to its MS ISO 9001:2000 Quality Document on 30 October 2006.
Apart from that, the Sector conducted a total of 30 ‘Audit Presence’ at Federal Statutory Bodies which included branches locally and abroad. Among the ‘Audit Presence’ conducted abroad were: • Branches of The Central Bank of Malaysia, The Council Of Trust For The Indigenous People (MARA),The Malaysian Industrial Development Agency (MIDA), Malaysia External Trade Development Corporation (MATRADE), The Tourist Development Corporation of Malaysia (TDC) and The Malaysian Rubber Board (MRB) in London, UK. • The Malaysia External Trade Development Corporation (MATRADE) branch in Dubai. • Branches of The Malaysian Industrial Development Agency (MIDA) and The Tourist Development Corporation of Malaysia (TDC) at Stockholm, Sweden.
Auditing works performed in 2006 were as follows: No.
54
Types of Audit
Total
1.
Financial Statement Audit
114
2.
Management Audit of Agencies
22
3.
Management Audit of Subsidiary Companies
15
4.
Performance Audit
20
5.
Audit Presence
39
In 2006,the Sector conducted a total of 22 management audits on agencies, which covered aspects such as overall agency management, effectiveness of various Committees formed, Internal Audit Unit, system and procedures established and implemented, financial analysis as well as financial management. The Sector also succeeded in performing management audit on 15 subsidiary companies of the Federal Statutory Bodies to determine whether they have been properly managed and complied with established regulations in line with the objectives of their incorporation. annual activity report 2006
federal statutory bodies audit sector
The Federal Statutory Bodies Sector conducted 20 performance audits on programmes and activities in 2006 as follows: Performance Audit for the Year 2006 Performance Audit Title
Agency Muda Agriculture Development Authority (MADA)
1.
Management of Paddy Development Projects
2.
Management of Investment Promotion Activities
3.
Property Acquisition Management
4.
Management of Research And Development Projects
5.
Property Management
Social Security Organization (SOCSO)
6.
Research Management
Malaysia Agricultural Research Institute (MARDI)
7.
Management of Anchovy Fisherman Industries Settlement
8.
Management of Felda Jaya Project
9.
Crush Cushion Installation at Malaysia Highway under LLM
10.
Haj Management
11.
Patent Management
12.
Klang Port Free Zone Project
13.
Procurement Management
14.
Management of Student Loans
15.
Assets Control And Security
Malaysia University of Technology (UTM)
16.
Management of Agricultural Fields
Malaysia University of Agriculture (UPM)
17.
Management of Industrial Training
Construction Industry Development Board (CIDB)
18.
Management of Fishery Complex
Malaysia Fishery Development Board (LKIM)
19.
Management of Pharmacy Information System
University of Science Hospital (HUSM)
20.
Management of Computerized Accounting System
Armed Forces Fund Authority (LTAT)
Malaysia Industrial Development Authority (MIDA) Malaysia Inland Revenue Board (IRB) Malaysia Cocoa Board (LKM)
Langkawi Development Authority (LADA) Federal Land Development Authority (FELDA) Malaysia Highway Board (LLM) Haj Funds Board (LTH) Intellectual Properties Corporation of Malaysia (MyIPO) Klang Port Authority (LPK) MARA University of Technology (UiTM) The National Higher Education Funds Corporation (PTPTN)
55
main activities
No.
56
annual activity report 2006
contributions towards enhancing accountability in the public sector
57
annual activity report 2006
As a contribution to enhance accountability in the Public Sector, the Auditor General and officers of the National Audit Department have been invited from time to time to give talks and present working paper at seminar/workshops organized by Government Ministry/Department/Agency and public sector. In 2006, several working papers were presented by the Auditor General and officers of the Department. Talks and Working Papers Presented by The Auditor General
58
Date
Title/Organizer
5 April 2006
Accountability and Financial Management Problems of State Governments at Malaysian Public Accounts Committee Seminar.
22 May 2006
Procurement Issues of Local Government In Malaysia organized by Malaysian Institute of Integrity.
12 June 2006
Audit observation regarding the Preparation And Submission of Financial Statement of the State Agency during Liaison Committee Meeting between the Federal and State Government.
22 June 2006
Roles of Controlling Officer In Improving Accountability organized by State Secretary Office, Kelantan State Government.
6 July 2006
Roles of Departmental Heads In Improving Government Financial Management organized by National Institute of Public Administration (INTAN), Kemaman, Terengganu.
10 July 2006
New Audit Approaches in auditing Local Authorities organized by Universiti Utara Malaysia.
6 October 2006
Briefing of The Auditor General Report on the State Government Financial Statement and Financial Management Including the Department and State Agencies Activities for the year 2005 organized by the Ministry of Finance.
20 October 2006
Briefing on Issues raised in the Auditor General Report Regarding the 2005 Financial Position of State Government to the National Finance Council.
Talks and Working Papers Presented by Officers of the Department Date
Title/Organizer Kelantan
2 March 2006
Office Financial Management organized by Kelantan State Treasury.
20 June 2006
Management of Fixed Assets and Inventories organized by Kelantan State Government Secretary Office.
11 – 14 September 2006
Expenditure and Payments for Support Group organized by Kelantan State Government Secretary Office and Kelantan State Treasury Office.
21 December 2006
Management of Work Procedures Manual and Desk File Including Latest State Treasury Circular organized by Kelantan State Government Secretary Office.
annual activity report 2006
Date
Title/Organizer Selangor
27 June 2006
Accountability in the management of Local Authorities organized by Selangor State Government Secretary Office.
30 August 2006
Management of Desk File & Work Procedures Manual organized by Kuala Selangor Drainage And Irrigation Department.
22 November 2006
Accountability in the management of Local Authorities organized by Selangor State Government Secretary Office.
12 December 2006
Expenditure Control – Procurement Management organized by the National Accounting Institute
13 December 2006
Control on Deposit and Trusts Accounts, organized by the National Accounting Institute
13 December 2006
Reporting organized by the National Accounting Institute Kedah Audit Observation Regarding Financial Management (Accountability) organized by Defence Ministry
14 August 2006
Public Financial Management of the Kedah Darulaman State Government organized by State Secretary Office, Wisma Darul Aman Alor Setar, Kedah
6 – 7 September 2006
Financial Management Workshop organized by Kedah Public Library Organization
6 November 2006
Audit Observation Regarding Management of Revenue and Receipt organized by the Malaysia Fire and Rescue Department
7 November 2006
Issues and Problem Pertaining to Public Assets Management organized by National Public Administration Institute at Northern Campus, Sungai Petani Terengganu
5 August 2006
Audit Observation On Procurement Procedure organized by State Government Secretary Office, Terengganu (Local Government Unit)
19 – 21 September 2006
Management of Trust and Deposit Accounts organized by Terengganu Shari’a Judiciary Department
10 October 2006
Standardization of Audit Report organized by Ministry of Defence
59
functions towards improving accountability in the public sector
10 August 2006
Date
Title/Organizer Sarawak
26 January 2006
Financial Management Issues and Problems organized by National Institute of Public Administration (INTAN) at Sarawak
10 February 2006
Issues and Problems In Assets and Store Management organized by National Institute of Public Administration (INTAN) at Sarawak
28 March 2006
60
Audit Issues Related to Store organized by Sarawak Land & Survey Department
6 April 2006
Issues and Problems of Store Procurement and Management organized by Financial Management Advisory Service Department of the Finance Ministry, Malaysia Sarawak Treasury and Sarawak Education Department
13 July 2006
Audit Issues In Financial Management organized by Sarawak Land & Survey Department
13 September 2006
Audit Issues In Financial Management organized by Sarawak Land & Survey Department
15 November 2006
Financial Management Course organized by Chief Minister’s Department
23 November 2006
Financial Management Procurement Issues and Problems organized by Financial Management Advisory Service Department of the Finance Ministry Malaysia, Sarawak Treasury and Sarawak Education Department
24 November 2006
Issues and Problems In Financial Management organized by National Institute of Public Administration (INTAN) at Sarawak
7 December 2006
The Government Procurements Management Course organized by Internal Security Ministry
19 - 21 December 2006
Quality Audit Reporting Course organized by the Internal Affairs Ministry Sabah
23 January 2006
Financial Management Weaknesses organized by Malaysia Royal Custom Department
3– 6 July 2006
Department’s Financial Management and Weaknesses Observed organized by Keningau Management College
3 July 2006
The Federal Government Financial Management System organized by Malaysia Treasury, Sabah
12 July 2006
Financial Management Weaknesses in the Government Departments organized by Anti Corruption Agency, Sabah Branch
10 August 2006
Audit Observation Regarding Financial Management organized by Malaysia Treasury, Sabah
17 August 2006
Audit Inspection 2005/2006 organized by Sabah Federal Secretary Office
22 August 2006
Financial Management of Local Government in Sabah organized by Sabah Economic Action Council and UiTM Sabah
annual activity report 2006
Date
Title/Organizer
21 September 2006
Audit Observation Regarding Procurement and Assets Management organized by Malaysia Treasury, Sabah
14 November 2006
Stores and Assets Management organized by National Institute of Public Administration (INTAN) and Sabah Federal Secretary Office
11 December 2006
Government Assets Management organized by National Institute of Public Administration (INTAN) Sabah Perak
15 April 2006 29 May – 1 June 2006
Breaches and Non-Compliance Frequently Discovered In Financial Management And Administration organized by Anti Corruption Agency, Perak Branch Management of Revenue And Bank Reconciliation organized by Perak Water Board Financial Management organized by Perak Government State Secretary Office
2 September 2006
Audits Observation Regarding the Management of Assets and Store organized by Perak Islamic Department
11 – 13 September 2006
Financial Management Course organized by Land Office, Ipoh
20 October 2006
Trusts Funds, Deposit Management And Assets and Inventories Management organized by National Anti Drug Agency, Perak Branch
22 November 2006
Audits Observation Regarding Procurements And Assets Management organized by Hilir Perak Health Office
7 December 2006
Strengthening of Financial Management organized by the Malaysia Prison Department – Taiping Prison
11 – 13 December 2006
Effective Audit Techniques organized by School Audit Division Ministry of Education Melaka
26 April 2006
Audit Reports Writing organized by the Ministry of Defence
25 May 2006
Financial Management organized by the State Treasury
13 July 2006
Defensive Driving organized by the State Government
18 – 19 July 2006 31 July 2006 13 September 2006
61
Trust Accounts Management organized by the Government and State Treasury Trust Accounts Management organized by Institute of Management Malacca (IMM) Intelligent Driving organized by the State Government
functions towards improving accountability in the public sector
27 February 2006
62
annual activity report 2006
international involvement
63
annual activity report 2006
The National Audit Department is actively involved as participant, facilitator and Subject Matter Expert (SME) in international conventions, seminars, meetings, courses and workshops every year.The involvements aimed to provide exposure to the Department’s officers in public sector auditing at the Supreme Audit Institutions (SAI) and indirectly introducing the Department through exchange of experiences among the SAI concerned. The involvements of the Department officers throughout 2006 were as follows:
64
24 April – 5 May 2006 Singapore-Commonwealth Third Country Training Programme: Better Governance - Managing Corruption Organized By the Commonwealth Secretariat, Singapore Mr. Zaaba bin Zainuddin, Deputy Director (Federal Statutory Bodies Sector) attended the seminar organized by the Commonwealth Secretariat. Issues discussed focused on public service system, anti corruption frameworks and the main challenges encountered in implementing anti corruption initiatives. 18 – 19 May 2006 Performance Measurement for Government and Statutory Boards Conference 2006 Organized by the Asia Business Forum, Singapore The conference was attended by Mr Hairul Nizam bin Yusoff, Auditor (Research Division), in his capacity as Secretary of the Department’s Key Performance Index (KPI) Committee. Objectives of the conference were to discuss present approaches and strategies to achieve optimum performance standards and obtain the desired returns including effective leadership and management exchange strategy, recruitment, KPI development as well as effective performance monitoring measure through several methods such as Balanced Scorecard and 6 Sigma.
annual activity report 2006
3 – 14 July 2006 Regional Workshop: Performance Audit in Commonwealth SAIs at Lahore, Pakistan Miss Baridatul Anita binti Bidin, an Auditor from the Perak State Audit Branch, was chosen to attend the Performance Audit course which aimed to impart knowledge and share ideas pertaining to performance audit in the Commonwealth Countries.
3– 21 August 2006 ASOSAI Workshop on Procurement Audit at Jakarta, Indonesia Miss Hauriah binti Panjang Ahmad, an Auditor from the National Audit Academy, was involved as ASOSAI facilitator in the workshop. Apart from that, Miss Hajjah Suria binti Su’ut, an Auditor from the Sarawak Audit Branch attended as participant.The objectives of the workshop were to enhance audit knowledge and skills to be applied in Procurement Audit.
14 and 15 September 2006 Reference Panel Back Office Expert Meeting on Financial Auditing Guidelines under Professional Standard Committee for a Review of International Standard of Auditing (ISA) 500 on Audit Evidence at Stockholm, Sweden The meeting was attended by Mrs Patimah binti Ramuji, Principal Auditor, Federal Statutory Bodies Audit Sector. She represented the Department as an Expert Assistant to the INTOSAI Panel of Reference Expert. The purpose of the meeting was to revise the ISA 500 regarding Audit Evidence.
9 – 15 September 2006 10th ASOSAI Assembly and 3rd Symposium at Shanghai, China The delegation comprised of four officers headed by Tan Sri Dato’ Setia Ambrin bin Buang, the Auditor General of Malaysia. Other members of the delegation were Mr Mustafa bin Saman, Director of Corporate Management Sector, Mr Khalid Khan bin Abdullah Khan, Deputy Director Research Division and Mr Md. Tahib bin Hj. Radzuan, Director, Johor State Audit Branch. This assembly is organized once in every 3 years. Asian Organisation of Supreme Audit Institution (ASOSAI) is an independedent body which was established in 1979 and consists of 43 Supreme Audit Institution from the Asian region. The main activities during the Assembly were: • Election of ASOSAI Administration Board Member for the period from 2006 until 2009 • The 36th and 37th meetings of ASOSAI Governing Board • Meeting of ASOSAI Training Committee • The 3rd ASOSAI Symposium During the election for the ASOSAI Governing Board, Malaysia was elected for the second term as a member of the ASOSAI’s Board of Governor from 2006 to 2009. The ASOSAI Governing Board comprises of nine countries. At the 3rd ASOSAI Symposium on 13th September 2006, the Auditor General, Tan Sri Dato’ Setia Ambrin bin Buang presented a working paper titled “The Role of the National Audit Department of Malaysia in Promoting Government Accountability”. During the Assembly, several member countries had conducted bilateral discussion with the Auditor General. Among others, the National Audit Department was requested to assist them in training their auditors in Performance Audit and ICT in recognition of Malaysia’s success and experience in public sector auditing.
65
international involvement
11 and 12 September 2006 Reference Panel Expert Meeting on Financial Auditing Guidelines under Professional Standard Committee for a Review of International Standard of Auditing (ISA) 550 on Related Parties, at Stockholm, Sweden The meeting was attended by Mrs Zainon binti Taib, Deputy Director, Federal Statutory Bodies Audit Sector. She represented the Department as an expert in the Panel of Reference Expert, International Organisation of Supreme Audit Institution (INTOSAI). The purpose of the meeting was to revise the International Standard of Auditing (ISA) 550 regarding Related Parties For Development Of Financial Audit Guidelines.
12 – 22 November 2006 ASOSAI Workshop on Challenges to New Audit Frontiers - How to Develop and Manage Human Resources for Dealing with Emerging Audit Issues organized by Japan International Co-operation Agency (JICA) at Tokyo, Japan The National Audit Department sent 2 officers to the workshop namely Mr Mustafa bin Hj. Saman, Director of Corporate Management Sector and Mr Abdul Rahman bin Johor, Principal Administration Officer (Human Resource) to foster the cooperation in term of sharing information among ASOSAI members. The outcome of the workshop will strengthen the management of human resource at the National Audit Department.
66
27 - 30 July 2006 Work Visit to the Audit Board, Republic of Indonesia Dato’ Hjh. Azizah binti Hj. Arshad, Deputy Auditor General (Federal) and Mrs Yusnani binti Zakaria, Deputy Director (Federal Audit Sector) conducted a formal visit to the Republic of Indonesia. During the visit, they held discussion with the Chairman and members of the Audit Board (Badan Pemeriksa Keuangan) Republic of Indonesia on matters relating to the implementation of Performance Audit and Environment Audit. They also represented the Department at the award presentation by the kerabat Diraja Pagaruyung Sumatera Barat to the Chairman of BPK held in West Sumatera.
annual activity report 2006
26 November - 9 December 2006 Instuctional and Design Meeting for Financial Audit and Fraud Awareness Workshops, Cambodia Miss Alifah Aida bt Lope Abdul Rahman, an Auditor from the Federal Audit Sector was chosen by INTOSAI Development Initiative (IDI) to attend the Instructional and Design Meeting for Financial Audit and Fraud Awareness Workshops in Cambodia on 26 November until 9 December 2006. The purpose of the workshop was to assist SAI’s member countries in developing human resources through training and information sharing.
17 – 20 December 2006 Visit to the National Audit Authority (NAA) of Cambodia, Phnom Penh, Cambodia Two officers, Mr Abd. Wahab bin Ahmad, Director of the National Audit Academy and Mr Roslan bin Abu Bakar, Deputy Director of the National Audit Academy, made an official visit to the National Audit Authority of Cambodia on 17 until 20 December 2006. The purpose of the visit was to fulfil the invitation made by the Auditor General, NAA of Cambodia who was keen in strengthening cooperation especially in training,information sharing and exchange of experience in auditing. During the visit, briefings and discussions were held with officers and staffs of the NAA. The NAA had requested the National Audit Academy to conduct training for its staffs on performance audit, construction projects, revenue and also ICT in 2007.
Visits from Foreign Delegates The National Audit Department was frequently visited by foreign delegations to exchange views and experiences regarding the best practices in public sector auditing. The visits also strengthen bilateral relationship with the respective countries. Seven delegations from Indonesia, Nigeria, Cambodia, China, South Africa,Yemen and Bangladesh visited the National Audit Department throughout 2006. In addition, the Department received courtesy calls from Ambassador of Austria, Deputy Auditor General of Australia and Audit Committee Members of Brunei. The Brunei Delegations also took the opportunity to visit the National Audit Academy where they were given briefing by the Director of Academy about the Academy’s operations.
international involvement
67
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annual activity report 2006
special report 100 Years’ Anniversary Celebration Symposium on Environmental Governance 2006 National Audit Day
69
annual activity report 2006
100 Years’ Anniversary Celebration National Audit Convention One of the activities organised in conjunction with the 100th Year Anniversary Celebration of the National Audit Institution was the National Audit Convention held on 14 February 2006 at the Putrajaya International Convention Centre (PICC). The convention was officiated by The Honourable Tan Sri Ramli b. Ngah Talib, Speaker of the House of Representatives and attended by 696 participants from various Ministries/Departments/ Agencies, Government Linked Companies, Private Audit Firms, Professional Bodies and foreign delegations.
70
The Convention was organised as a platform for participants to exchange views and ideas as well as to discuss current issues and challenges with regards to accountability and good governance. The theme ‘Accountability & Good Governance: Auditors – Where Are You?’ chosen for the convention is thus relevant for the convention. Auditors indeed do play significant roles in ensuring accountability in financial management especially in this dynamic environment.
Based on the theme, two topics were selected to be presented by renowned speakers: i. Accountability and Good Governance: Auditor’s Roles – Public Expectations ii. Ethical Issues in Auditing Practice Topic concerning issues and challenges of accountability and good governance from the perspective of developed and developing nations was discussed by a panel comprising of Mr. Patrick Joseph Barret, former Auditor General of Australia and Mr Shauket A. Fakie, Auditor General of South Africa. Apart from that, a mini exhibition themed “The National Audit Institution – Past, Present and Future” and a counter selling First Day Cover commemorating the 100th Year of National Audit Institution were held at the lobby area.
annual activity report 2006
The Audit Gala Night The Audit Gala Night, the highlight of the 100th Year Anniversary Celebration of the National Audit Institution, was held on 14 February 2006 at Perdana Hall, Putrajaya International Convention Centre. The event was graced by His Majesty the Yang di-Pertuan Agong and Raja Permaisuri Agong and attended by 600 guests comprising of Head of Ministries/Departments/Agencies, Ambassadors, speakers/delegations from Australia, Indonesia and South Africa and also former Audit officers as well as officers and staffs of the National Audit Department. The launching of the ‘100 Years National Audit Institution’ book and the 100th Anniversary Commemorative Stamp were the main events which was officiated by His Majesty the Yang di-Pertuan Agong. The guests were entertained with traditional dances performed by staffs of the National Audit Department and local artists.
Symposium on Environmental Governance Many of the participants who attended the symposium were officers from the Local Authorities who were directly involved in environmental management. Apart from that, the symposium was attended by 400 participants from Ministries/ Departments, Professional Bodies, Private Audit Firms, Non-Governmental Organisations (NGO’s) as well as officers and staffs of the National Audit Department. The symposium theme was “Auditors’ Role Towards Improving Environmental Governance” which focussed on issues and challenges pertaining to enforcement of laws and procedures regarding the environment, roles of Local Authorities in protecting the environment and experience learned from INTOSAI Working Group on Environmental Audit (WGEA) projects. Three working papers as follows were presented by renowned speakers with vast experience in environmental management audit: •
Enforcement of Environmental Laws/ Regulations – Issues and Challenges - Dato’ Hajah Rosnani bt.Ibarahim,The DirectorGeneral, Department of Environment
•
Roles of Local Authorities in Protecting The Environment - Dato’ Hj. Anwar b. Hj. Abd. Rahman, Deputy Secretary General (Development), Ministry of Housing and Local Government
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Environmental Audit – Lessons Learned form INTOSAI WGEA Projects - Ms Kimberley Leach, Director, Office of the Auditor-General of Canada
The one day symposium ended with a panel discussion session which deliberated on issues and challenges in environmental audit. The session was chaired by the Auditor General of Malaysia and participated by the three invited speakers. Feedback received from the discussion would assist the National Audit Department in planning and implementing audit tailored towards creating an efficient environmental management.
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special reports
A Symposium on Environmental Governance was held on 4 December 2006 at the National Audit Academy. The symposium was officiated by The Honourable Dato’ S.Sothinatahan, Deputy Minister, Natural Resources and Environment. Since environmental audit is relatively a new area in auditing, thus by organising the seminar had provided the opportunity for all parties involved in environmental management to discuss and to identify their roles and functions towards ensuring environmental good governance.
2006 National Audit Day The 2006 National Audit Day was held on 5 December 2006 at Grand Bluewave Hotel, Shah Alam, Selangor. It was a continuation of the 100th Year Anniversary Celebration of the National Audit Institution which was conducted in 2005. The ceremony was officiated by The Honourable Dato’ Seri Dr. Hj. Mohamad Khir b.Toyo, the Chief Minister of Selangor. The ceremony was attended by 700 guests comprising of the Speaker of the Selangor State Assembly, Selangor State Secretary, members of the Federal Public Accounts Committee, members of the Selangor Public Accounts Committee, Private Audit Firms, Professional Bodies, former State Audit Director of Selangor and officers and staffs of the National Audit Department.
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The celebration theme was “Roles of Auditor towards the Success of the Ninth Malaysia Plan”.The theme was selected as 2006 was the first year of the implementation of the Ninth Malaysian Plan and also to remind auditors the importance of efficiency and quality in their works in ensuring that every Government programmes/activities is executed prudently and in line with determined objectives.
Among the activities organised were presentation of Certificate of Participation to agencies that had participated in the Adoption Programme and donation of books to selected schools. The criteria for the selection of schools to receive the books were based on socio economic factors and the schools’ achievements. Other activities held were exhibition counters themed “National Audit Institution – Past, Present and Future” and customers service counter as was previously done in 2006.
annual activity report 2006
Editorial Committee Advisors Tan Sri Dato’ Setia Ambrin bin Buang Auditor General Dato’ Azizah bt. Hj. Arshad Hj. Anwari bin Suri
Editors Mustafa bin Hj. Saman (Chief Editor) Khalid Khan bin Abdullah Khan Noraini bt. Abd. Wahab Y. Hamdan bin Mohd Dom Dr. Masiah bt. Ahmad Badariah bt Abas Sabaruddin bin A. Kadir Wahab Naimah bt. Abdul Rashid Zainab bt. Mohd Noor
Abdul Wahab bin Ahmad Azmin bin Husin Muhammad Iskandar bin Mokhtar Mohd Fisul bin Ismail Khairul Anuar bin Amat Johari Asrina bt. Mahadi Zaini bt. Madon Norizah bt. Ab. Ghani
Graphics 73 Muhamad Syafiq bin Pauzee Md.Yazit bin Hashim
annual activity report 2006
