Auditor General s Report For The Year 2013

Transcription

1 Auditor General s Report For The Year 2013 Preface And Report Summary Financial Statement And The Financial Management Of The State Departments And Agencies For Kedah National Audit Department Malaysia

2 Sekiranya ada ketidaktepatan antara ayat dalam Bahasa Melayu dan Bahasa Inggeris, ayat dalam Bahasa Melayu adalah terpakai. In case there is any inconsistency between the Malay text and the English text, the text in Malay shall prevail.

3 AUDITOR GENERAL S REPORT FOR THE YEAR 2013 On The State Government s Financial Statement And The Financial Management Of The State Departments And Agencies For KEDAH

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5 PREFACE 1. Article 106 and 107 of the Federal Constitution and the Audit Act 1957 require the Auditor General in such manner he deems fit, to examine, investigate and audit the Federal/State Government/Agencies Financial Statements and submit a Report to the Supreme Head of Malaysia, His Majesty, Seri Paduka Baginda Yang di-pertuan Agong and His Royal Highness, the Sultan of Kedah. His Majesty shall cause the Report to be laid in Parliament while His Royal Highness shall cause the Report to be laid in the State Legislative Assembly. To fulfil these responsibilities, the National Audit Department has carried out 2 types of audit as follows: 1.1. Attestation Audit The objective of this audit which is guided by the Government Accounting Standards is to give an opinion whether the State Government s Financial Statements for the year concerned shows a true and fair view as well as its accounting records are properly maintained and kept up to date. The Audit is also performed on the Financial Statements of the State Statutory Bodies, Local Authorities and the Islamic Religious Council Financial Management Audit The objective of this audit is to evaluate the financial management of the State Departments/ Agencies in adhering to the rules and financial regulations. The National Audit Department has introduced the Accountability Index (AI) in year 2007, and 2013 is the seventh year of its implementation. AI was introduced to evaluate objectively the State Departments/Agencies financial management audit in order to measure and enhance the excellent financial management control. The AI ratings are based on the level of compliance with the financial regulations relating to controls on management, budgetary, revenue and expenditure as well as management of trust funds/trust accounts/deposits, assets and stores, loans, investments and financial statements. The implementation of AI helps to instil a work culture of best practices such as Timeliness, Accuracy and Integrity. Besides, surprise inspections are also carried out at selected Responsibility Centres around the State as continuous effort in instilling conscience and high integrity commitment among civil servants on financial management. 2. My Report on the State Government s Financial Statements and the Financial Management of State Departments/Agencies for the year 2013 was prepared based on the audit findings in State Treasury Office and several State Departments/Agencies throughout the year During the audit, inspections were carried out thoroughly and in transparent manner on all measures taken by the Departments/Agency to protect all of the collection, custody and disbursement of public funds from the occurrence of serious non-compliance. 3. The Federal Government has decided to adopt Accrual Basis Accounting commencing 2015 to replace the current Modified Cash Basis Accounting. Acrual basis recognises and records every transaction as it occurs. In addition, the value of all public

6 assets comprising movable, immovable and live assets as well as all types of Government liabilities are required to be disclosed in the Federal/State Government s Financial Statements. The implementation of Accrual Basis Accounting is in line with the Government's aspiration to strengthen the Transformation of Public Sector to further enhance the efficiency in financial management and accounting. Therefore, the State Government has to solidify the Departments/Agencies financial management especially in the management of assets and inventory as a prelude towards the new accounting basis. Thus, the continuous human capital development should be heightened. 4. I wish to express my gratitude to all officers of the State Departments/Agencies who have given their full cooperation to my officers throughout the audit. I would also like to extend my appreciation and thanks to my officers who have worked diligently and given their commitment to complete this Report. (TAN SRI DATO SETIA HAJI AMBRIN BIN BUANG) Auditor General Malaysia Putrajaya 4 th August 2014

7 REPORT SUMMARY PART I - CERTIFICATION OF THE STATE GOVERNMENT S FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER Generally, the Kedah State Government s Financial Statement reflected a true and fair view of the financial position of the State Government as at 31 December All items in the Financial Statements have been supported by sufficient documents. PART II - FINANCIAL ANALYSIS OF THE STATE GOVERNMENT 2. Overall, the financial position of the Kedah State Government in 2013 was satisfactory and improved compared to the financial position in the year The State Government incurred a surplus of RM5.19 million as revenue received in excess of expenses. The State Government Consolidated Fund recorded an increase of RM39.74 million or 23.5% to RM million in 2013 compared to RM million in The revenue of the State Government amounted to RM million increased by RM99.97 million or 23.9% as compared to RM million in The operating expenditure also increased by RM56.16 million or 12.3% from RM million in 2012 to RM million in The deficit balance of the Consolidated Revenue Account totalling RM million in 2012 showed a slight decrease by 1.6% to RM in The Accounts Payable increased by a total of RM15.29 million to RM52.07 million compared to RM36.78 million in The public debt remains high with balance amounting to RM2.60 billion. In addition, the Government also has a liability in construction loans of the Insaniah University College (KUIN) amounted to RM million as at 31 December Accounts Receivable showed an increase of RM1.70 million in 2013 to RM million. PART III - THE STATE GOVERNMENT DEVELOPMENT PLAN 3. A ceiling of RM3.43 billion was approved by the State Government for the Tenth Malaysia Plan and distributed to 9 Departments. However, in the year 2012 and 2013, the ceiling was revised to RM3.55 billion and RM3.75 billion respectively. Overall, the implementation of development projects under the Tenth Malaysia Plan was satisfactory. As at 31 December 2013, a total of RM million or 73.2% was spent as compared to an approved allocation of RM million. From a total of 327 planned projects, 264 projects or 80.7% have been completed. However, 19 or 5.8% of the projects is in progress while 39 projects or 12% has yet to commence.

8 PART IV - FINANCIAL MANAGEMENT PERFORMANCE OF THE STATE DEPARTMENTS/AGENCIES 4. In 2013, the National Audit Department conducted an audit on Financial Management Based on the Accountability Index at 19 State Departments / Agencies. The Accountability Index is rated based on the level of compliance with government regulations and financial management elements such as control of management, budget control, control of receipts, expense control, management of trust account / Trust Fund and deposit, asset and store management, investment management, loan management and annual financial statements. The audit of the financial management of the state department / agency, based on the Accountability Index in 2013 found that 11 departments / agencies are in a very good level and 8 departments / agencies are on a good level. This performance is better than in 2012 where only 7 of 19 departments / agencies audited are on a very good level, 10 departments / agencies got a good level and 2 Department / Agency are in a satisfactory level. In overall, the financial management of the state department / agency for the year 2013 is good. PART V - SUBMISSION, CERTIFICATION AND TABLING OF FINANCIAL STATEMENTS AND FINANCIAL PERFORMANCE OF THE STATE AGENCIES 5. In 2013, the National Auditor General has certified about 22 Financial Statements for the year 2012 against the State Statutory Authority, State Islamic Council and the Local Authority. All the 22 Financial Statements for the year 2012 has been issued an unqualified audit certificate. In the year 2013, 20 out of 22 Financial Statements of the Agency have been submitted to the Department of the National Auditor General for auditing. Furthermore, about 4 certified Financial Statement of 2012 has not yet been presented in the State Legislative Assembly of Kedah. PART VI - TABLING OF THE AUDITOR GENERAL S REPORT AND MEETINGS OF THE STATE PUBLIC ACCOUNTS COMMITTEE 6. The Auditor General's Report on the Kedah State Government s Financial Statements and The Financial Management of the State Departments and Agencies for the year 2012 was tabled in the State Legislative Assembly on 28 April Until 30 June 2014, the Public Accounts Committee still not yet to meet to discuss the Auditor General's Report on State Government Financial Statement and Financial Management of Government Departments/ State Agencies in 2012.

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12 NATIONAL AUDIT DEPARTMENT MALAYSIA No.15, Level 1-15, Persiaran Perdana, Presint 2 Pusat Pentadbiran Kerajaan Persekutuan Wilayah Persekutuan Putrajaya