Latest Auditor-General’s Report Reveals Major Public Sector Procurement and Governance Irregularities
The 2025 Auditor-General’s Report uncovers key procurement lapses, governance weaknesses, and subsidy leakages in Malaysia’s public sector, highlighting urgent reforms needed to enhance transparency and accountability.
In the latest Auditor-General’s Report tabled in Parliament, Malaysia’s public sector governance has once again come under the microscope, revealing significant financial and administrative irregularities across a spectrum of government-linked entities and ministries. The findings have reignited concerns over public fund management and the urgent need for structural reforms.
Among the most prominent issues highlighted is the procurement and administrative weaknesses at FELCRA Berhad, where the acquisition of four oil palm plantations amounting to RM241.76 million came under scrutiny. According to the report, deficiencies in internal controls and due diligence during the purchase process have exposed the agency to the risks of misappropriation and substantial financial loss. Such revelations raise red flags about the overall robustness of evaluation mechanisms in place for large-scale acquisitions involving public funds.
The report also casts a spotlight on Universiti Kebangsaan Malaysia (UKM), where irregularities surfaced within tender processes involving RM58.45 million. The audit notes a lack of transparency and inconsistencies in contract awarding and management procedures, potentially undermining the institution’s ability to achieve value for money in its procurement activities.
Public Sector Procurement
Procurement practices within the Ministry of Defence also drew critical attention. Maintenance contracts related to armoured vehicles revealed that RM162.75 million in penalties was left uncollected, while an additional RM1.42 million in fines was waived without adequate justification. The report further uncovered that contracts valued at RM107.54 million were deliberately split, seemingly to circumvent procurement regulations and scrutiny. These findings suggest a systemic issue that not only erodes accountability but may also create opportunities for waste and abuse.
A related concern is the use of the “Selective Pre-Qualification” procurement method by the Finance Ministry. The audit deemed this approach lacking in transparency, with certain firms bypassing initial vetting procedures. As a result, the report recommends a return to open tenders to ensure a level playing field and restore public confidence in government procurement.
The Ministry of Domestic Trade and Cost of Living’s subsidised cooking oil program was also flagged for inadequate monitoring and untargeted distribution. Weak oversight has heightened the risk of leakages and raised questions about the effectiveness of public subsidies meant for vulnerable groups.
In total, the Auditor-General’s Department conducted reviews across seven ministries and recovered RM157.73 million through penalty claims and other interventions in 2024 alone. Twenty-two recommendations were made, calling for stronger contract management, more transparent procurement processes, and tighter monitoring frameworks.
With increasing public demand for greater transparency, the latest audit report underscores the critical need for continuous reform in governmental practices. As amendments empower auditors to scrutinise any entity receiving public funds, all eyes will be on how policymakers and department heads respond to the call for higher accountability and prudent stewardship of national resource.