Ketua audit negara perlu kompetensi, profesionalisme tinggi

The Chief Auditor of the National Audit Office (JAN) needs high competence, professionalism, and independence to ensure financial risks and inefficiencies are handled appropriately, said analyst Ahmad Zaharuddin Sani Ahmad Sabri. The audit of Tabung Haji (TH) shows the importance of professional consideration at the highest level when facing issues that could undermine the financial position of a public institution, he told FMT.

Zaharuddin referred to the Joint Royal Commission Inquiry (RCI) report on TH's management and operations in June, which found the TH's financial statement for 2017 should not have been given an audit opinion without a qualified opinion. The audit team initially proposed a qualified audit opinion due to significant underperformance and investment losses amounting to RM227.81 million.

However, the qualified audit opinion was ultimately issued with a disclaimer of opinion (EOM). The RCI also found TH should have recorded a net loss of about RM1.4 billion in 2017 if the Malaysian Financial Reporting Standards (MFRS) were fully applied, compared to the reported profit of RM3.4 billion. Former Chief Auditor Madinah Mohamad, who approved the qualified audit opinion, stands by her decision, saying a qualified audit opinion can undermine confidence and have significant implications for TH.

Zaharuddin questioned whether the identified weaknesses or risks during the audit were sufficiently challenged and brought to those with the power to take action. He argued an audit that finds problems but cannot trigger action is not a safeguard, but only a record after damage has occurred. Zaharuddin proposed a two-tier audit system for government-linked companies (GLCs), strategic investment-linked companies (GLICs) or entities with high risk, in addition to audits by JAN.

He emphasized that entities related to the government should also be audited by independent professional firms. This two-tier approach would reduce blind spots and provide different perspectives, including in financial, investment, and management audits, he said. Zaharuddin also suggested the government introduce an annual report on GLC holdings to be presented in Parliament.

The report could detail government holdings, company values and performance, investment objectives, and returns to the government, he added. This annual reporting would allow Parliament to periodically examine performance and risk, helping to detect issues before they become more severe, he argued. The public has a right to know where public money goes, who makes decisions, who benefits, how much they make, and early signs of trouble in any investment or project, he said.

Relying solely on individual bravery is not enough; it must be built into regulations and institutions, he concluded.