Weaknesses of Malaysian public procurement: a review of auditor general’s reports

Purpose This paper aims to systematically analyze the weaknesses of public procurement in Malaysia as reported in the Auditor General’s Reports from 2011 until 2018. Specifically, the study examines the types of weaknesses, the modes of public procurement involved with the weaknesses, the procurement categories involved with the weaknesses and the key recommendations to mitigate the weaknesses in public procurement. Design/methodology/approach A document analysis was adopted in achieving the objective. The Auditor General’s reports and the reports of activities of federal ministries/departments published by the National Audit Department, Malaysia from the year 2011 until 2018 are the main documents used in this study. The data gathered were analyzed using frequency distribution and displayed with descriptive statistics and relevant graphs. Findings The findings of the study revealed that the top five reported are non-compliance to scope, specifications and terms of contracts; delayed completion/non-completion of project; poor documentation; low quality of products, service and work; and little or no prior planning. It is also found that direct negotiation mode was reported with the highest issues of public procurement, while the procurement mode with the least public procurement weaknesses is direct purchase. Moreover, it was found that work category is the highest with public procurement issues reported compared to supplies and services. The top recommendations given by the Auditor General were to improve internal control, to enhance monitoring, to establish planning in details, to improve assets management and to take appropriate actions toward contractors and procurement officers when needed. Originality/value This is among a few studies that attempted to systematically examine the main issues regarding the public procurement activities in Malaysia. This study highlighted pertinent aspects of the public procurement activities, which need close attention by the relevant authorities to ensure efficient and effective public procurement.

Opening and Balancing the Books: the New Zealand Parliament and the Control and Scrutiny of Government Expenditure

<p>Controlling and scrutinising government expenditure is an important duty of the New Zealand Parliament. There is an on-going debate on the effectiveness of Parliament in undertaking this. The role, inherited from the British Parliament, has been developed upon and refined by the New Zealand Parliament. Parliament holds the government to account for its expenditure through a system consisting of the Finance and Expenditure Committee, other subject select committees, extensive Budget and Estimates documentation, and detailed appropriations. The Controller and Auditor-General, debate in the House, and thorough accounts and accounting are also a part of the process. The New Zealand Parliament can have more than adequate control of government expenditure, but is sometimes deficient at scrutinising its details. Recommendations to improve Parliament’s ability to control and scrutinise government expenditure must centre on Members of Parliament being willing, able and eager to undertake the role.</p>

Opening and Balancing the Books: the New Zealand Parliament and the Control and Scrutiny of Government Expenditure

<p>Controlling and scrutinising government expenditure is an important duty of the New Zealand Parliament. There is an on-going debate on the effectiveness of Parliament in undertaking this. The role, inherited from the British Parliament, has been developed upon and refined by the New Zealand Parliament. Parliament holds the government to account for its expenditure through a system consisting of the Finance and Expenditure Committee, other subject select committees, extensive Budget and Estimates documentation, and detailed appropriations. The Controller and Auditor-General, debate in the House, and thorough accounts and accounting are also a part of the process. The New Zealand Parliament can have more than adequate control of government expenditure, but is sometimes deficient at scrutinising its details. Recommendations to improve Parliament’s ability to control and scrutinise government expenditure must centre on Members of Parliament being willing, able and eager to undertake the role.</p>

Examination of Statements of Service Performance of New Zealand Local Authorities: the Case of Wastewater Services

<p>The provision of statements of service performance (SSPs) by local government in New Zealand is a product of the economic reforms carried out in the late 1980s. A statement of service performance is regarded as an important document of New Zealand local government reporting. It is statutorily required by the Local Government Act 2002 and complemented by accounting guidance provided by the New Zealand Institute of Chartered Accountants (NZICA), with the objective of strengthening accountability obligations (Local Government Act 2002, s. 98; NZICA, 2002). In spite of twenty years‟ experience in preparing statements of service performance, the Office of the Auditor-General (OAG) (2008) criticised that the quality of SSPs prepared by local authorities (and other public-sector entities) was poor. A fundamental problem of statements of service performance reporting is the lack of comprehensive authoritative requirements on their preparation and presentation (Office of the Auditor-General, 2008). Arguably, the present authoritative requirements have been written to cater for the needs of large, profit-oriented entities in the private-sector rather than for the public-sector‟s specific needs for performance reporting and pitched at a higher or more conceptual level than is typically required for financial reporting standards (Office of the Auditor-General, 2008, Webster, 2007). This may be due to the fact that the current authoritative requirements, developed in early 1990s, have been influenced by the economic framework highlighting the decision-usefulness purpose of private-sector reporting, which is not suitable for public-sector reporting (Mack, 2003; Parker & Gould, 1999). Responding to the need for more adequate guidance for non-financial performance reporting of public-sector entities, the OAG and the International Public Sector Accounting Standards Board (IPSASB) are working on improving accounting guidance applicable for the preparation for SSP reporting by public-sector entities (Office of the Auditor-General, 2010; International Public Sector Accounting Standard Board, 2010). Pallot (1992) points out that accountability is the preferred purpose for public-sector reporting since the nature of the relationship between providers and users of government is non-voluntary. Past theoretical literature has attempted to define the possible components of accountability that would be suitable for public-sector entities to adequately discharge their accountability. Among them, Stewart (1984) has developed accountability bases, which provide a platform for understanding accountability expectations and, hence desirable characteristics of any accountability documents provided by public-sector entities for the public. It is possible that accountability documents pertaining to these accountability expectations will enable the public-sector entities to adequately discharge their accountability. New Zealand local government is the important second tier of New Zealand government sector. Among the wide range of community services provided by New Zealand local authorities, wastewater services represent one of the most crucial services. New Zealand constituents could be expected to be concerned not only about the performance of wastewater services provided by their local authorities, but also with the disclosures about that performance. However, the research on SSP wastewater disclosures by New Zealand local authorities is limited (Smith & Coy, 2000). Given the criticism on the usefulness of authoritative requirements for SSP reporting and the recognition of accountability expectations by the literature, the first two objectives of this study are to examine the consistency of SSP disclosures, regarding wastewater services provided by New Zealand local authorities, with the existing authoritative requirements, and the accountability expectations, using the disclosure index as a measurement tool. To understand possible explanations for the cross-sectional differences on the extent of disclosures, according to the authoritative requirements and accountability expectations, the third objective of this study is to examine the influential factors of the disclosures, using multiple regression analysis. The study finds that the performance disclosures made by the local authorities have low levels of correspondence with the index that is based on the authoritative requirements. The result also provides evidence that the current authoritative requirements are focused on financial information reporting and pitched at a high conceptual level. This supports the view that the existing authoritative pronouncements are not providing sufficient guidance for local authorities. The index based on accountability expectations has relatively greater correspondence with the disclosures made. This identifies that local authorities are providing information consistent with accountability expectations. The study suggests that accountability expectations provide a model suitable for SSP reporting guidance. According to the multiple regression analysis, the result shows that only size is significantly related to the extent of the disclosures. Larger local authorities report more corresponding information. The findings of this study provide three immediate implications which should be useful to: (i) accounting standard-setters for their current work on improving accounting guidance for SSP reporting; (ii) the Office of the Auditor-General for providing more insightful comments in the audit statement for SSP reporting; and (iii) regulators for increased attention on some special local authorities. By doing so, it is expected that New Zealand local authorities may lead the world in providing comprehensive SSPs, which enable them to adequately discharge their accountability and, hence in reaching a reform principle for greater accountability.</p>

The effects of Electronic Salary Paying Voucher System on Undeserved Salary Compensation of Employees within Ghana Education Service

Ghana Education Service is believed to be the department with the highest level of undeserved compensations and other related payroll fraud. This is because the Auditor General Report (2018) noted that Ghana Education Service is the common department for the menace of Salary Grade Mismatches which included some 1,200 employees across board. This paper is born with the purpose of Assessing the Impact of the E-Salary Payment Voucher system and Payroll Headcounts/Audits in the elimination of Unauthorized Compensations in the two Kasena-Nankana Districts of Upper East Region of Ghana. Research questions for the study focused on the relationship between undeserved compensations which is the dependent variable and the independent variables include; payroll audits and the E-Salary Payment Voucher system. This study employed the fraud triangle theory as the basis for its experiment. The study also utilized the non-probability quota sampling method to select 102 users of the E-SPV system for a cross sectional survey in Ghana Education Service. Significant findings of the study include, validators or users of the E-SPV system are partly mandated to protect the public purse and hence the power to allow the prevalence of undeserved compensations is also in their hands. Recommendations emanating from the study seek to unpin that there should be an annual system audit of the Electronic Salary Payment Voucher at various management units to ensure that it reflects the true and fair view of the compensations given to staff at various cost centers in Ghana Education Service.

Examination of Statements of Service Performance of New Zealand Local Authorities: the Case of Wastewater Services

<p>The provision of statements of service performance (SSPs) by local government in New Zealand is a product of the economic reforms carried out in the late 1980s. A statement of service performance is regarded as an important document of New Zealand local government reporting. It is statutorily required by the Local Government Act 2002 and complemented by accounting guidance provided by the New Zealand Institute of Chartered Accountants (NZICA), with the objective of strengthening accountability obligations (Local Government Act 2002, s. 98; NZICA, 2002). In spite of twenty years‟ experience in preparing statements of service performance, the Office of the Auditor-General (OAG) (2008) criticised that the quality of SSPs prepared by local authorities (and other public-sector entities) was poor. A fundamental problem of statements of service performance reporting is the lack of comprehensive authoritative requirements on their preparation and presentation (Office of the Auditor-General, 2008). Arguably, the present authoritative requirements have been written to cater for the needs of large, profit-oriented entities in the private-sector rather than for the public-sector‟s specific needs for performance reporting and pitched at a higher or more conceptual level than is typically required for financial reporting standards (Office of the Auditor-General, 2008, Webster, 2007). This may be due to the fact that the current authoritative requirements, developed in early 1990s, have been influenced by the economic framework highlighting the decision-usefulness purpose of private-sector reporting, which is not suitable for public-sector reporting (Mack, 2003; Parker & Gould, 1999). Responding to the need for more adequate guidance for non-financial performance reporting of public-sector entities, the OAG and the International Public Sector Accounting Standards Board (IPSASB) are working on improving accounting guidance applicable for the preparation for SSP reporting by public-sector entities (Office of the Auditor-General, 2010; International Public Sector Accounting Standard Board, 2010). Pallot (1992) points out that accountability is the preferred purpose for public-sector reporting since the nature of the relationship between providers and users of government is non-voluntary. Past theoretical literature has attempted to define the possible components of accountability that would be suitable for public-sector entities to adequately discharge their accountability. Among them, Stewart (1984) has developed accountability bases, which provide a platform for understanding accountability expectations and, hence desirable characteristics of any accountability documents provided by public-sector entities for the public. It is possible that accountability documents pertaining to these accountability expectations will enable the public-sector entities to adequately discharge their accountability. New Zealand local government is the important second tier of New Zealand government sector. Among the wide range of community services provided by New Zealand local authorities, wastewater services represent one of the most crucial services. New Zealand constituents could be expected to be concerned not only about the performance of wastewater services provided by their local authorities, but also with the disclosures about that performance. However, the research on SSP wastewater disclosures by New Zealand local authorities is limited (Smith & Coy, 2000). Given the criticism on the usefulness of authoritative requirements for SSP reporting and the recognition of accountability expectations by the literature, the first two objectives of this study are to examine the consistency of SSP disclosures, regarding wastewater services provided by New Zealand local authorities, with the existing authoritative requirements, and the accountability expectations, using the disclosure index as a measurement tool. To understand possible explanations for the cross-sectional differences on the extent of disclosures, according to the authoritative requirements and accountability expectations, the third objective of this study is to examine the influential factors of the disclosures, using multiple regression analysis. The study finds that the performance disclosures made by the local authorities have low levels of correspondence with the index that is based on the authoritative requirements. The result also provides evidence that the current authoritative requirements are focused on financial information reporting and pitched at a high conceptual level. This supports the view that the existing authoritative pronouncements are not providing sufficient guidance for local authorities. The index based on accountability expectations has relatively greater correspondence with the disclosures made. This identifies that local authorities are providing information consistent with accountability expectations. The study suggests that accountability expectations provide a model suitable for SSP reporting guidance. According to the multiple regression analysis, the result shows that only size is significantly related to the extent of the disclosures. Larger local authorities report more corresponding information. The findings of this study provide three immediate implications which should be useful to: (i) accounting standard-setters for their current work on improving accounting guidance for SSP reporting; (ii) the Office of the Auditor-General for providing more insightful comments in the audit statement for SSP reporting; and (iii) regulators for increased attention on some special local authorities. By doing so, it is expected that New Zealand local authorities may lead the world in providing comprehensive SSPs, which enable them to adequately discharge their accountability and, hence in reaching a reform principle for greater accountability.</p>

The Impact of Performance Audit: the New Zealand Experience

<p>Performance audit, compared to the traditional financial and compliance audits, is a relatively new innovation that emerged amidst accountability concerns in the public sector. Economic crises, ministerial scandal and inefficiencies were among the impetus that led the public to demand better performance and greater accountability in the public sector, and performance audit was among the many responses to such demand. In New Zealand, performance audit is carried out by the Controller and Auditor General (the AG) under the mandate granted by the Public Audit Act 2001. Adapting the methodology from grounded theory, this study looks at the impact of performance audit on seven entities audited in 2006 by the AG. This study found that the entities were impacted through the manifestation of implemented audit recommendations and the attainment of performance audit goals. In particular, there is a high acceptance and implementation rate to the audit recommendations made in the seven audits. The implementation of accepted recommendations consequently led to the changes within the entities in terms of managerial practices, as well as internal systems and processes. In some entities, these changes were translated into performance improvement, where the entities experienced changes in the way that they carried out their operations. However, based on interviewees' accounts being the auditees of the audits, most interviewees viewed performance audit as having a greater role for performance accountability compared to performance improvement. Whilst the auditees found the audit recommendations useful, the impact on performance in their view has not been significant. Rather, the auditees viewed performance audit as having a more important role as an assurance tool in terms of their accountability to the public.</p>

The Impact of Performance Audit: the New Zealand Experience

<p>Performance audit, compared to the traditional financial and compliance audits, is a relatively new innovation that emerged amidst accountability concerns in the public sector. Economic crises, ministerial scandal and inefficiencies were among the impetus that led the public to demand better performance and greater accountability in the public sector, and performance audit was among the many responses to such demand. In New Zealand, performance audit is carried out by the Controller and Auditor General (the AG) under the mandate granted by the Public Audit Act 2001. Adapting the methodology from grounded theory, this study looks at the impact of performance audit on seven entities audited in 2006 by the AG. This study found that the entities were impacted through the manifestation of implemented audit recommendations and the attainment of performance audit goals. In particular, there is a high acceptance and implementation rate to the audit recommendations made in the seven audits. The implementation of accepted recommendations consequently led to the changes within the entities in terms of managerial practices, as well as internal systems and processes. In some entities, these changes were translated into performance improvement, where the entities experienced changes in the way that they carried out their operations. However, based on interviewees' accounts being the auditees of the audits, most interviewees viewed performance audit as having a greater role for performance accountability compared to performance improvement. Whilst the auditees found the audit recommendations useful, the impact on performance in their view has not been significant. Rather, the auditees viewed performance audit as having a more important role as an assurance tool in terms of their accountability to the public.</p>

Capacity of ZAECA in Conducting Research and Guidance to Fight Corruption in Zanzibar

The main focus of this study is to examine the capacity of ZAECA in conducting research and guidance to fight corruption in Zanzibar. The study employed a descriptive case study research design. The target population of this study was employees in the Ministry of Public Services and Good Governance and its Commissions and Authorities including; ZAECA, Commission for Good Governance, Commission of Ethics in Public Services, Commission for Human Rights, Institute of Public Administration, Control Auditor General (CAG) and the office of Director of Public Prosecution (DPP). Judgmental sampling and simple random sampling techniques were used to select a sample size of 85 respondents. The study found that ZAECA does not have sufficient powers to effectively carry out its mandate and the respondents rated a moderate capacity in conducting research and guidance to fight corruption, human resources and independence. The study concludes that ZAECA does not have sufficient powers to effectively carry out its mandate and that ZAECA is not free from undue influence. Finally, the study recommended that the government should ensure that ZAECA is independent and autonomous by clearly delinking it from political influence.