Development of new ePerolehan system delayed by 3 years - AG Report

 

The development of the new ePerolehan system was not efficient and effective, as it was delayed by three years, according to the Auditor-General Report (AG Report) 2019.

The AG Report Series 1, which was tabled in Parliament today, concluded that there were some weaknesses in the system in terms of application control that was not in accordance with government regulations.

"The procurement for the development of the new ePerolehan system was not in compliance with the regulations, as there had been no exemption for the Value Management Laboratory (VM Lab) by the Economic Planning Unit (EPU) or approval from the Information and Communications Technology (ICT) Steering Committee at the Finance Ministry level," it stated.

The audit, which involves the ministry's Government Procurement Division, found that an additional cost of RM28.27 million had been paid to the contractor for the system, which was developed as a transformed version of the existing procurement system.

Additionally, the AG said the Finance Ministry had delayed its claim for Liquidated Ascertained Damages (LAD) totalling RM16.3 million from the contractor, as well as in imposing a penalty totalling RM34,870 for failing to adhere to the Service Level Agreement (SLA).

According to the report, the ministry said that a letter on the claim for the LAD had been issued to the contractor on June 25, 2020, following the decision made by the Procurement Management Committee Meeting on June 22, 2020.

Nevertheless, the AG opined that overall, the new ePerolehan system had benefitted the public service sector, as the procurement process had not been affected during the movement control order, which started from March 18, 2020, due to the Covid-19 pandemic.

To address the weaknesses raised and ensure that the same thing would not recur, the AG recommended for the Audit Tracking and Reporting sub-module to be completed immediately and given priority in the operations phase.

The report also recommended for the new ePerolehan system to be improved by adding a restriction function to procurements which do not comply with procedures.

"The Finance Ministry needs to get approval from the EPU for the VM Lab exemption and the ICT Steering Committee to implement the new ePerolehan system through the Outsourcing of Services method," it said. - Mkini