PARLIAMENT | The 2026 Auditor-General’s Report Series 1 has flagged several weaknesses in the early implementation of the MyDigital ID development project under Mimos Berhad’s management.
This includes spending RM28.13 million without approval.
The report, presented in the Dewan Rakyat today, found that the project’s governance structure did not function as intended, leading to a lack of formal presentations on expenditure approvals and project implementation status during meetings.
According to the report, an audit review discovered that Mimos spent RM28.13 million between December 2023 and March last year without prior verification by the project’s steering committee and technical committee.
While further audit reviews found that the expenditure was verified on Oct 25, 2024, by a steering committee appointed in 2021 under the Home Ministry, this was not the committee which Mimos was required to obtain approval from, as mandated through a Dec 12, 2023 letter.
In a Jan 9 response to the Auditor-General’s Department, the Science, Technology, and Innovation Ministry, which oversees Mimos as the national applied research and development centre, took note of the matter.
Mimos, in a response received by the department on Nov 27, 2025, said its special purpose vehicle, MyDigital ID Sdn Bhd (MYDIDSB), has a procurement Limits of Authority (LOA) approved by Mimos’ board of directors, with all approved procurements in line with the LOA.
“Project management and decisions are made entirely by MYDIDSB’s top management. Mimos only manages the procurement and payment processes on behalf of MYDIDSB as a shared service provider,” it added.
On July 21, 2023, Mimos was appointed as the implementing agency for the MyDigital ID project and placed under the Home Ministry as well as the National Registration Department as the supervising agencies.
An RM80 million development allocation was channelled to Mimos, which bore the responsibility of submitting a detailed breakdown of the allocation to the Home Ministry.
The RM80 million was transferred to MYDIDSB on Feb 20, 2024, after its incorporation as a special purpose vehicle.
Some operational expenditure falls on Mimos
Reimbursements by MYDIDSB on Mimos’ claims for the RM28.13 million expenditure were made through eight payment transactions between May 6, 2024 and April 11, 2025, totalling RM28.01 million, with Mimos not yet receiving RM120,000.
The audit established that while Mimos claimed RM14.17 million under sub-scope E14 on project management, RM14.09 million (99.4 percent) constituted operational expenditure not in line with the 12th Malaysia Plan’s (12MP) guidelines.
The operational expenditure, the report stated, comprised emoluments worth RM14.09 million for up to 98 officers, resource costs amounting to RM850,000 for 57 officers, staff medical benefits, and office equipment.
“The audit found these claims were emoluments that should have been borne through Mimos’ operating funds and should not have been claimed under the MyDigital ID project allocation,” the report declared.
“Development allocation is not permitted to pay operational expenditure, including emoluments, as stipulated under the 12MP’s guidelines. Mimos representatives must carry out their fiduciary duty in ensuring compliance with stipulated conditions.”
In responses on Nov 14 and 27 last year, Mimos said the RM80 million allocated fund is the “sole financial source” for the implementation of the project, covering asset purchases and operational financing.
“Accordingly, all project expenditure and activities are fully dependent on these funds to ensure that the planned project scope can be effectively implemented.
“MYDIDSB has not received any operating allocation since its establishment to date, including for 2026, based on the latest budget gazette. MYDIDSB continues to utilise the project development allocation not only up to March 2025, but on an ongoing basis until now,” it added.
The Science, Technology, and Innovation Ministry, in a response on Jan 9, said it will ensure that Mimos does not use development allocations to cover operational costs in the future.
RM4m overspending, unused procurements
The audit further zoomed in on how Mimos’ approach to the project’s implementation saw it spending RM4.08 million beyond its allocated budget of RM23.16 million for 11 sub-scopes.
The expenditure exceeding the allocation, the report stated, was due to changes in sub-scopes that were not brought to the project’s steering committee and technical committee meetings.
While the total cost for one of the sub-scopes on data centre services amounted to RM1.47 million, the expenditure totalled at RM1.54 million - an excess of RM70,000 (4.8 percent).
Under the same sub-scope, Mimos also procured Certificate Authority (CA) equipment, namely two units of door access and a security cage on Feb 23 and 29, 2024, respectively, for RM79,000.
However, the project’s steering committee had earlier agreed that Mimos should submit detailed specifications on the procurement of the CA to the Home Ministry for a value assessment process.
Citing the value assessment report conducted from July 22 to 24, 2024, the audit said the CA development was not agreed on by the relevant committees and was recommended to be removed from the project scope, as Mimos is not the implementing agency for the CA.
“Physical inspection by auditors on Aug 5 last year found that this equipment was not used and remained placed at the Mimos data centre.
“Procurement by Mimos without approval from the Value Assessment Lab indicates weaknesses in internal control and non-compliance with procurement approval procedures, affecting project governance and resulting in wastage of assets purchased that were not used for the project,” it added.
Mimos, in its response to the auditors, said the assets were in good condition and fully functional.
Stick to requirements
As part of its overall recommendations, the audit report called for all project expenditures to be implemented with approval from the relevant committees, in compliance with the approved cost structure and purpose of allocation.
This, it said, includes adherence to the 12MP’s development project implementation guidelines to avoid unauthorised expenditure through development funds.
It also urged that the governance of development grants be strengthened to ensure decisions related to allocation, project implementation and procurement are made transparently, accountably, and in accordance with existing regulations.
It also highlighted that such measures will enhance corporate governance, improve the effectiveness of development grant utilisation, and ensure the original objectives of the grant are achieved. - Mkini
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