RM1.26mil in charge card use by Khazanah staff

AUDIT REPORT Certain individuals in the government's financial arm, Khazanah Nasional Bhd, are still allowed to use its corporate charge card despite Khazanah failing to declare its expenses from the earlier months.

As a result, unrecognised expenses on charge cards issued to Khazanah Nasional accumulated to RM1.26 million last year alone, the highest amount in four years.

This comprises unpaid balance in excess of one month at RM487,317; a sum of RM291,400 for two months and RM485,187 over a period of two to six months.

In 2009, the amount of unpaid dues was RM610,902; while in 2010 it dropped to RM270,330 and it hiked to RM726,462 in 2011.

The audit report states that based on a financial communication note dated June 1, 2006, American Express charge cards were issued to directors and the chief executive of Khazanah Nasional. As of Dec 4, 2012, there were 106 such charge cards issued by Khazanah, with no limit on the usage.

The report also says that the charge card users have been reminded to prepare an analysis of their monthly expenditures, verify the expenditures with the receipts attached and to get approval from their heads of department.

"If the expenditures are not approved, the payment will be obtained from the card holders by cutting their salaries. Failure to provide an analysis and verification for three times would result in such privileges being revoked," the report says.

The auditor-general also found there were some Khazanah staff who failed to send or declare their monthly expenses, resulting in the unpaid RM1.26 million in card charges.

According to explanations from the Khazanah officer responsible, the balance has been settled by Khazanah despite the staff not declaring their expenses.

Khazanah further explained that it had conducted an internal audit on the expenditure claims between 2011 and 2013, and the failure by those responsible to send in their lists of expenses was also discussed.

The staff may use the corporate credit card even though they failed to declare the expenses for the month before. There is minimum risk in this, since Khazanah can cut the salary of the individual concerned to recover the expenditure.

Khazanah added that it would take action to stop the use of the corporate charge card of staff who keep failing to declare his or her expenses.

However, the auditor-general said failure to file the monthly expenses declaration was improper.

Artworks not properly kept

The report also found that Khazanah had purchased 93 artworks worth RM6.4 million.

Of the amount, 55 works of art costing RM3.05 million that were purchased since 2005, have not been properly displayed or kept in a proper manner and there are concerns that these could be damaged.

Khazanah in its reply in May and June this year said it was planning to place the artworks at a proper room on the 32nd floor of its office block and also in its new offices overseas.

It also plans to change the location of the existing paintings and for all the artworks to be placed after renovations to the interior decoration of its office, which was approved this year.

The renovations should be completed by the end of the year.

The auditor-general also said all the Khazanah assets needed to be fully utilised to justify their purchase.

On a positive note, the auditor-general commended Khazanah for making profit for the fourth consecutive year.