Audit: Malaysia's federal liability rose to RM1.187 trillion in 2020

AUDIT REPORT | Cooperation from all levels, including at the Responsibility Centre and Department, as well as continuous monitoring that is effective at the ministerial level are needed to ensure that financial discipline can be implemented.

The Auditor-General's (AG) Report 2020 is of the view that the preparation of a clear work procedure, understanding and compliance with financial regulations, as well as close supervision of the duties of officers will create a work culture and practices that are of quality and with integrity.

According to the report released today, the federal liability in 2020, which comprised federal debt and financial liabilities, increased 9.9 percent to RM1.187 trillion compared with RM1.080 trillion in 2019.

“The ratio of federal liability to the gross domestic product (GDP) is at 83.8 percent in 2020, higher than 71.3 percent in 2019,” it said.

Hence, the Audit Department has proposed to the government to improve the expenditure management discipline, empower efforts to generate revenue and monitor its commitment to loan repayment.

“This step is important so that surplus revenue can be enhanced to fund development expenditure, hence reduce the dependency on new loans,” the report said.

The Audit Department has also proposed to the government to set a consistent policy in accounting for the premium and discount from the issuance of Government Debt Security, as well as ensuring that the Development Fund is utilised for projects and programmes that have high multiplier effects on the nation's economic activities.

The ceiling on debt guarantees made by statutory bodies and companies must also be set to avoid additional burden commitment to the government if the statutory bodies and companies are faced with difficulties to fulfil their obligations.

In 2020, the federal debt which comprised domestic and foreign loans increased 10.9 percent to RM879.56 billion, compared with RM792.99 billion in 2019.

- Bernama