Fadzmel Fadzil says the rural and regional development ministry’s spending remains subject to government procedures and approvals.
Fadzmel Fadzil said the government’s financial procedures did not allow ministries to spend arbitrarily, with all allocation requests submitted to the finance ministry, and all expenditures processed through the government’s Integrated Government Financial Management Accounting System.
“All development programmes and projects must also be approved by the economy ministry.
“I am not sure how the Treasury secretary-general can say that the rural and regional development ministry had spent more than its approved allocation,” he said in a statement.
Earlier today, Treasury secretary-general Johan Mahmood Merican said contractors handling rural development projects faced delayed payments because most of this year’s allocation for rural roads had already been spent.
Johan said the rural and regional development ministry consistently recorded spending above its approved annual allocation for rural road projects in recent years, with RM1.8 billion spent in 2023 against an approved RM1.1 billion allocation, RM2 billion in 2024 against RM1.3 billion, and RM2.3 billion in 2025 against RM1.6 billion.
He said that as of June, the ministry had spent RM1.9 billion of the RM2.1 billion allocated for rural road projects this year.
However, Fadzmel said Treasury instructions governed all expenditure and that the government’s financial system did not allow for expenditure to be incurred without the necessary details and approved allocations in place.
“As such, to say that spending has gone beyond what has been allocated gives an inaccurate picture of what has really happened,” he said.
He said Johan’s statement did not include data for 2019, 2020 and 2021, which he described as crucial to understanding the relationship between project commitments, allocations and payments.
“During that period, Malaysia was hit by the Covid-19 pandemic. Although the implementation of some projects was affected, letters of acceptance for certain projects had already been issued, creating contractual commitments dating back to 2019-2021.
“When the projects resumed, payment claims from contractors were carried forward to subsequent years,” he said.
Fadzmel said the government was obligated to make payments based on work progress and contractual obligations once contractors had carried out the work, and projects could not simply be halted because the annual allocation was nearing its limit.
He said the ministry had formally applied to the finance ministry in the second quarter of this year for funds to meet deferred payments for ongoing projects.
He also said the two ministries would continue working together to find a comprehensive solution to settle all government commitments and prevent the perception of wrongdoing or irresponsibility in managing allocations. - FMT
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