Youth and Sports Ministry RM100m fiasco: Were the auditors sleeping?

As published in Malay Mail today

Reports by Haresh Deol, Vanessa Ee-Lyn Gomes, Wan Noriza Meor Idris and Anith Adilah

Sports fraternity in disbelief, demands transparency

PETALING JAYA — Athletes and sports officials were shocked and angry over how a ranking Youth and Sports Ministry official had misappropriated RM100 million of the ministry's funds since 2010 without raising any red flags.

Mohd Hariff Saleh of Terengganu Cycling Team was fuming upon reading the arrest of the 56-year-old suspect in the news yesterday. Also seized from the official were RM20 million worth of items including 12 vehicles, 40 designer handbags, expensive watches and fine jewellery. His 69 bank accounts which contain RM8.33 million were also frozen.

“This should not have happened. The money could have been channelled to the athletes and the associations instead of buying luxurious handbags or jewellery,” Hariff said.

“The money belongs to the people, to Malaysian youths and sports. Events are being cancelled because of lack of funds but apparently, money was being pocketed by corrupt people.”

He said civil servants should realise they were there to assist athletes and not take advantage of them.
“I hope the ministry would be more transparent and introduce tighter regulations on financial matters. Every sen counts,” he said.

National bowler Alex Liew said the ministry should take this matter seriously.

“I am shocked. I hope the ministry will handle this matter pro-actively,” said Liew, who bagged two gold medals at the 2010 Asian Games in Guangzhou, China.

National badminton ace Datuk Lee Chong Wei was also left speechless.

“I just don't know what to say ...  I'm shocked. Let's wait for the authorities to wrap up their investigations,” he said.

A disappointed National Archery Association of Malaysia president Yazid Yahya urged the ministry to be more transparent.

“We have heard of such things in the past and thought we had learnt from it, but it looks like we haven't,” he said.

“It is always difficult for us to ask funds and there is always red-tape involved. We went to an Olympic qualifying event in Turkey last year and only received our allocation from the ministry 10 days before the event. Now, we are being told RM100 million had been syphoned. It is frustrating.”
Malaysian Gymnastics Federation secretary N. Shanmugarajah said funds within the ministry should be controlled.

“All expenditure must be approved and strictly monitored. We must be transparent in our dealings,” he said.

“We trusted certain people and this is what happened. Now, the whole world knows about it and it is bad.”

Sportswriters Association of Malaysia president Ahmad Khawari Isa questioned how the official misappropriated the funds over six years without being noticed.

“We're shocked with the development. We believe the ministry conducts its dealing above board but this shows something is clearly lacking within its system,” he said.

“We would like the ministry to reassure us that all funds, especially concerning athletes, are managed in a transparent manner.”

More to be hauled up by MACC

PETALING JAYA — The Malaysian Anti-Corruption Commission (MACC) are expected to interview more people as the anti-graft body is tracing the money trail following the arrest of a ranking Youth and Sports Ministry officer who misappropriated RM100 million over the past six years.

Those representing various programmes, where the funds were dubiously channelled to, will also be questioned as MACC are determined to uncover if anyone else within the ministry or its agencies were working hand-in-glove with the suspect.

The 56-year-old officer was arrested during a raid last Friday.

MACC said the money was channelled to the contractors' companies and the suspect's bank accounts through the National Sports Council.

Its investigations division director Datuk Azam Baki said the suspect had allegedly withdrew RM500,000 from one of his 69 bank accounts a day before he was arrested.

Some RM200,000 of it was used to pay his credit card bills while RM40,000 were transferred to his son's bank account.

The suspect is married with two sons, both in their 20s. One of them is a businessman while the youngest is studying in Australia. The suspect's wife is a homemaker.

“The suspect transferred RM40,000 to his son's bank account for accommodation and expenses as he is studying in Australia,” Azam said.

During the raid, MACC seized several goods from the suspect worth about RM20 million. These include designer handbags, luxury vehicles and an art piece ''Tree of Serenity'' by renowned Australian fine art photographer Peter Lik. The piece, worth RM62,000, was bought from the artist's gallery in the United States.

A collection of fine jewellery, including a Cartier pearl ring which costs RM600,000, was seized from his office in Putrajaya.

“The suspect and his family would travel first class to Europe, US and Australia at least once a month,” Azam said.

He said MACC was still investigating how many houses the suspect received as kickbacks from his eight accomplices who were also arrested on the same day.

“As of now, we are only aware of two houses — a semi-detached house and a terrace house,” he said.

Auditors must explain RM100m fiasco
PETALING JAYA — The Youth and Sports Ministry’s internal auditors should have spotted the misappropriation of funds by a ranking officer over the past eight years, said Transparency International-Malaysia (TI-M).

Its president Datuk Akhbar Satar said external audits, usually conducted by the Auditor-General’s office, was done randomly and the onus is for the internal auditors to redflag irregularities.
“Only five per cent of the transactions are checked by the Auditor-General which could be the reason why they did not spot the irregularities. This, however, is the mistake of the ministry’s internal auditors,” said Akhbar.

“If they were linked to the misappropriation, then it is a very sad case. If they are not involved, then procedures must be strengthened further.”

To prevent similar episodes, he said officers who are tasked to oversee important and financial matters should not occupy the post for more than three years to prevent abuses.
“We have to make sure this does not happen again. There must be a proper standard operating procedure and strict supervision by the higher ups.”

Akhbar commended the Malaysian Anti-Corruption Commission (MACC) for their efforts and urged more people to come forward and fight corruption.

The National Union of the Teaching Profession secretary-general Datuk Lok Yim Pheng expressed her sadness over  how a civil servant could manipulate taxpayers' money for personal gain.
“As government servants, we are entrusted to carry out our duties and we should do our jobs with the highest of integrity,” she said.

“The money was contributed by the public and it was for training and programmes to benefit the people. It is unfair one person utilised the money for his benefit.”

She was glad MACC had uncovered the case.

“This is a timely reminder for those tasked to manage government funds. Total autonomy should not be given to just one person.”

Malaysian Trades Union Congress secretary-general N. Gopal Krishnam believed this case was just the tip of the iceberg.

“What were the respective heads of the ministry doing all this while? The money should have been audited and accounted for as this has been going on for a number of years,” he said.

Gopal said there were sufficient policies but enforcement had to be stepped up.

“Stern action should be taken against those who meddle with public funds.”

Cap tenure of key civil servants, says minister

PETALING JAYA — A senior minister said it was time for civil servants occupying vital positions to be promoted or transferred after two years.

Agriculture and Agro-based Industry Minister Datuk Seri Ahmad Shabery Cheek was shocked to learn a ranking Youth and Sports Ministry officer was arrested by the Malaysian Anti-Corruption Commission (MACC) for misappropriating RM100 million for more than six years.

“This should not have happened but it did. It is time for the Public Service Department and Chief Secretary of the Government to promote or transfer public servants holding sensitive seats, including managing finances, to another department after two years,” he said.

“This will ensure the individual will not get too comfortable in his position or else it could lead to abuse.”

MACC revealed the 56-year-old suspect has been occupying the post for the past eight years.
“Ministers and the ministry’s secretary general come and go but the civil servants are there to stay. Ministers trust civil servants as we come up with policies but it is they who advise us about operational matters,” Ahmad Shabery said.

He said such a situation could happen in any ministry.

“I will bring this matter up to Prime Minister Datuk Seri Najib Razak at the next Cabinet meeting (next Friday),” he said.

Ahmad Shabery, who was Youth and Sports Minister before being succeeded by Khairy Jamaluddin, said he did not remember dealing with the suspect in the past.

“The name sounds familiar but I can’t recall any dealings with him. I usually deal with the ministry’s secretary-general. Maybe if I saw him, I would remember him,” he said.

Natural Resources and Environment Minister Datuk Seri Wan Juniadi Tuanku Jaafar also expressed shock over the fiasco, adding that it would keep “ministries on their toes”.

“The MACC will ensure the officer involved will be brought to justice. At this point, the minister and other senior officials in the ministry cannot cover up,” Wan Juniadi said.

He said ministries had their respective integrity units and such units should start paying close attention to such matters.

“There should be strict monitoring of such issues and better management of funds,” he said.
Deputy Finance Minister Datuk Johari Abdul Ghani said: “Payments of programmes that never took place are an indication there is weaknesses in the system.

“We need to institute a mechanism of check and balance within the approval, execution and payments.”

Public Accounts Committee deputy chairman Dr Tan Seng Giaw said public funds must be handled according to ethics and laws.

“I have always maintained that transparency and accountability must, at all times, be present especially when it comes to public funds,” he said.

Serdang MP Ong Kian Ming was disappointed over such news.

"It is a travesty to taxpayers if the allegations were true," he said.


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