KUALA LUMPUR – Serious procurement and governance irregularities involving Felcra Bhd, Universiti Kebangsaan Malaysia (UKM), and the Defence Ministry were among the key findings in the Auditor-General’s Report (LKAN) 2025 Series 2, tabled in the Dewan Rakyat today.
Auditor-General Datuk Seri Wan Suraya Wan Mohd Radzi, in a statement, said the three audits – on Felcra’s land leasing, UKM’s tendering process, and the Defence Ministry’s management of armoured vehicles – revealed critical weaknesses in oversight and procurement practices.
In Felcra’s case, she said there were governance issues in the leasing of four oil palm plantations between 2022 and 2024, involving acquisitions worth RM241.76 million.
At UKM, the audit uncovered “serious irregularities and weaknesses” in the tender procurement process and governance, involving three tenders worth RM58.45 million.
As for the Defence Ministry, Wan Suraya cited poor contract administration and procurement management for armoured vehicles from 2020 to 2023. This included RM162.75 million in uncollected penalties and RM1.42 million in penalties that were never imposed on the company for delays in maintenance services.
Additionally, RM107.54 million worth of maintenance and supply contracts for armoured vehicles had been split into smaller packages – a practice flagged as improper.
The report also highlighted weaknesses in the Domestic Trade and Cost of Living Ministry’s (KPDN) handling of the subsidised cooking oil programme. The audit found no targeted allocation system for vulnerable groups, reducing the effectiveness of the subsidy.
Wan Suraya said KPDN’s move since 2016 to reduce the subsidised oil supply quota should continue, as it could help limit leakages and improve targeting, in line with audit recommendations.
Separately, she raised concerns over the Finance Ministry’s Selective Pre-Qualification Procurement Method. She said the process “allowed room for manipulation and lacked transparency”, noting that some companies which failed initial evaluations or were not invited were still shortlisted in later stages.
“The audit recommends that the method should not be continued and that the open tender method is more appropriate to ensure accountability and transparency in the procurement process,” she said.
In total, five audits covering seven ministries were conducted, involving programmes, activities and projects worth RM48.87 billion. The Auditor-General submitted 22 recommendations to ministries, departments, and government-linked companies.
Wan Suraya added that audits by the National Audit Department from 2024 to June 2025 helped the government recover RM157.73 million, including through penalty claims, unpaid rent, and tax and duty collections.
The full report is available from 10am today at http://lkan.audit.gov.my and https://agdashboard.audit.gov.my. – July 21, 2025