A-G’s Report: RM2.88 million paid for non-existent paint job

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PETALING JAYA: The Sarawak Housing Development Corporation (Perbadanan) paid out RM2.88 million to two contractors for the repainting of 12 public housing units, even though they didn’t carry out the work, according to the 2016 Auditor-General’s Report.

In an audit carried out between March and May last year, the A-G found that some procurements made by Perbadanan, a corporate entity under the Sarawak state housing ministry, did not abide by provisions of the Financial Procedure Act and other procurement rules.

Aside from the RM2.88 million payments for the repainting, the audit also found that the payment for Package 1 and Package 2 of the Jalan Utama upgrading project in Sibu were made in advance without the necessary authorisation.

The advance payment of RM16.08 million resulted in the Sarawak government being hit with RM1.77 million in interest as a result of late payments to Perbadanan’s partner HDCam Sdn Bhd, which funded the works first.

The audit also found that payments amounting to RM33.40 million were made to suppliers without being verified by the officer who had the authority to do so, while six payment vouchers amounting to RM20.77 million were also not supported by Payment Certificates.

The audit also highlighted issues with the construction of the Riverside Majestic Hotel in Kuching, Sarawak.

The hotel belongs to Sejadu Sdn Bhd, a subsidiary of Perbadanan Pembangunan Ekonomi Sarawak (PPES), which received an offer from the Sarawak government to develop the vacant land where the hotel is to be situated.

The original value of the 24-month project was RM59.89 million, and construction was to commence on June 24, 2012.

But the audit carried out between November and December 2016, found issues with the management of the project, namely the failure to complete the project despite seven extensions amounting to 758 days.

The project’s cost had also increased by some RM8.07 million, representing a 13.5% increase from the original costs.

It noted that Liquidated and Ascertained Damages (LAD) charges weren’t imposed for work which was delayed by 148 days.