Article Search : Mrs. Nurul Ezani Abdul Malek

Article By : Dato Sri Akhbar Satar, Ahli Lembaga Penasihat Pencegahan Rasuah (LPPR) dan Presiden, Persatuan Pemeriksa Fraud Bertaulaih Cawangan Malaysia

Source : https://www.sprm.gov.my/index.php?id=21&page_id=103&contentid=2593&cat=BKH

 

 

Order a motorcycle, get a bike, pay the price of a car. This is among what still happens in government contracts when corruption activities are rampant among government officials and politicians who conspire with contractors and including cartels. It turns out that they don't like to 'wear' iron bracelets and orange shirts and then go inside the iron bars. This heinous act will continue and it is difficult to predict when it will end based on the latest developments.

Last year, the Malaysian Anti-Corruption Commission (MACC) arrested seven individuals believed to be members of a syndicate that monopolized the tenders of ministries and government agencies, including the 47-year-old leader, thereby paralyzing project cartels and government tenders with an estimated project value of RM3.8 billion.

The cartel involved monopolizes 345 tenders, controls more than 150 companies from several government ministries and agencies to enter tenders or quotes across the country and is believed to have been operating since 2014.

MACC arrested a government agency material surveyor who is believed to have leaked project specification information for the preparation of a Bill of Quantity (BQ) to facilitate the preparation of tender documents.

Manipulation of tenders in government departments has been going on for a long time. During pandemics and emergencies, many regulations are relaxed. Most dangerously, contracts are awarded through direct negotiations, falling to cartels that have good connections with insiders or gunpowder.

Fraud activities can only occur when there is cooperation between insiders and certain companies. Government officials and politicians who do not trust the power to approve contracts will be identified as weak. As humans, some are weak with wealth, thrones or women. 

Syndicates, cartels or contractors will fulfill whatever they want. When it has fallen, dignity will be pawned. Information and specifications will be leaked, even willing to give contracts to cartels or cronies, thus accepting bribes for wanting to live in luxury. 

MACC identified 16 forms of malpractice that frequently occur in the procurement system involving officers entrusted with managing procurement and supplies. 

This includes receiving a commission of between 5 to 10 percent based on the value of the project from the successful company. There is inside information saying that the cartel can give bribes because the contract price has increased by up to 30 percent. 

This information is the same as stated by Tan Sri Ambrin Buang, the former Auditor General, more than 30 percent of the value of public sector projects in Malaysia is lost due to mismanagement and corruption. Imagine how much savings could be used or new projects could be implemented effectively using that lost amount. 

Insiders leak information, including contract values ​​so that a particular cartel or contractor wins a particular tender. 

This modus operandi is also popular when one party plagiarizes the proposal paper submitted by another party and then gives it to a certain company. It has bad implications for other more deserving companies.

There are corrupt ministers and officials with no integrity supporting and deliberately asking certain companies to come in with higher quotes. Some create quotes using a specific company's letterhead or profile without knowing it. There are also those who conspire with the supplier company to get quotes from five other companies as a condition of complying with the rules. These people damage the reputation of the department and other parties with integrity. 

Although Malaysia practices e-procurement, in the end it is also humans who receive, process and determine which party will succeed in getting the contract. This is where manipulation and sabotage take place so that only crony or cartel companies are shortlisted, including companies owned by the same person. People who have good relationships and have interests with decision makers are often offered contracts even if there are other companies that are more qualified and authoritative. 

The department head should be responsible and all contracts should be offered to qualified and reputable companies only. Comprehensive due diligence is appropriately implemented, including reviewing financial documents and verifying past project capabilities of a company that will be offered a contract. 

When corruption becomes flesh and blood, the hands are tied and the mouth is closed until weak and according to whatever the wishes of the cartels or contractors involved. These people are kept by certain contractors until they are afraid to take the right action. 

Sometimes the contractor himself brings a proposal paper to be considered and implemented (contractor driven). Of course, politicians and public officials who have no integrity take the golden opportunity to act to find provisions to cover the purchase proposed by the contractor even though there is no economic value and benefit to the department or the community. 

Before a project is implemented or equipment is purchased, there needs to be a need and planning, which is why many projects have been completed but become white elephants. 

The saddest thing is that giant projects worth billions are not completed while more than half of the payments are made through the "time based" method instead of "progress based". 

Since 2010, the author has suggested several times that all officers in high-risk departments such as the contract and finance departments should be assigned high moral officers and be changed every three years. Furthermore, supervision by superiors should be increased so that the probability of corruption, fraud and leakage can be avoided.  

Responsible ministers also need to have high integrity values ​​and set a good example. Every misbehavior is also known to the public "as clever as a squirrel jumps and eventually falls to the ground as well." 

As public officials, although they cannot reject the intervention of politicians, they can exercise their right to ignore instructions that are against the law.

According to MACC, corruption involving leaks in government procurement is seen as increasingly critical and he says 50% of cases involve government agencies. 

Corruption practices, abuse of power and irregularities in the procurement system can have negative effects not only on the community as consumers, but also losses and leakages to the government. 

It can harm the community if equipment, services or projects should be completed, abandoned or non-existent, thus thwarting the government's efforts to improve the quality of services to the community. 

Corruption can become a culture and cause dissatisfaction and loss of public trust in the government. 

A surprise inspection on the implementation of the project should be carried out to coincide with the concept of going to the field. Supplier or contractor companies that fail to meet the terms of the contract or quotation must be blacklisted and taken legal action or given to another contractor. 

Before making payment to the contractor, a team should make a visit to confirm the project implementation status. 

Although the authorities have improved systems and procedures compared to a decade or two ago, the leakage issue still receives attention, including the results of the Auditor General's Report. 

The standard operating procedure (SOP) of the financial management system, especially in terms of differentiating discretionary power is always abused and needs to be reviewed. However, all procedures must be followed and there are no exceptions. 

Therefore, department heads need to be more responsible, accountable and sensitive to corruption, abuse of power and corruption. 

Introducing the provision of 'misconduct by public servants' (including politicians) into the MACC Act 2009 which resulted in large financial losses borne by the government. The government can draft laws to take punitive action against officials who intentionally cause leakage, extravagance, waste of government funds and lack of supervision. 

Every project implementation using the best internal control system will be in vain if the operator has no integrity. 

In this regard, the cooperation of the public, public officials and politicians is important to enable MACC to act effectively. If every public official has a work ethic, integrity and trust in carrying out their duties, leakages can be overcome. Dismantle and report corrupt activities to MACC for the future of the country because corruption is the mother of all evil.Disclaimer: This article is the author's opinion and has nothing to do with MACC's official position. 

Date of Input: 21/02/2023 | Updated: 02/03/2023 | muhammad.isam