Speech by Parliamentary Opposition Leader, DAP Secretary-General and MP for Tanjong, Lim Kit Siang, in the Penang State Assembly on the Public Accounts Committee on Thursday, 8th July 1993
Mohd Zain is not fit to become PAC Chairman not only because he was a State Exco who is trying to justify the failures of his own Government, but because he has no conception of what should be the proper role of PAC and its Chairman
I rise to second the motion by the DAP Assemblyman for Pengkalan Kota, Sdr.Chow Kon Yeow, for the nomination of the DAP Assemblyman for Paya Terubong, Sdr.Teoh Teik Huat as Chairman of the Public Accounts Committee in place of the Assemblyman for Teluk Kumbar, Dato’ Haji Mohd.Zain bin Haji Omar.
Datuk Mohd.Zain bin Haji Omar had been Chairman of the Public Accounts Committee for two years, and DAP reservations about his suitability as PAC Chairman has been more than vindicated.
In the first meeting of the State Assembly after the Pctober 1990 General Elections, the DAP objected to the appointment of Dato’s Haji Mohd. Zain bin Haji Omar as Chairman of the PAC because he was State Executive Councilllor from 1986 to 1990, and to appoint him Chairman of PAC would mean that he would have to go through the accounts of the state government and departments which were under him during this period.
This would make the PAC a laughing-stock, with the Chairman of PAC investigating accounts of departments during period when these department were under his own charge when he was State Executive Councillor. Such a conflict of interest was clearly unhealthy and undersirable.
This was why the DAP Assemblyman for Bukit Tengah, Sdr.Chian Heng Kai on 24th December 1990, moved an amendment to the motion moved by the Deputy Chief Minister, Dr.Ibrahim Saad to appoint the Assemblyman for Bayan Lepas, L Chien Aun as Chairman of PAC instead.
This amendment was defeated by the Barisan Nasional Government.
After two years, it is clear that Datuk Mohd.Zain is not fit to become PAC Chairman not only because of his conflict of interest in investigating into his own departmental and government accounts when he was State Exco, but because he has no conception of what should be his proper role as PAC Chairman and that of the PAC.
Mohd Zain thinks his role as PAC Chairman is a neutral chairman to conduct meetings when he should lead the PAC members to investigate government efficiency and integrity in spending public funds.
Nobody who had read the two reports from the PAC would inescapably reach this conclusion, but I dare say nobody apart from DAP assemblymen had bothered to open the two PAC reports, ket alone read the two reports.
I have read these two PAC reports, I challenge any Barisan Nasional Assemblymen or even State Exco, including the Chief Minister, to stand up and declare that they have read the two PAC reports!
He think his role is like a Speaker of the State Assembly, to play a neutral role to chair a meeting, when his task is to lead the Public Accounts Committee as a watchdog to monitor the efficiency as well as the integrity of government in the management and spending of public money.
This wrong attitude is well-illustrated in the very first meeting of the PAC on 26th September 1991 after he 1990 general elections, where the departmental heads were summoned to appear before it.
Thus, in page 7 of the Verbatim Proceedings of the PAC Report on the Auditor-General’s Report on the 1988 Accounts, on Perenggan 6 on Tunggakan Perumahan, the Chairman made these opening remarks reflecting his role as Chairman and the role of the PAC:
“Tuan-tuan sekalian, kita Cuma hendak satu penjelasan. Nombor dua, adakah tunggakan itu berjalan? Kalau berjalan adakah tunggakan itu masih diteruskan sehinggga kini, masa kini? Kalau ada itu tidak ada apa. Itu sahaja yang kita hendak tahu kerana kita hendak rekod kerana bila ada tunggakan mesti ada perkara-perkara yang diikuti. Kalau ada penjelasan macam iitu sahaja. Kita tdak mahu pergi pasal apa yang ini, pasal apa yang itu. Kita hendak laporan yang lengkap vsupaya soalan-soalan dari Pihak Audit itu akan dapat dijawap dan kitalah yang hendak membuat pertimbangan sama ada jawapan tu tallu atau tidak. Itu sahaja.”
Or as explained by Datuk Mohd.Zain on 3rd October, 1991: “Apa yang kiya hendak buat soalan, tegoran-tegoran ataupun pandangan, Jawatankuasa ini berhak berbuat demikian tetapi apa yang saya minta kepada semua pihak, Cuma ini sentuh perkara-perkara yang dipersoalkan oleh Juru Audit. Kalau Juru Audit tidak soal, kita hendak soal, buat penatlah, buang masa saja kerana uru Audit, ia pergi teliti satu persatu dengan detail. Jadi kita sentuh dalam bidang tersebut dan saya harap pihak jabatan dapat memberi penerangan dengan secara tidak perlu panjang-panjang, Cuma memberi penerangan dengan agak jelas supaya kita dapat menerima dan membuat catitian bahawa Jawatankuasa ini setelah meninjau mendapati bahawa perkara-perkara yang dibangkitkan itu dapat diselesaikan.”
This is very narrow, apologetic and mechanical conception of the role and function of the Public Accounts Committee, supaya PAC “membuat catitan bahawa Jawatankuasa ini setelah meninjau mendapati bahawa perkara-perkara yang dibangkitkan itu dapat diselesaikan”! there is completely no conception that the PAC proceedings is in fact a grand ininquest into government efficiency and integrity in spending public money.
PAC Chairman discouraged an active probe into government inefficiency and integrity in the expenditure of public funds and even seek justifications for them
What is worse, as PAC Chairman, Datuk Mohd.Zain discouraged too active a probe into government inefficiency and integrity in the expenditure of public funds, as evident by the above two quotations.
There is even a reversal of role, where instead of probing, the PAC Chairman seems to be defending and justifying government ineffiency, as shortfall in performance, and integrity in expenditure of government funds.
I’ll give one instance from the PAC report into the 1988 State Government Accounts, when Mohd Zain was a State Exco.
On 27th September 1991, the PAC was examining the Timbalam Pengarah JKR, Ridza Abdoh bin Haji Salleh on the shortfall of the JKR in Penang under the Fifth Malaysia Plan, where in the three years from 1986 to1988, only 10 per cent or RM17.22 million had been spent.
The PAC was getting bogged down with the explanations from the Timbalan Pengarah JKR that the shortfall in the JKR was due to problems of squatters, land acquisition, shortage of skolled workers and contractors and was going no where, when the following statement was made:
“… mengikut rekod JKR, dari segi perbelangjaan tidaklah memberasangkan, dari segi rekodlah. Tetapi saya ingin menarik perhatian disini dalam kontek pembangunan yang dirancangkan oleh Kerajaan Negeri, JKR merupakan satu badan yang sangat penting malh boleh dikatakan sebagai tulang belakang kepada perlaksanaan rancang-rancangan pembangunan yang dirancang oleh Pihak Berkuasa Kerajaan Negeri. Oleh kerana JKR ini penting jadi banyak peruntukan diberikan kepada pihak JKR untuk dibelanjakan.
Kalau kita lihat di bawah Rancangan Malaysia Kelima sahaja peruntulkan sebanyak $171 juta diberikan dengan harapan JKR sebagai satu agensi yang penting dalam konteks pembangunan dapat merancang bagi menggunakan peruntukan tersebut. Tetapi oleh kerana Rancangan Malaysia Kelima itu merupakan rancangan kebanyakannya daripada atas, topdown planning, jadi Kerajaan Negeri melalui Jabatan Kewangan diperlukan oleh pihak JKR dan as a result of that examination, dalam tempoh tiga tahun pertama Racangan malaysia Kelima, Kerjaan memperuntukan sebanyak $36.85 juta sahaja which is very-very far below RML but this cannot be blamed on Jabatan Kewangan Negeri atau UPEN is very strict in giving the allocation oleh kerana apabila diakhir tempoh 3 tahun tersebut hanya $17 juta sahaja dibelanjakan. Up to December 1988, ini rekodlah which cannot be argued dan saya pula melihat kepada tempoh lima tahun seterusnya kerana rekod kita ada dan dalam tempoh lima tahun keseluruhan RML, JKR akan mengalami shortfalll sebanyak 50 per ratus. I think that this is quite bad news to the State Government kerana harapan begitu tinggi diletakkan kepada JKR untuk melaksanakan projek-projek yang diterima oleh JKR. Otherwise it will not be in the budget altogether.
“Jadi di sini yang penting kepada saya munkin Jawanrankuasa ini ingin mengambil perhatian, bagaimana JKR boleh mengatasi masalah ini? Oleh kerana kalau dengar penjelasan daripada Timbalan Pengarah JKR, Encik Ridza tadi, saya rasa tidak ada jawapan yang konkrit dikemukakan, munkin kerana Pengarah tidak ada disini kerana melawat keluar negeri. Tetapi saya ingin bertanyalah dari segi analisis, kalau ada dibuat, boleh tidak diberikan pecahan-pecahan mengikut komponen utama fungsi JKR dimana shortfall ini yang very apparent samada dalam projek perlaksanaan jalan, perlaksanaan bangunan, perumahan ataupun projek-projek yang lain, projek-projek kecil, daerah man-mana, di Pulau atau di Seberang Perai supaya satu analisis yang jelas dapat dilihat dan boleh kita cadangkan di mana masalah ini sebenarnya wujud. Kalau misalnya the tender producedure is a problem then we can review the tender procedure. Kalau kontraktor yang lebih reliable.”
This is the type of a statement that should be made by the PAC Chairman, but it is not made by the PAC Chairman as the PAC was examining accounts not only of the Government of which he was a member, but of the department of which he was in charge in 1988 as State Exco Member.
This comment was in fact made by a non-member of the PAC-the State Financial Offier, Dr.Haji Mohd.Shabar bin Sidek.
This is where we see the reversal of role, the PAC Chairman in the dock of the accused instead of heading the PAC panel sitting in judgement over the government departments! In fact, Datuk Mohd Zain was defending and justifying government shortfalls and inefficiencies.
Why are good contractors “allergic” to JKR projects?
Thus, Dr.Haji Mohd Shahar bin Sidek continued:
“Mengikut pengalaman saya selama 3 bulan di Pulau Pinang, PDC tidak menghadapi masalah dengan kontraktor, tetapi JKR menghadapi masalah, jadi ini sayay tidak tahu bagaimana hendak menganalisa masalah JKR dan Encik Ridza pun tahu, saya pun tahu ada berbincang, ada kontractor PDC yang kita minta JKR approach to participate in JKR projects. They refused to participate. Seems they are allergic to JKR projects, I don’t know, but not to PDC projects. What is wrong here? Is it that JKR is the problem, which I hope it is not. I know they are very hardworking people.”
Instead of the JKR Timbalan Pengarah, Radzi replying, the PAC Chairman replied as the State Exco member in charge of JKR at the relevant time, i.e. 1988, with the explanation:”Tidak cukup pegawai”.
This explanation was brushed aside by Dr.Haji Mohd.Sahhar, and rightly so:
“Tidak cukup pegawai telah pun kita bincang, dan masalah itu sedang diatasi. Tapi masalah kecukupan pegawai ini is very subjective. Any where semua ada ketidakcukupan pegawai. We have to stop somewhere. So the argument has to stop somewhere kalau itu yang dijadikan alasan. Tapi saya hendak mencadangkan supaya JKR kalau ada buat analysis, kemukakan kepada kita apakah sebenarnya masalah yang sebenarnya boleh diatasi oleh JKR sendiri. It is no point to talk about other people’s problem we ask them to change but it is beyond us to make them change. But if it is our problem, within JKR, it is within us that we can take steps to change. So I think we are more interested to know what JKR has been doing for the last two or three years since the 1988 account has been closed in order to rectify this, what is future we are more confident kepada Kerajaan Negeri untuk memberi keyakinan kepada JKR untuk melaksanakan projek pembangunan bagi kepentingan rakyat jelata.”
Probably, as a result of this episode, the State Finance Officer, Dr.Mohd.Shahar B.Sidek was told to stay away from the next PAC meeting on 3rd October 1991, where Datuk Mohd.Zain made the shocking policy statement that the PAC’s objective was just to “membuat catitan bahawa Jawatankuasa ini setelah meninjau mendapati bahawa perkara-perkara yang dibangkitkan itu dapat diselesaikan.”
This is a most shocking attitude for a PAC Chairman as it makes the PAC no better than a minutes secretary or minutes committee!
It is clear that the PAC Chairman is not aware of the different objectives of auditing which should come under the purview of the Public Accounts Committee.
Had Mohd.Zain as PAC Chairman ever tried to evaluate government financial performance from the ‘Value-for-Money Audit’ or ‘Effectiveness Audit’ approach?
Apart from the conventional and traditional ‘financial and regularity audit’ to ensure that public funds are spent for the purpose for which they had been approved by the State Assembly, there is also the Value-For-Money Audit and Effectiveness Audit.
I would define ‘Value-For-Money’ as “an examination of economy and efficiency, to bring to light examples of wasteful, extravagant or unrewarding expenditure, failure to maximise receipts or financial arrangements detrimental to the State Treasury and weaknesses leading to them”.
‘Effectiveness Audit’ can be defined as “an examination to assess whether programmes or projects udnertaken to meet established policy goals or objectives have met those aims.”
The Chief Minister, Dr.Koh Tsu Koon, should be familiar with these different objectives of audit which should come under the purview of the PAC, for in March 1983, when he carried his mission as ‘ninja assassin’ of Barisan Nasional to kill the DAP private member’s bill to repeal Section 32(2) of the 1961 Education Act, he did some homework so that he would speak at great length on the Audit Amendment Bill.
This is what Dr.Koh said in the Dewan Rakyat on 14th March 1983:
“Dari satu sudut yang lain, ketanggungan awam ataupun public accountability boleh juga dikaji dari tiga segi iaitu:
(i) ialah ketanggungan kewangan (financial accountability)
(ii) ialah ketanggungan- ketanggungan pengurusan (managerial accountability); dan
(iii) ialah ketanggungan progam (programme accountability)
I want to ask Datuk Mohd.Zain as PAC Chairman for two years whether he is aware of these concepts of audit and whether he had ever tried to evaluate government financial performance from the ‘Value-For-Money Audit’ or ‘Effectiveness Audit’ approach?
No, all he was interested in ensuring as PAC Chairman was that there was not too detailed a probe into the State Government of which he was a State Exco and departments like the JKR which he was in charge.
This must be the reason why as PAC Chairman, Datuk Mohd.Zain refused to postpone the PAC meeting on Sept.26 and 27, 1991 to examine the various departments, including the JKR, although the two DAP members on the PAC Committee, Sdr.Teoh Teik Huat and Sdr.Chow Kon Yeow, had informed him that they would not be able to attend as they would be in Sarawak in connection with the Sarawak state general elections.
Mohd.Zain chaired the PAC with the mentality of an ex-Exco
According to the PAC Report into the Auditor-General’s Report into the 1989 Penang State Accounts which was tabled in this Assembly, the PAC at its meeting of 27th April 1993 decided on the following:
“4.Pembentangan Laporan Jawatankuasa
Jawatankuasa bersetuju supaya laporan Jawatankusa dikemukakan kepada Dewan Undangan Negeri melalui satu usel kepada Dewan Undangan Negeri iaitu berbeza daripada amalan yang lepas dimana laporan hanya dibentang di atas meja Dewan. Perkara ini adalah tertakluk kepada kelulusan oleh Majlis Mesyuarat Negeri.”
The latest PAC report was not tabled in the Assembly by way of a motion, but just as an Assembly document-which in the normal course of event, is not read by any Assemblyman and would have escaped Assembly and public notice if not for the hardworking DAP Assemblymen.
Why was the decision of the PAC to present its report by way of a motion disregarded by the PAC Chairman? Furthermore, why must the PAC seek the approval of the State Exco to implement its own decision to present a motion to table the PAC report?
The PAC is answerable to the State Assembly and not to the State EXCG, which is another proof that. Datuk Mohd. Zain is chairing the PAC with the mentality of an Exco, or what is worse, an ex-Exec, when he should be having the mentality of a PAC Chairman!
The proof is incontrovertible that as PAC Chairman for the last, two years, Datuk Mohd. Zain had failed the the State Assembly and the people of Penang.
This is the reason why he was appointed PAC Chairman by the Chief Minister and why we are seeking his removal. In fact, Sdr. Chow Kon Yeow had become so disappointed and frustrated by the performance of Datuk Mohd. Zain that he had refused to serve on the PAC again.
Sdr. Teoh Teik Huat also wanted to relinquish his position in the PAC but he had been prevailed upon by his sense of duty to agree to be nominated again for the PAC.
We are moving this amendment for we believe that if PAC is to be effective, it must be headed by an Opposition member and not by one who is more interested in defending the financial management of the State Government of which he had been an Exco.
There are recommendations from the PAC Reports going back to 1984 which had not been acted upon by the Government
When opposing the amendment moved by the Assemblyman for Bukit Tengah on 24th December 1990 that, another Assemblyman and not Datuk Mohd. Zain should be PAC Chairman, the Deputy Chief Minister, Dr. Ibrahim Saad said that the Standing Order- 109A(3) prohibits an Exco from being a member of the PAC but not a former Exco.
This is common sense which clearly Dr. Ibrahim Saad does not possess. The whole purpose of the prohibition is to prevent a State Exco from sitting in the PAC to examine his own accounts, whether in the current term or during the term when he was Exco, The PAC has still to examine the Auditor-General’s Report, on the 1990 Penang State Accounts, of which Datuk Mohd. Zain was still Exco member.
Even in the examination of 1991 and subsequent accounts, there would still be conflict of interest because there are still many outstanding matters in the accounts of the previous years which had 10r been resolved.
Thus from the PAC’s latest report into the Auditor-General’s Report into the 1989 Penang State Accounts,, there are recommendations of the PAC going back to 1984 which had not been acted upon by the Government – two from the PAC Report into the 1.984 Accounts, vive from the PAC Report into the 1985 Accounts, one from the PAC Report into the 1986 Accounts and five from the PAC Report into 1987 Accounts.
Time to make the PAC an effective watchdog to check on government financial efficiency and integrity
In his speech in the Dewan Rakyat on 14th March 1983, Dr. Koh Tsu Koon described the PAC in Dewan Rakyat as “tidak bergigi rnaka tidaklah berkesan”.
Now he seems happy to have the PAC in Penang even more “tidak bergigi dan tidak berkesan”.
The time has come to make the PAC an effective watchdog to check on government financial efficiency and integrity, where the PAC can strike respect and fear into all government departments.
At present, the government departments are only worried about audit, examinations by the Auditor-General’s Office and the publication of the Report of the Auditor-General. If PAC is to contribute significantly to the maintenance of high standards in the handling of public money by the civil service, then the government departments must be made to respect and fear the following three events:
1. audit examination and Report by the Auditor General;
2. Examination by the Public Accounts Committee;
3. Report by Public Accounts Committee,
At present, no one is bothered about the PAC, its existence, examinations and reports.
An effective PAC would not just confine itself to the Report of the Auditor-General into the Penang State Accounts, but actively examine into the accounts of all bodies handling public funds, like the MPPP and the MPSP, as well as embarking on value-for-money and effectiveness examination of public expenditures.
Unfortunately, instead of enhancing the role of PAC to raise the standard of handling of public funds, the Chief Minister is using the PAC in order to evade accountability.
Koh Tsu Koon is using the Auditor-General’s Report and the PAC to avoid public accountability
During the winding up of the debate on the Supplementary Supply Estimates on Tuesday, Dr. Koh Tsu Koon refused to reply to speeches by DAP Assemblymen who had demanded for explanations for the various irregularities and improprieties as contained in the Auditor-General’s Report in the 1991 Penang Accounts – as it was the first full year of his administration as Chief Minister.
The reason he gave was that the PAC would be going through the Auditor-General’s Report, and that the Government, would be giving its responses to the PAC.
This is not only a weak argument, it is completely unacceptable as going against all Parliamentary conventions as well as Barisan Nasional government practice.
Dr. Koh Tsu Koon cannot claim to be unaware that during the period he was MP for Tanjong from 1982 to 1986, the Auditor-General’s Reports into the Federal Government Accounts was extensively debated inside and outside Parliament with the Federal Ministers giving their explanations – long before the Reports went to the PAC.
Surely, I need not remind Dr. Koh Tsu Koon that the then 2-M Administration of Datuk Seri Dr. Mahathir Mohamed and Datuk Musa Hitam encouraged wide publicity and debate to the Auditor-General’s Reports inside and outside the Devan Rakyat in order to project, the 2M Government’s slogan of a ‘Clean, Trustworthy and Efficient’ Administration.
Dr. Koh Tsu Koon is now doing the opposite – using the Auditor-General’s Report and the PAC to evade accountability and responsibility for the irregularitj.es and improprieties in government during his first year in office.
Dr. Koh Tsu Koon has turned full circle. When he was MP for Tanjong ten years ago, he jumped on the bandwagon of a ‘Clean, Trustworthy and Efficient1 slogan, but today, when he has become Chief Minister, he has repudiated his commitment to government accountability and transparency.
Why private auditors are not issuing the audit certificates for MPPP, MPSP, PDC, PPG and PLB although audit has been privatised?
Finally, on the question, of auditing, I want to know why the auditing of various government bodies, like the MPPP, MPSP, Penang Development Corporation, the Penang Port, Commission and the Penang Labour Board had been privatised. However, although the auditing of these bodies have been privatised, the private auditors do not issue the audit certificates, as the certificates are still issued by the government auditors.
Surely, this defeat the whole purpose and concept of privatisation of audit of public authorities. 1 expect the Chief Minister to give the State Assembly a satisfactory explanation.