KUALA LUMPUR: The government’s over dependence on taking new loans to finance the repayment of loan principals which have matured, has been described as worrying, says Auditor-General Datuk Nik Azman Nik Abdul Majid.

       This is because the loans should be paid using existing proceeds or any surplus of the government proceeds, he added.

       “However, in 2020, the country was facing the Covid-19 pandemic and the government was forced to take measures to improve the health system for the people to combat Covid-19,” he told reporters at Parliament House yesterday.

       The press conference was held following the tabling of the Auditor-General’s report on the Federal Government’s financial statements and the 2020 Federal Ministries and Departments Compliance Audit.

       In the report, the Federal Government’s debt in 2020 amounted to RM879.56bil or 62.1% of the GDP.

       The federal debt increased by RM86.562bil or 10.9%, compared to RM792.998bil or 52.4% in 2019.

       A total of 50.4% or RM98.058bil of the RM194.555bil of new loans in 2020 was used to finance the principal repayment of matured loans.

       Therefore, Nik Azman said, the department proposed prudent spending that ensured all development expenditures were financed with loans that should be serviced according to schedule within reasonable costs without leakages or wastage.

       The audit report also found that not all the funds under the Development Fund were used for the purpose of development, said Nik Azman.

       “We found RM2.6bil used to fund maintenance expenditure.

       “This is usually funded by operating expenditure.

       “The funds for development are mostly from borrowings which should be used to generate revenue in future even though it is allowed under the act in Development Fund.

       “But from the economic aspect, we feel it is not so appropriate.

       “We hope the government will look into the matter,” he added.

       He said that the Audit Department had made 25 recommendations in the form of punitive and corrective measures.

       “Punitive action will be taken if there are (cases of) negligence, misconduct and malpractice, including investigations by the Malaysian Anti-Corruption Commission (MACC),” he added.

       Meanwhile, Public Accounts Committee (PAC) chairman Wong Kah Woh, who was present at the press conference, expressed worry over the Auditor-General’s statement on the government’s growing debt.

       He added that the PAC had found that close to a fourth of 2020 gross borrowings meant for the Development Fund was used to pay liabilities, operating expenditures and other guarantees.

       The PAC is expected to hold proceedings to scrutinise issues raised in the report.