Kuala Lumpur, 4 March 2026: The Institute for Democracy and Economic Affairs (IDEAS) notes the recent Auditor General’s Report (LKAN 1/2026), which highlights continuing governance and financial management concerns across public institutions, government-linked entities and major national projects.
Taken together, the findings point to recurring weaknesses across successive audit cycles. These include gaps in project oversight, delays in financial reporting by public agencies, governance risks within subsidiaries and shortcomings in accountability arrangements governing publicly funded initiatives.
One prominent example concerns the MyDigital ID project under MIMOS Berhad, where the audit found that approximately RM28.13 million had been spent without prior verification by the designated project oversight committees, covering expenditures incurred between December 2023 and March 2025 with approvals granted retrospectively outside the prescribed governance structure.
The audit recorded spending beyond authorised allocations and the use of development for operational expenses, contrary to RMK-12 guidelines and the intended purpose of allocation. These findings suggest weaknesses in internal controls and financial management requirements. Governance arrangements during the early phase of the project did not function as intended, with formal reporting and approval processes bypassed.
The report also states that 80 out of 128 audited financial statements required attention due to governance and oversight concerns. Furthermore, 24 of 42 subsidiary companies under five Federal agencies recorded losses for three consecutive years between 2022 and 2024 with combined losses of RM466.57 million in 2024 alone. Although some losses reflect accounting adjustments, their persistence points to deeper structural and commercial challenges within publicly linked entities.
IDEAS welcomes the Government’s follow up efforts. As of 31 December 2025, 94.4 percent of audit issues had been resolved, with RM316.68 million recovered and collected. This demonstrates that enforcement works when pursued consistently.
Repeated findings show reform must go beyond post-audit corrections. Preventive governance is essential. Entities managing significant public funds, including subsidiaries and special purpose vehicles, should meet the same transparency and reporting standards as core government agencies, with clear timelines, measurable progress updates and stronger parliamentary oversight.
“Financial recovery after losses occur is important, but the real test of reform is whether governance failures are prevented in the first place. “The Auditor General’s Report should function as an early warning system. Without stronger preventive controls, clearer accountability and performance-based oversight, the same weaknesses will continue to recur,” said Aira Azhari, IDEAS CEO.
— ENDS —
Download the Media Statement PDF File Here
For enquiries, please contact:
Ryan Panicker
Assistant Manager, Advocacy and Events
T: 03 – 2070 8881/8882 | E: ryannesh@ideas.org.my
