KUALA LUMPUR: The Auditor-General’s Report (LKAN) has raised serious concerns over the financial sustainability of the Solid Waste Management and Public Cleaning Corporation (SWCorp) and its ability to sustain operations.
The report, presented in the Dewan Rakyat today, covers the 2023 Federal Agency Financial Statements and reveals that as of Dec 31, 2023, SWCorp’s cash reserves were insufficient to meet payments to creditors including its concessionaire company.
Despite receiving annual grants from the federal government, SWCorp’s revenue generation remains inadequate to cover operational costs, forcing the agency to rely heavily on government financial injections, the report said.
“SWCorp’s ability to cover operating costs and financial commitments in the future is dependent on additional financial support from the federal government,“ the report stated.
The agency also saw a decline in its assets, which fell to RM691.79 million in 2023 from RM759.86 million the previous year. However, its liabilities also decreased, dropping to RM831.94 million from RM854.47 million during the same period.
Despite this, net liabilities have been steadily increasing to RM140.15 million in 2023, up from RM94.61 million in 2022 and RM7.42 million in 2021.
“The agency’s assets are insufficient to cover its long-term liabilities,” the report noted.
In 2023, SWCorp received a government grant of RM2.24 billion, which included operational grants and payment of RM1.545 billion, accounting for 69 per cent of the agency’s total revenue.
“From 2021 to 2023, over 65 per cent of SWCorp’s revenue came from federal government grants,” the report added.
Additionally, the report showed that SWCorp’s expenditure for 2023 amounted to RM2.294 billion, exceeding its revenue of RM2.24 billion and resulting in a deficit of RM53.9 million.
Its operational spending increased to RM2.014 billion in 2023, up from RM1.969 billion in 2022, with a significant portion allocated to solid waste collection and public cleaning services, contributing to the deficit, the report said.
After three consecutive years of losses, the Auditor-General has recommended that SWCorp adopt a clearer strategic direction and implement effective revenue-generating mechanisms to reduce its reliance on government support.
“SWCorp needs to address the discrepancy in accounts receivable with local authorities to ensure proper collection of solid waste management and public cleaning fees.
“Additionally, the agency should resolve outstanding differences in accounts payable between SWCorp and its concessionaire companies,” the report advised.
