PUTRAJAYA: The auditing of nearly 2,000 government-owned companies, using the artificial intelligence (AI)-based e-SelfAudit system, aims to address several weaknesses such as continued losses and the failure to manage and supervise the company’s operations.
Prime Minister Datuk Seri Anwar Ibrahim said the National Audit Department (NAD) will carry out the audit starting this year, with the implementation of a pilot auditing method using the e-SelfAudit system based on AI which started in November 2024.
“More importantly, this system was developed internally through the NAD Digitisation Project without additional cost implications for the government,“ he said in his speech during the Government Company Audit Implementation Launch Ceremony here today.
Anwar, who is also the finance minister, said the audit aims to address governance issues identified in government companies, including monitoring weaknesses in the achievement of Key Performance Indicators (KPI) reports and the company’s strategic plan.
Among other issues identified are the failure of the chief executive officer (CEO) to play a role in managing and overseeing the company’s operations, as well as continued losses at the parent company and subsidiary levels.
“The company’s profit that is not redistributed to the government as a return is also a major issue, in addition to the weakness of the investment committee and the audit committee in providing views and advice to the board of directors,“ he added.
Anwar also pointed out that significant decisions of the company, including the payment of salaries and services, are often not brought for the approval of the board of directors, affecting the integrity of management.
To strengthen governance, he said the government issued instructions for the governance of government-interest companies (GICs) and companies limited by guarantee (CLBGs) on May 20, 2024.
“This directive provides guidance in the implementation of the rules and management procedures of government-owned companies established by the federal government. I congratulate the NAD for their efforts in carrying out this large scale audit which will increase the level of transparency and accountability in government companies,“ he added.
At the same event, Auditor General Datuk Seri Wan Suraya Wan Mohd Radzi said the NAD has also issued four new auditing guidelines, namely the Guidelines for Auditing the Management of Government Companies; Audit Follow-up Guidelines; Guidelines on Follow The Public Money Audit (FPMA); and the Auditor General’s Certificate Guidelines on Financial Statements.
“This is a new power provided under Section 7A of the Audit Act where the Auditor General can issue any guidelines, as necessary or expedient, towards cultivating good governance and accountability in the management of public money,“ she added.
She said the e-SelfAudit enables the auditing process to be carried out more efficiently and systematically on 1,856 gazetted government companies, including government-linked companies (GLCs), government-linked investment companies (GLICs) and CLBGs.
