AG’s Report: Unutilised govt allocations must be declared

AG’s Report: Unutilised govt allocations must be declared

KUALA LUMPUR: Any unutilised government allocations must be declared and reported to the Finance Ministry or the Economy Ministry for further action, Deputy Finance Minister Liew Chin Tong said.

Speaking in the Dewan Rakyat, he said allocations must not be spent outside their original scope.

“Decisions regarding such allocations fall under the authority of the Finance Ministry, whether to return them as government revenue, repurpose them, or take other appropriate action,” he said during his ministry’s winding-up session on the Auditor-General’s Report.

He was responding to audit findings on the management of the Research, Development, Commercialisation and Innovation (R&D&C&I) Programme.

The Auditor-General’s Report 1/2026, released yesterday, revealed that weaknesses in governance and monitoring have undermined the effectiveness of Malaysia’s R&D&C&I programmes despite significant government investment.

Project implementation stood at only 34.1 per cent, with a shortfall in Gross Expenditure on Research and Development (GERD) performance. The report stressed that structural reforms are required across financial controls, guideline development and agreement compliance.

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Liew said the ministry is of the view that continuous, focused and outcome-based monitoring must be strengthened to ensure that R&D&C&I projects and programmes achieve their intended targets.

He added that the ministry welcomes the National Audit Department’s recommendations to strengthen monitoring of the Centralised Research Management Unit to streamline and enhance R&D&C&I governance, as well as the preparation of national guidelines on the matter.

“The sharing of facilities, infrastructure and equipment among research institutions, universities and industry for rental, analytical services and technical advisory services should be enhanced to optimise the use of national assets and reduce research implementation costs.

“Focus must also be given to aligning high-impact R&D with sustainable economic growth and national competitiveness,” he said.

It was reported that as of 30 June 2025, unreturned research grants across four ministries totalled RM183.11 million, covering 7,904 projects.

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On another issue raised in the report – the financial performance of companies, particularly dividend payments by subsidiaries that recorded profits – Liew said the decision not to declare dividends by several subsidiaries, including Petronas, was made based on the board of directors’ consideration of cash flow requirements, investment commitments, asset maintenance and capital strengthening.

“Although profits were recorded, priority was given to operational sustainability and reinvestment.

“At the same time, Petronas, through its holding company Petroliam Nasional Bhd, paid RM32 billion in dividends to the government for the financial year 2024, demonstrating that the group’s contribution is assessed comprehensively,” he said.

He added that for Cenviro Sdn Bhd and Cradle Fund Sdn Bhd (CFSB), the decision not to pay dividends was in line with their respective dividend policies and actual cash positions.

“Cenviro utilised its profits and available cash to redeem Redeemable Convertible Preference Shares (RCPS) amounting to RM100 million and retained sufficient cash for operational needs and capital commitments.

“CFSB faced operational cash flow constraints, reliance on grants and partially unrealised profits; therefore, no dividends were declared for 2022 and 2023 with board approval and notification to the ministry,” he said.

For IJN International Sdn Bhd, Liew said profits were not significant compared with the contribution of its main subsidiary, Institut Jantung Negara Sdn Bhd, and funds were required for operational expansion.

However, he said the company acknowledges the need to apply for a dividend exemption and will improve its policy.

He said that dividend payments are a decision of the board of directors based on a comprehensive assessment of cash requirements, investment commitments and market risks.

“Nevertheless, taking into account the issues raised regarding dividend payments, particularly in terms of transparency and consistency in the treatment of government-owned companies, the government is prepared to evaluate improvements to existing guidelines to ensure a balance between fiscal discipline and the financial sustainability of these companies.

“This is to ensure that the commercial autonomy granted to companies is aligned with accountability to shareholders,” he said.