Weakness of Malaysian public procurement : a review of auditor general's reports

Abstract

Public procurement is an important government’s activity that reflects crucial responsibility of the government in spending public funds to purchase goods and services to increase citizen’s standard of living. However, from time to time there are reported issues on the weaknesses and limitations in the Malaysian public procurement. The aim of this study is to systematically analyze the weaknesses of public procurement in Malaysia reported in the Auditor General’s Reports from 2011 until 2018. To achieve this objective, the researcher has looked into several specific matters which are 1) the issues reported in the Auditor General’s reports regarding public procurement, 2) the modes of public procurement involved with the weaknesses of public procurement, 3) the procurement categories involved with the weaknesses of public procurement, 4) the federal ministries that have been significantly involved with the weaknesses of public procurement, 5) the level of satisfaction of the Auditor General towards public procurement and 6) the recommendations given by the Auditor General to improve public procurement activities. A quantitative research method was adopted to carry out the study, specifically with document analysis. The researcher used public records which are the Auditor General’s reports; reports of activities of federal ministries/ departments published by the National Audit Department, Malaysia. The data gathered from the Auditor General’s content analysis were analyzed using frequency distribution and displayed with descriptive statistics. The findings of the study revealed that the top 5 issues reported are 1) non- compliance to scope, specifications & terms of contracts, 2) delayed completion/ non-completion of project, 3) poor documentation, 4) low quality of products, service and work, and 5) little or no prior planning. It is also found that direct negotiation mode was reported with the highest issues of public procurement, while the procurement mode with the least public procurement weaknesses is direct purchase. Moreover, it was found that work category is the highest with public procurement issues reported compared to supplies and services. The current study also found that the top recommendations given by the Auditor General were 1) to improve internal control, 2) to enhance monitoring, 3) to establish planning in details, 4) to improve assets management and 5) to take appropriate actions towards contractors and procurement officers when needed. To assure more improvements in the public procurement activities to be made in the future, the government might come together with academicians in conducting comparative studies to address the weaknesses of public procurement activities in Malaysia. In conclusion, the current study contributes to the body of knowledge by examining the weaknesses of public procurement in Malaysia based on the Auditor General’s reports. The empirical findings provided in this study can be used as a basis to further analyse possible improvements that can be made in the future.