A-G’s report: Millions of ringgit lost in UiTM, UKM through unclaimed compensation

Anis Zalani
·3-min read
Malay Mail
Malay Mail

KUALA LUMPUR, Oct 10 — A 2021 Auditor-General’s report today revealed millions of ringgit potentially lost by two major tertiary education institutions: Universiti Teknologi MARA (UiTM) and Universiti Kebangsaan Malaysia (UKM).

The report on federal government agencies found a total of RM58.57 million may be lost at the Universiti Teknologi Mara (UiTM), including an RM51.08 million potential loss from unclaimed compensation, offsetting against defaulting debtors (RM6.23 million) and unclaimed compensation (RM1.26 million).

Based on the report, the audit review found that a total of 86 out of 381 debtors had breached their contracts, and were written off in 2019 by UiTM’s Financial and Development Committee (JKP).

“Further examination revealed that demand notices were issued to all 86 debtors who breached contracts.

“However, actions for compensation claims, including the initiation of legal proceedings in court and enforcement of judgments as well as salary deductions, were not carried out,” the report said.

It further said the write-off of the RM6.23 million debt owed by contract-breaching debtors was due to the statute of limitations exceeding six years from the date of the contract breach.

This limitation prevented UiTM from initiating legal proceedings in court and enforcing judgments.

“UiTM’s failure to take action and file compensation claims against the 86 contract-breaching debtors within the stipulated period resulted in UiTM incurring losses.

“The inability to collect the total debt of RM6.23 million and its subsequent write-off in 2019 exacerbated the financial impact,” it said.

On the other hand, the audit on Universiti Kebangsaan Malaysia (UKM) focused on claims for collecting compensation related to study leave debtors, totalling RM1.50 million.

“Delay in taking action against study leave debtors resulted in UKM losing revenue amounting to RM0.64 million.

“Reduction in debt repayment and payment of study leave compensation in-kind, totalling RM0.86 million, could not be collected due to the limitation of the Limitation Act 1953 [Act 254] and the non-implementation of in-kind compensation by the debt,” it said.

The audit review found that a total of 178 study leave compensation debtors had their services terminated by UKM for violating study leave agreements, amounting to a contract total of RM17.36 million.

Out of this total, it said 160 study leave compensation debtors whose services were terminated have been making payments.

However, an amount of RM0.87 million in repayment for study leave compensation claims could not be collected from 18 of these debtors due to delays in pursuing the compensation payment.

The audit review also noted that the Study Leave Compensation Claim Process did not establish a specific time frame for issuing warning letters to scholarship recipients and that this process was only updated in 2020, setting the issuance of warning letters to scholarship recipients and guarantors three times (every four months) before legal action is taken.

“Out of the 178 study leave compensation debtors, seven officers did not make repayments for Study Leave Compensation claims, breaching study leave agreements between 2015 and 2018.

“The failure to collect instalment payments for study leave compensation occurred due to delays on the part of UKM in enforcing payments from debtors within the appropriate time frame,” it said.

It further said that the responsible department also did not monitor and pursue repayment of compensation claims from debtors who failed to fulfil these instalment payments.

“This failure in implementing study leave compensation claims resulted in a total of RM486,526 being uncollected,” it said.

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