Audit delays hinder penalty claims for late government vehicle deliveries in Malaysia

Malaysia's National Audit Committee (PAC) has highlighted significant delays in the auditing and verification process for government vehicle supply, leading to a backlog in issuing penalty claims against concession companies. The committee's findings, based on an examination of government vehicle management under concession agreements, point to inefficiencies that impact the timely delivery of vehicles to ministries and agencies.

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There are delays in auditing and verifying data on the number of days vehicles are overdue for supply to all ministries and agencies. This causes official penalty claims to be unable to be submitted to the concession company immediately.

The core issue identified is the delay in auditing and confirming data on overdue vehicle supplies. This administrative bottleneck prevents the immediate submission of official claims for penalties against companies responsible for late deliveries. The PAC report emphasizes that these delays can result in the government continuing to pay monthly lease rates for vehicles that have passed their lease expiry but remain in use due to the unavailability of replacements.

To address these shortcomings, the PAC has put forth several recommendations for the Ministry of Finance (MoF). These include incorporating identified improvements into supplementary agreements with SPANCO Sdn. Bhd., the primary concessionaire. Furthermore, the MoF is urged to revise the existing contract stipulation of a 60-working-day period for vehicle replacement. This timeframe needs to be adjusted to align with the current realities and capabilities of the automotive manufacturing industry, taking into account factors such as vehicle variant changes, customs processing, registration procedures, and the logistical challenges of delivery to remote areas like Sabah and Sarawak.

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The MoF needs to amend the stipulation of a 60-working-day period for vehicle replacement in the existing contract and current circulars to be aligned with the norms and capabilities of the current automotive manufacturing industry.

Additionally, the PAC suggests that the MoF and the Public-Private Partnership Unit (UKAS) conduct a comprehensive study on alternative fleet management models, such as multi-supplier systems. This evaluation should assess the potential for cost savings and service delivery efficiency compared to the current single-concession model, which binds the government until 2037. The committee also stresses the importance of fully utilizing a digital fleet monitoring system across all government ministries and agencies to provide early warnings for lease expiries and ensure timely vehicle order processing.

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The MoF and UKAS need to conduct a comprehensive study to explore the effectiveness of alternative management models, such as a multi-fleet supplier system.