Rural Development Ministry denies overspending its approved allocation

Malaysia’s Rural and Regional Development Ministry has rejected the description that it “spent beyond its allocation,” arguing that the phrase gives a misleading picture of how project commitments and payments were handled.

Fadzmel Fadzil, the minister’s press secretary, said every funding request goes before the Finance Ministry and every government payment is processed through established financial procedures, including the Integrated Government Financial Management Accounting System, or iGFMAS. Development projects and programmes must also receive approval from the Economy Ministry.

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Every funding request is presented to the Finance Ministry, and every expenditure is subject to the government’s financial system, which uses the Integrated Government Financial Management Accounting System, or iGFMAS.

He said information previously issued by the Finance Ministry did not include data from 2019 to 2021, which the ministry considers necessary to assess project commitments, allocations and payments in full. Some projects were disrupted by the Covid-19 pandemic, but acceptance letters had already been issued for certain contracts. Contractors then carried their payment claims into subsequent years.

Once contractors have completed work, the government remains responsible for paying according to progress and contractual obligations, Fadzmel said. Projects already under way cannot simply be stopped because an annual allocation is nearly exhausted.

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Projects that have already begun cannot simply be stopped just because the annual allocation has almost been fully used.

The ministry said it responded by reorganising internal allocations, limiting new commitments, cancelling some tenders and restricting projects still at the pre-implementation stage. It also formally asked the Finance Ministry in the second quarter of this year to cover deferred payments for ongoing projects.

Fadzmel said the RM300 million issued through an expenditure authority on September 1, 2026, was not an additional allocation. He described it as funding that should have been channelled to the ministry to meet commitments and payment arrears carried over from earlier years. The ministry welcomed the approval, he said, but warned that it still falls short of the total amount required.

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The RM300 million is not an additional allocation, but funding that should have been channelled and was provided through the expenditure authority issued on the afternoon of September 1, 2026.