With the Audit (Amendment) Bill 2024 passed by both Houses, the Bill will now be sent for royal assent by the King, before being gazetted as a new Act. (Photo by Zahid Izzani/The Edge)

KUALA LUMPUR (July 25): The National Audit Department (NAD) will now be able to audit the accounts of any companies that receive financial guarantees from the federation or a state.

The Audit (Amendment) Bill 2024, which amends the Audit Act 1957 (Act 62), was approved by the Dewan Negara on Wednesday after being debated by 21 senators. The Bill had previously been passed by the Dewan Rakyat on July 3.

The amendment will improve the scope of auditing of the management of public money, while ensuring that audit recommendations receive serious attention and appropriate action from all parties, including ministries, departments, government agencies, and any entity receiving public funds, the NAD said in a statement.

“The Act 62 has not been amended since 1991, 33 years ago, and needs to be strengthened in line with the latest developments in governance and public money management,” the agency noted.

Earlier, the Ministry of Finance (MOF) noted that Malaysia’s total debt and liability exposure stood at RM1.58 trillion as of the first quarter of 2024. This includes RM1.21 trillion in debt, RM225.9 billion in guarantee commitments, and RM140.8 billion in other liabilities.

However, the ministry pointed out that the annual increase in debt has been declining, with the debt increase rate for 2023 decreasing to 8.6% compared to 10.2% in 2022. It anticipates this rate to further decrease to around 7% in 2024.

Committed guarantees are defined as financial assistance provided by the government to government guarantee recipient entities for various purposes, including temporary cash flow injection, working capital assistance, interest repayment and other operational aids to sustain ongoing projects.

Under the amendment Bill, Clause 2 seeks to amend Section 5 of the Act to expand the auditor general’s (AG) power to audit the accounts of any body, including companies registered under the Companies Act 2016, that receive financial guarantees from the federation or a state.

Additionally, the clause empowers the AG to audit the accounts of any entity, including companies registered under the Companies Act 2016 that receive public funds, if the minister of finance deems it urgently necessary, following the “follow the public money audit” approach.

Other amendments to the Bill introduce new provisions granting the AG the authority to issue guidelines for implementing Act 62, make recommendations to address serious irregularities in the handling of public funds, and conduct follow-up audits of actions taken in response to the recommendations and comments in the AG’s Report.

The amendment aims to enhance the role of the AG in ensuring checks and balances through three main types of audits — financial statements; performance of programmes or activities of ministries, departments, and government agencies; and management of government companies.

With the Audit (Amendment) Bill 2024 passed by both Houses, the Bill will now be sent for royal assent by the King, before being gazetted as a new Act.