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Saturday, February 6, 2016

The coffers are dry, but money is everywhere – T.K. Chua

Image result for PM Najib, MB Bahshah and RM15 Million to Kedah

The headline "Najib approves RM15 million for Kedah business complex" caught my attention.  
A day after the new menteri besar was sworn in, Kedah is "worth" RM15 million more. I wonder how much more the state would be worth after one week, one month or one year.
RM15 million is a small number nowadays. But the concern here is the principle involved, not just the money. There is a saying, if we can’t handle small money, we can’t do likewise for big money.
The last time I checked, money from the consolidated fund can only be taken out with an expressed permission of the Dewan Rakyat through appropriate money bill. This is the essence of oversights and fiduciary duty of our system of government.
To me, it is losing sight of all these "basics" that is causing so much malfeasance today.
Sometimes, the government may spend first and seek approval later in the form of a supplementary budget. But this is usually confined to an emergency or critical situation when money is needed urgently to rectify an unforeseen problem. But was building a business complex in Kedah an emergency?
So why are we doing projects and dispensing money in such a haphazard manner? Some newly minted big shot whispered something into the ears of a bigger shot and voila, the project and the money are approved on the spot. It is akin to an addicted shopper deciding to buy something on the spur as she/he walks along the aisle of a departmental store.
The new MB said he had seen the need for the business complex when he was the deputy minister for Domestic Trade, Cooperatives and Consumerism. Well, was research done, need assessment carried out, and cost benefit appraised? If so, why didn’t the deputy minister incorporate this project into the annual budget of the ministry?
I sincerely hope we are not considering projects and spending government money based on cursory observations, personal feeling or one-upmanship. We shouldn’t be doing this even in time of plenty, not to mention that we are now faced with revenue shortfalls and economic difficulties.  
RM15 million is not a big sum from the government's point of view.  But it is the manner in which we do. It does not matter the person announcing it is the finance minister. We can’t announce projects and spend money as if there are no fiduciary rules and regulations governing our country. Where would all these lead us to if we have RM15 million here, RM100 there and RM200 everywhere without proper evaluation and assessment?
Companies have financial controllers, nations must have treasurers and finance ministers. I can only emphasise on the basics because most problems have originated from the lack of adherence to the basics.
The financial implication of a poorly conceived project is not just confined to the cost of project alone. It also involves its subsequent maintenance and opportunity cost.
With proper evaluation, the money could be more productively spent elsewhere to generate greater benefits for the people. Otherwise, it is a white elephant that needs expensive maintenance.
* T.K. Chua reads The Malaysian Insider.

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