AG Report: Large amount of payment arrears for low-cost public housing in S'gor

The lack of hire purchase documents for low-cost public housing (PAKR) between the Selangor government and buyers led to large amounts of arrears in monthly payments in the state.

According to the Auditor-General's Report 2014 Series 1, loose terms as well as a limited network of payment facilities were also obstacles faced by the state government in collecting payments through the Selangor Housing and Property Board (LPHS).

Audit checks found that in the hire purchase agreement between the Selangor Government and the buyer, there was no charge clause made responsible to the state government, but this was placed under the buyer as they were not bound by any restriction in interests.

In general, the audit analysis showed an unsatisfactory performance in hire purchase payments with RM25.17 million in arrears payments as of October 2014 not collected by the LPHS.

"The LPHS should collect hire purchase payments of RM10.16 million each year to help the Selangor government pay its loan to the Federal Government until 2028 (25 years).

"The drop in payments resulted in the LPHS not being able to fully help the state government, causing a serious arrears in hire purchase payments," the report said.