Liabilities of federal agencies increase but loan ratio still under control - AG Report

Despite this, the ratio of loans was still at a satisfactory level, indicating federal agencies did not rely on maximum loans to manage their operations, according to the Auditor-General's Report (LKAN) 2020 Series 1, released today.

The report stated that loan balances for 21 federal agencies increased 10.5 per cent, or RM10.81 billion, to RM113.6 billion in 2020. Assets registered a 7.2 per cent increase, or RM118.14 billion, to RM1.76 trillion from RM1.64 trillion in 2019.

The loans ratio compared to total assets is to gauge the ability of federal agencies to fulfil their short and long term obligations.

LKAN said the Public Sector Home Financing Board (LPPSA), National Higher Education Fund Corporation (PTPTN), Federal Land Development Authority (Felda), PR1MA Corporation Malaysia, and Port Klang Authority had been given certificates with opinion without rebuke after recording the highest loan balances of RM107.93 billion in 2020 compared to RM97.21 billion in 2019.

In 2020, 53 federal agencies had invested in 189 subsidiary companies amounting to RM41.37 billion compared to 192 subsidiary companies totalling RM37.95 billion in 2019.

A total of 19 subsidiary companies were dormant and another was dissolved.

LKAN said the Employees Provident Fund (EPF), Retirement Fund (Incorporated), Lembaga Tabung Haji (LTH), and Felda had net investments in subsidiary companies of more than RM1 billion in 2020.

It noted that 59 subsidiary companies under 20 federal agencies incurred losses after tax of RM392.67 million in 2020, compared to RM75.99 million in the previous year.

LKAN stated that subsidiary companies that incurred losses need to review their operating model to ensure the group's viability and financial sustainability.

Only 12 out of 53 federal agencies received dividends from subsidiary companies totalling RM1.081 billion for the financial year ended Dec 31, 2020.

The EPF received the biggest dividend of RM926.68 million, followed by LTH (RM119.65 million), Felda (RM24.48 million), Federal Territories Islamic Religious Council (RM3.37 billion), and Universiti Teknologi MARA (RM2.5 billion).