RM37 million in social obligation funds not received by MAFI - Audit

According to the report, this happened as a result of the weaknesses of MAFI's monitoring of the concession agreement's terms and the absence of clear work procedures related to the implementation of social obligations that had been agreed upon.

The concession agreement stipulates that the Monitoring Committee is responsible for evaluating the concession company's compliance with the terms of the agreement, including 10 social obligations that need to be implemented, including managing the payment of padi price subsidies.

"Overall, there are weaknesses in the receipt of funds in the form of finance and assets as well as the payment of the Padi Price Subsidy Scheme (SSHP) under the national rice and rice industry management concession agreement.

"Additionally, the supply of machinery worth RM3.12 million did not comply with the concession agreement while RM0.87 million worth of machinery had not been used and was broken," the report said.

Apart from that, the report also revealed that irregular SSHP payments of RM0.73 were made to dead padi farmers.

To overcome the weaknesses highlighted, the Auditor-General has recommended MAFI immediately establish a trust account and obtain social obligation funds in accordance with the concession agreement to benefit the target group.

"The ministry also needs to ensure that improvements are made to the standard operating procedures of SSHP payments and to establish a more effective monitoring mechanism so that payments are made in an orderly manner," said the report.

It was also suggested that MAFI ensure that a study of machinery needs is conducted and a maintenance programme is established so that padi machinery and mechanisation are always available for farmers.