Issues government manages the financial management of Malaysia.

Issues
on Accountability in Public Financial Management in Malaysia

   Accountability in public financial
management is very crucial to a country’s economic development as this will
guarantee that public funds are managed in the most efficient, effective and
economical manner. As a taxpayer, who provides funds they expect their
government to provide value of money services to them. Due to that, a
government must resolve the issues that affect the accountability in public
financial management in order for effective and efficient management of fund
also to gain more public trust.

 

   The first issue is lack of transparency which
is the component of the accountability. Transparency involves in collecting
information and makes it available for the public to access. It provides a
clear explanations and reasoning for every actions and decisions taken by the
government for the development and enhancement of country and benefits for the
citizens. However,it was disheartening to found that several worldwide studies
has conclude that states of affairs of Malaysian government need to thoroughly
and be detailed in improving its accountability and transparency (Abu Bakar and
Ismail 2011). The citizens only be informed about the availability of fund of
Malaysia and benefits they get from the tax they pay and so on through Budget
every year. Due to that, government need to be more transparent by providing
the flow and allocation of money and fund statement going in and out in a
portal for the public to access and updating the progress of certain project
promised by the government so that the public knows that the allocation given
is well handled. From there, the public can know how well or bad our government
manages the financial management of Malaysia.

 

   Next, lack of integrity among the management
contributes one of the issues on accountability in public financial management.
According to the former Prime Minister of Malaysia, Tun Dr. Mahathir Mohamad, lack
of integrity among the management and the members of the organizations are the
main reason for the fail of ensuring a better in managing the financial of
public management in Malaysia and cause many malpractices and frauds within the
organization. In organizational view point, integrity or ethical behavior
refers to not only being corrupted or fraudulent but it lies on quality or
characteristic of individual that represents the quality of conduct in
accordance to the moral values and rules accepted by the organization’s members
and

society
(Kolthoff et al., 2010); Bauman, 2013).

   Next, in local government context, the
absence of law regulations and requirements for a authorities to report on
their performance and the attainment in conveyance of the programs or
activities plus with the lack of financial and physical capacity(Abdul
Khalid,2008) has been identified as one of the contributing factors on
accountability issues (Rauf et al., 2004; Basnan et al., 2007). Issue of lack
in recruiting qualified accounting staff causes the inadequacy and
inappropriate in the financial management reporting system at the central level
which led to inconsistent decision making, ineffective monitoring of fiscal
developments and resulting to imbalances in public finance (Blondal, 1988).

 

   As one of the developing countries, Malaysia
are not excepted from a weak financial management and internal control system
in various public institutions including statutory bodies, local authorities, state
religious councils as well as the Federal Government level. (Basnan et al.,
2007) (Siddiquee,2005,2006). A study conducted by Md Zain(2005,2008) has found
that high percentage of State Religious Councils (SRCs) have not complied with
the respective rules and standards pertaining to the preparation and submission
of  financial statements. Abdul Hamid
(2007) also found that there was a huge delay in the submission of accounts
among the Federal statutory bodies. Weaknesses in revenue and government asset
management were also highlighted (National Audit Department,2013).The report
has further discussed that these weaknesses were caused by the negligence of
officers, lack of monitoring, lack of project management skills and failure to
give attention to the outcomes of the programs which lead to huge significant
amount of money  wasted.

 

   Resistance to changes such as adoption of
new system or practices to a certain, creates uneasiness amongst the existing
public sector personnel. They usually refuse to adapt any new changes and new
working responsibilities because they afraid of the workloads and time
consuming to learn the new system. Current imminent changes involved in the
Malaysian public financial management are the introduction of the OBB system
and the implementation of accrual accounting. If the attitudes of ‘resistance
to change’ is not carefully tackled by public sector organizations, it may
cause further problems including of lack of understanding, high job errors and
low quality and productivity. These problems are detrimental to the
organizations and also the country as a whole. (Public Sector Accounting 4th
edition).

Author: