AG's report: Home Ministry loses over RM6 million from contractor's failure to supply firearms

KUALA LUMPUR - The management and supervision of firearms by departments and agencies under the Home Ministry (KDN) have not been satisfactory, according to the Auditor-General's Report (LKAN) 2022.

The report stated that there are weaknesses in the formulation of policies regarding the management of firearms and ammunition, as well as incidents of the loss of firearms owned by KDN departments and agencies.

There are also weaknesses in the enforcement of the Arms Act 1960 for the renewal of firearm licences that could affect the control of firearms by the Royal Malaysia Police (PDRM), while deficiencies in the management of firearm disposal could pose security risks.

"Contracts for the disposal of various types of old and worn-out weapons and accessories owned by PDRM were signed between the KDN and Company X on Oct 1, 2012, with the contract period until Sept 30, 2014.

"Clause five of the agreement states that the contract value is not less than RM7.5 million, referring to the Letter of Acceptance (SST) dated Sept 7, 2012. The company will supply weapons and accessories and conduct a two-day training as compensation for the disposal of various types of weapons,” the report, presented in the Dewan Rakyat yesterday, stated.

According to the report, the audit review found that PDRM had gradually handed over various types of old and worn-out weapons and accessories between Oct 5, 2012, and Nov 11, 2014. However, in October 2014, the company only delivered accessories worth RM1.16 million to PDRM.

"The audit review found that no follow-up action was taken by KDN against the company to ensure that it fulfilled its contractual obligations, resulting in an estimated loss to the government of RM6.34 million,” the report read.

In response, KDN stated that it had submitted a letter to the relevant company in June this year, demanding an immediate fulfillment of its contractual obligations, and if unsuccessful, legal action would be taken.

"The KDN has established an Internal Investigation Committee to obtain detailed information and recommend appropriate actions against the parties involved. It will also make acquisitions through open tender and will not engage in firearm acquisitions through barter trade,” the report stated.

It also stated that inefficiently managed acquisitions resulted in PDRM not receiving the expected supply of firearms, and the government would incur losses if stricter actions were not taken to ensure the company fulfilled its contractual obligations.

The audit department recommends that KDN and PDRM ensure that contract terms are fully complied with so that the government obtains the best value for each acquisition made, adding that KDN and PDRM should also review legal aspects and actions that can be taken if the company fails to fulfill contractual obligations. - BERNAMA