AUDIT REPORT: 99.2 PCT OF ACTIVE GOVT COMPANIES MEET ESTABLISHMENT OBJECTIVES

KUALA LUMPUR, Feb 23 (Bernama) -- Audit assessments conducted through the e-SelfAudit system to measure the achievement of objectives of government companies found that 509, or 99.2 per cent, of 513 active companies carried out activities aligned with the objectives stated in their constitutions.

In addition, four companies conducted activities that were not aligned or not fully aligned with their constitutions, while 59 companies did not prepare strategic plans and nine others prepared strategic plans that were not in line with their establishment objectives.

“The board of directors is advised to ensure that the accountability chain is strengthened by aligning the company’s core activities so that they consistently comply with the company’s constitution,” according to the Auditor-General’s Report 1/2026, which was tabled in the Dewan Rakyat today.

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The report also stated that an assessment of the board of directors aspect found that 385, or 96 per cent, of 401 non-special purpose vehicle (SPV) companies complied with their respective constitutions, with the number of board members appointed ranging from one to 18.

However, the report noted that 165, or 41.1 per cent, of companies have yet to adopt the recommended board composition as stipulated in a prime minister’s directive requiring independent directors to make up at least one-third of board membership, which could affect the board’s ability to exercise independent and objective oversight.

In this regard, the report recommended that the companies concerned conduct a comprehensive review of their board composition based on their constitutions and the requirements set out in the prime minister’s directive.

The report further stated that audit analysis found that 202 of the 401 companies had established an Audit Committee or its equivalent, while the audit committee function for 68 companies was carried out at the parent company level.

It found that 119 companies had not established an Audit Committee, while 25 companies failed to table Audit Committee reports at board meetings, which could affect internal controls and corporate governance.

Accordingly, the National Audit Department recommended that all the companies concerned establish an Audit Committee in line with best corporate governance practices to enhance accountability and internal control systems, and to ensure that Audit Committee reports are presented at board meetings as recommended.

The e-SelfAudit system is a digital platform developed in-house by the National Audit Department to enable other entities, including gazetted government companies, to conduct online self-assessments.

The system covers assessments involving six main elements — policy, economic, social, environmental, technological and legal — aimed at enabling comprehensive and continuous performance monitoring and evaluation.

Auditing through the e-SelfAudit system began in November 2024 with a pilot project involving 206 companies, before being expanded to 1,650 entities from Feb 6, 2025 to May 30, 2025.

-- BERNAMA