Clocks, scanners and “miscellaneous items” cost RTM RM9 million, up to 7,200 times over budget

Auditor-General’s 2012 Report (4)
by Eileen Ng
The Malaysian Insider
October 01, 2013

The Broadcasting Department blew its budget spending RM120,210 on clocks and scanners alone, thus overpaying for these items by thousands of times beyond its actual cost.

Despite budgeting RM100 per unit for a clock and RM200 per unit for an A4-sized document scanner, the Auditor-General found that the Broadcasting Department spent RM3,810 per unit for “branded” wall clocks and RM14,670 per unit for the scanners.

In the 2012 AG Report, it found the department bought 20 branded wall clocks and three scanners for national broadcaster RTM’s offices in three states.

The department paid RM76,200 for the clocks, which was 3,810% above its estimated budget, and RM44,010 for the scanners, which was 7,235 times more than its initial budget.

The department also bought five scanners for A3 sized documents at an inflated price of RM20,630 each – its estimated budget was RM1,000 each.

The items were part of eight “miscellaneous items” bought in 2009 for studio equipment at its offices in Kota Baru in Kelantan, Bintulu (Sarawak) and Keningau (Sabah), and which were awarded to a single company through open tender.

While the report did note that the total bill charged by the contractor at RM9.29 million was lower than the department’s estimate of RM9.46 million, the AG expressed concern that costs for certain items were pricey, which is between 15.7% and 7,235% higher than the department’s estimated cost for each unit.

“The procurement of such items were done via open tender but there are certain items in the contract which have unreasonably high costs,” the report said.

In reply, the Information, Communications and Culture Ministry said the estimates were based on comparisons with its previous contracts and was updated in accordance to current market prices.

It also took into account prices of goods, spare parts, training, installation and maintenance services provided by the vendors that had submitted their bids.

“The ministry’s procurement board awarded the contract based on best technical evaluation scores and the best value for money,” it said.

It added the board also took the initiative to compare prices of items offered by companies online before making its decision.

The 20 wall clocks were initially purchased for its role as “slave clocks”, a component which formed part of a proposed master clock system aimed at providing accurate time based on satellite movements to coordinate broadcasting work.

However, the plan to implement the master clock system was cancelled and as such, 14 of the 20 clocks were then used as ordinary clocks, while the remaining six in Keningau were not used at all.

In response, the ministry said a meeting on March 2009 decided that there is no need for “slave clocks” but the item was still listed in its tendering contract in November of the same year.

“However, the contractor offered and supplied branded wall clocks with ‘slave clock’ features worth RM3,810 each. RTM indirectly managed to get high quality wall clocks which exceeded its value for money,” the ministry said. – October 1, 2013.