AG Report: RM59.63m contractor advance payments overdue for more than 10 years

KUALA LUMPUR: A total of RM68.81 million in contractor advance payment receivables across 24 projects remains unrecovered, with RM59.63 million, or 86.7 per cent, outstanding for more than 10 years.

Auditor General Datuk Seri Wan Suraya Wan Mohd Radzi said a major portion of the arrears involved companies that had been wound up or dissolved, while delayed follow up action had further hindered recovery efforts.

The Auditor General's Report 2/2026 also found that an unpaid balance of RM5.67 million in mobilisation payments for two projects was not reported as uncollected receivables, resulting in an inaccurate representation of the government's financial position.

"The relevant ministry should take follow up action by submitting Proof of Debt forms to the Insolvency Department for wound up companies, taking legal action against active companies, and ensuring all uncollected mobilisation payments are reported immediately," she said in a statement.

In a separate finding, receivables for utility relocation costs stood at RM90.50 million as at Dec 31, 2025, with RM84.05 million, or 92.8 per cent, overdue by more than 12 months.

However, Wan Suraya said RM30.46 million of the total should not have been recorded as receivables as it involved 10th Malaysia Plan projects fully funded by the government.

"Additionally, claims for utility relocation work totalling RM63.16 million for 11 projects have yet to be submitted, despite the six months following the issuance of the Certificate of Practical Completion having expired.

"This situation compromised the accuracy of government revenue records and reporting while increasing the risk of delayed cost recoveries," she said.

She also recommended for the works ministry to ensure utility relocation cost recovery records were regularly reviewed, verified and updated, and that claims were submitted within the stipulated timeframe.

The Auditor General's Report 2/2026 comprises 15 documents covering government finances and activities.