AUDIT REPORT The National Audit Department has discovered that Federal Land Development Authority (Felda) procurement contracts worth RM148.42 million were signed without proper authorisation.

They involved a total of 64 contracts for the procurement of "light detection and ranging" (LiDAR), a remote sensing method, that were allegedly signed by the director of land management department without authorisation.

No assessment on financial performance was conducted on these contracts - 16 contracts worth RM11.4 million in 2013 and 48 contracts worth RM38.72 million in 2014.

"The LiDAR data collection by Bumitouch Sdn Bhd from 2013 to 2015 was already carried out," said the 2015 National Audit Report (Series 2) tabled in Parliament today.

"Full payment of RM40.57 million for 53 out of 64 contracts with Bumitouch was made although deliverables of LiDAR were not fully received.

"Works were commenced between 39 to 136 days prior to the appointment of approved contractors for 45 out of 64 LiDAR contracts worth RM33.83 million," it revealed.

In its explanation, Felda told the auditor-general that only 64 contracts - between Felda and Bumitouch - worth RM50.12 million were signed by the said director.

Felda said the rest of the 98 contracts - between Felda and Skyline Access Sdn Bhd - worth RM98.3 million were signed by Felda general manager.

The works were carried out based on the work order signed by the director who was not authorised to sign, the report said.

"The use of LiDAR technology for replanting purposes could not be commenced because the deliverables for the period October 2013 to May 2015 for the related areas were not fully received," it said.

LiDAR was not the only issue the audit report found fault. It identified several procurements and contracts after it audited 15 subsidiaries of Felda.

Felda had told the auditor-general that Bumitouch agreed to supply the outstanding deliverables on Nov 2016.

The audit report pointed out that a full payment of RM40 million had been made, although the contract for the blueprint of Felda's broadband project was not prepared.

The blueprint of the broadband project was supposedly carried out by Felda Prodata Sdn Bhd.

"The implementation of the broadband project which cost RM566 million was only completed up to the preparation of blueprint," it noted, adding that the pilot and full roll-out project had been suspended since Jan 29 2015.

On top of that, MCM Value Sdn Bhd received RM209,000 for the value management on broadband project without any contract.

No feasibility study conducted

The audit report said no feasibility study and due diligence were conducted on both broadband project and LiDAR procurement.

"The appointment process for contractors made by Felda for both projects, did not comply with the Felda Regulation of Contract and Supply 2006 (Amendment 2012)," it said.

The audit report noted that a total of RM236 million were spent between 2013 and 2015 for the management of Felda and its subsidiaries’ projects as of June 2016.

An audit carried out between January and June 2016 revealed that planning, implementation, monitoring and management of projects by Felda and its subsidiaries were not satisfactory.

The audit report also revealed that the establishment of four Felda's subsidiary and sub-subsidiary companies on the implementation of the Sturgeon Fish Farming Project, Savaro Restaurant and Schneeballen Pastries Project, were done without the approval of minister and finance minister.

The report noted that Felda had pledged to obtain the relevant minister's approval in future.

It said after RM8.4 million spent by Savaro Restaurant Global Settlers Sdn Bhd on its five Savaro restaurants, these restaurants ceased their operations within two to three years.

The report also noted that due to lack of feasibility study and due diligence by Felda, it suffered a total loss of RM73.63 million on the operation of fish farming project, Savaro Restaurant and Schneeballen Pastries.

The audit report called on Felda to take disciplinary action or surcharge on officers responsible for any actions which violated the regulations and laws.