Statutory Bodies (Financial and Accounting Procedure) Ordinance, 1995

Save as otherwise provided in this Ordinance, the provisions of this Ordinance and any regulations made and instructions issued hereunder shall (unless and to such extent as the

Majlis Mesyuarat Kerajaan Negeri may, by Order published in the

Gazette otherwise, direct) apply to all statutory bodies listed in the

Schedule and the members thereof and other persons in the service of the statutory bodies, and shall be read together and construed as one with the provisions of the State law pursuant to which a statutory body is incorporated.

4

Interpretation

any law enacted by Dewan Undangan Negeri or which the Dewan has the power to make; and

6

any Order or subsidiary legislation which an authority in the State is empowered to make or enact;

“statutory body” means any body corporate listed in the

Schedule incorporated pursuant to the provisions of a State law and is a public authority or an agency of the State Government of

Sarawak but does not include a local authority in Sarawak;

“subsidiary company” shall have the same meaning as that assigned to it in section 5 of the Companies Act 1965 [Act 125], and includes a company wherein a statutory body holds or acquires in aggregate, directly or indirectly, more than one-half of the company’s shares based on paid up capital of such company.

In this Ordinance, a reference to the Yang di-Pertua Negeri shall be construed as a reference to the Yang di-Pertua Negeri acting in accordance with the advice of the Majlis Mesyuarat Kerajaan

Negeri or of a member thereof acting under the general authority of the Majlis.

Inconsistency with any other State laws

Such estimates and accompanying documents shall be prepared in such form and manner as may be prescribed by the State

Financial Authority and the draft of such estimates and accompanying documents shall be tabled and adopted by the Board or members of the statutory body.

Once adopted in accordance with subsection (2), the draft estimates and accompanying documents shall be forwarded to the

Majlis Mesyuarat Kerajaan Negeri, not later than the thirtieth day of

November of each year for consideration and approval.

The Majlis Mesyuarat Kerajaan Negeri may approve, vary or reject any item of expenditure appearing in the draft estimates of a statutory body.

A statutory body shall be bound by the estimates approved by the Majlis Mesyuarat Kerajaan Negeri.

Supplementary estimates

The Majlis Mesyuarat Kerajaan Negeri may approve, vary or reject such supplementary provisions and the statutory body shall be bound by the decision of the Majlis Mesyuarat Kerajaan Negeri.

Virement

For the purpose of this section, any company which is wholly owned by the State Financial Secretary, a corporation incorporated under the State Financial Secretary (Incorporation)

Ordinance [Cap. 36] or where the majority of its issued share capital are held by the State Financial Secretary shall be deemed to be a company which is wholly owned by or a subsidiary of a statutory body.

[Add. Cap. A112.]

A copy of the statements of accounts referred to in subsection (1) shall also be sent by the statutory body to the State

Financial Authority.

9

The Auditor General shall cause the statements of accounts to be audited, and may authorize any person appointed by the statutory body, exercising powers vested in it by the State law to which it is incorporated, to undertake, at the expense of that body, the audit of the statements of accounts on the Auditor General’s behalf or under his directions.

The provisions of the Audit Act 1957 [Act 62] shall apply to the audit of the accounts of every statutory body.

The State Financial Authority shall from time to time issue guidelines, circulars, directions and instructions as to statutory bodies regarding—

Where a statutory body applies under subsection (1) for an extension of the time limit for the submission of its accounts for audit, the Majlis Mesyuarat Kerajaan Negeri, if satisfied with the reasons or grounds for the application, may grant such extension of the time limit as may be deemed necessary but such extension shall not in any case exceed a period of three months in the aggregate in respect of each financial year, and the statutory body shall then submit its statement of accounts for audit within the time limit as extended.

10

Financial year

Where the auditor has in his report pointed out any discrepancies, irregularities and abnormalities in the accounts of a statutory body, the Chief Executive Officer shall submit, with the auditor’s report, an explanation for such discrepancies, irregularities and abnormalities and the action taken or would be taken by the statutory body to rectify the same to the Minister.

A copy of the reports and explanations referred to in subsections (1) and (2) shall be also sent by the statutory body to the

State Financial Authority who shall bring to the notice of the Minister any incompetence or repeated negligence on the part of the officers of the statutory body in the discharge of their financial duties for appropriate action to be taken under section 17.

Minister to cause audited statement of accounts to be laid before

Dewan Undangan Negeri

undertake or authorize the undertaking of any work or service or purchase in excess of such sum as may be determined by the State Financial Authority;

dispose of any of its capital assets with a market value in excess of such sum as may be determined by the State

Financial Authority;

write off bad debts or of any arrears of revenue in excess of such sum as may be determined by the State Financial

Authority;

permit the take over, dissolution or winding up (except in the case of compulsory winding up by the court or its creditors)

of any of its holding or subsidiary companies;

borrow from a financial source other than a bank or financial institution; and

provide loans, credit facilities or financial assistance to any of its members or the Directors of any of its holding or subsidiary or related companies.

No outstanding items of revenue shall be carried to a revenue sub-head as a charge against an advance or suspense account pending the collection of the amount.

No revenue collected in any one year shall be placed on deposit or held in suspense with the object of transferring it to revenue in the following year.

12

cause an increase or reduction of the issued or paid up capital of any of its holding or subsidiary company;

permit borrowings by any of its holding or subsidiary company beyond a limit approved in writing by the Minister after consultation with the State Financial Authority or from a source other than a bank or financial institution;

guarantee or provide any form of security for any loan, or liability or obligation, contractual or otherwise, any of its holding or subsidiary or related company;

appoint or cause to be appointed any consultants, contractors, project managers or professional advisers to undertake or execute any work, project or scheme which is funded by moneys provided from the State Consolidated Fund or any loan or credit facilities in respect of which the Government has provided security in any form whatsoever;

13

cause or permit any of its members and nominees on the Board of Directors of that statutory body’s holding or subsidiary or related company, to be paid or to receive, salaries, allowances or other privileges, in excess of the amount approved by the Government;

cause or permit any of its officers or employees to acquire or hold, directly or indirectly, any shares in any holding or subsidiary or related company without the prior written approval of the Minister;

cause or permit any of its holding or subsidiary or related company to merge or amalgamate with another company which is not a holding or subsidiary or related company of that statutory body without the prior written approval of the Minister;

and

cause or permit any person to be appointed to audit the accounts of any of its holding or subsidiary company.

Audited statements of accounts of holding or subsidiary or related companies to be submitted to the Minister and the State Financial

Authority

The Minister or the State Financial Authority may require the Chief Executive Officer of a statutory body to furnish to him such explanations or clarifications as he may deem necessary on the audited statement of accounts of any holding or subsidiary or related company of that statutory body.

The Minister may direct a Chief Executive Officer of a statutory body to furnish to him for inspection by him or the State

Financial Authority any of the financial statements or accounting records of a holding or subsidiary or related company of that statutory body.

14

Power of Minister to wind up holding or subsidiary companies or replace or remove nominees or employees 13.—

The statutory body to whom an Order is issued by the

Minister pursuant to subsection (1) shall comply with the directions contained in the Order as soon as practicable.

The statutory body shall exercise all voting rights attached to the shares which it holds in the holding or subsidiary company concerned, to ensure that the terms or requirements of the Order issued by the Minister are complied with.

15

If a statutory body shall fail to comply with such Order, the

Chief Executive Officer and each and every member of the statutory body shall be held jointly and severely liable for any loss or damage suffered or incurred by the Government, statutory body or by the holding and subsidiary company to which the Order relates.

Sections 131, 132(1), 132E and 133(1) of the Companies

Act 1965 [Act 125] shall apply to all members of a statutory body in the same way and to the same extent as they apply to a Director of a company.

Prohibition against members, etc., holding shares

acquire, apply for allotment or cause to be issued to him, either directly or indirectly, any share or interest in any holding or subsidiary or related company of that statutory body;

enter into any contract or proposed contract with any holding or subsidiary company of that statutory body;

16

acquire, directly or indirectly, any of the assets, both moveable or immovable, of the holding or subsidiary or related company of that statutory body; or

undertake to provide or carry out any work or render any services of whatever nature to a holding or subsidiary or related company of that statutory body.

Any acquisition, contract, undertaking or allotment made in contravention of subsection (1) shall be voidable at the instance of the statutory body or the holding or subsidiary or related company thereof.

Without prejudice to subsection (2), any member who contravenes subsection (1) shall have his appointment as a member of that statutory body revoked by the authority which appointed him, and the services of any officer, staff or employee of the statutory body who acted in contravention of subsection (1) shall, notwithstanding any provision in his terms of his employment with the statutory body, be liable to be terminated.

Surcharge

has failed or neglected to collect any moneys owing to the statutory body for the collection of which he is or was responsible;

is or was responsible for any payment from the funds of the statutory body of moneys which ought not to have been made or for any payment of moneys which is not duly approved or which would not have been paid by the statutory body but for his negligence;

is or was responsible, directly or indirectly, for any deficiency in, or for the destruction of, any moneys, stamps, securities, stores or other property of the statutory body;

17

being or having been an accounting officer, fails or has failed to keep proper accounts or records; or

has failed to make any payment, or is or was responsible for any unreasonable delay in the payment, of moneys from the funds of the statutory body to any person to whom such payment is due under any contract, agreement or arrangement entered into between that person and the statutory body, the statutory body shall serve on him a written notice calling on him to show cause why he should not be surcharged, and if a satisfactory explanation is not, within fourteen days from the date of service of the notice aforesaid, furnished to the statutory body with regard to the failure to collect, payment which ought not to have been made, payment not duly approved, deficiency or destruction, or failure to keep proper accounts or records, or failure to make payment, or delay in making payment, the statutory body may surcharge against the said person a sum not exceeding the amount of any such amount not collected, such payment, deficiency, or loss or the value of the property destroyed, as the case may be; and with regard to the failure to keep proper accounts or records, or the failure to make payment, or the delay in making payment, the statutory body may, with the approval of the State Financial Authority, surcharge against the said person such sum as the statutory body may deem fit.

The statutory body shall duly inform the person to be surcharged under subsection (1), and the amount of sum surcharge. A copy of such notice shall be extended forthwith to the Minister and the

State Financial Authority.

The statutory body may, with the approval of the State

Financial Authority, at any time withdraw any surcharge in respect of which a satisfactory explanation has been received or if it otherwise appears that no surcharge should have been made, and the statutory body shall at once cause the person to be notified of such withdrawal.

18

The amount of any surcharge made under subsection (1)

and not withdrawn under subsection (3) shall be a debt due to the statutory body from the person against whom the surcharge is made and may be sued for and recovered in any court as the suit of the statutory body and may also be recovered by deduction—

caused its statement of accounts to be audited; or

prepared the annual report of its activities, in accordance with the provisions of the State law pursuant to which it is incorporated, such statutory body shall, on or before the 31st

December, 1995, cause its accounts to be audited and shall prepare the annual report of its activities in accordance with the provisions of such

State law.

19

The provisions of sections 5, 7 and 8—

the salaries, fees and other privileges for members of a statutory body;

the salaries, fees and privileges of members of Board of Directors of any holding or subsidiary company of the statutory body;

the fees or other remuneration payable to the statutory body for services rendered by the statutory body;

the remuneration of an auditor appointed under this

Ordinance and for the costs of an audit carried out under this

Ordinance;

20

powers, duties and responsibilities of members of the board of management or trustees and officers and servants of a statutory body in relation to the accounts and other records of the operation of that statutory body or its holding or subsidiary or related companies;

the appointment of consultants, professional advisers, contractors and project managers by statutory bodies, their holding or subsidiary companies;

the disposal of capital assets by a statutory body;

the transfer of all or any part of the moneys assigned to one expenditure item to another expenditure item;

the writing off of bad debts and other losses of a statutory body; and

prescribing anything which is to be or may be prescribed by regulations.

[Am. Cap. A112.]

Regulations made under this section may provide that a contravention of specified provisions thereof shall be an offence and may provide penalties of a fine not exceeding ten thousand ringgit and imprisonment for a term not exceeding two years.

Saving