THE following are some of the responses to points raised by the Auditor-General in relation to queries raised in the 2006 report.

Mardi's research management of Intensification in Research Priority Area (IRPA):

Query: The balance from the allocation of a completed project, amounting to RM274,744 was not returned to the Ministry of Science, Technology and Innovation within the specified period. The final report was also not tendered to the ministry.

It was also found that the remainder of an allocation for a completed project, amounting to RM34,151 was used for other purposes without the ministry's approval.

Mardi's reply: Mardi always emphasises the 'End of Project Report' which is sent to the ministry. Currently, there is no mechanism to return unused portion of the allocation at the end of a project.
The unused portion is then pooled together and kept at Mardi. It is now looking into setting up a special fund for the unused balance. Supervision is also being enhanced to make sure that the unused balance is not simply spent.

A-G's comment: Mardi has to obtain the ministry's approval to keep this money.

Query: Thirty-four out of 35 files inspected were found to be incomplete as it did not contain documents such as quarterly financial reports, achievement reports, final reports and agreements.

Mardi's reply: All project heads will be reminded to start project files as well as record all the reports and correspondence related to the project.

The Corporate Management Division has created a file for each project, to record copies of project proposals, reports and correspondence related to the project.

A-G's comment: Mardi has to make sure that all project heads maintain project files that are complete and up-to-date.

Query: An expenditure of RM25,552 was tagged to a project, when it should have been claimed from the management expenses account. Among the expenses involved were travel and hotel expenses, food allowance, monthly rental of photocopy machines and computer maintenance.

Mardi's reply: Only RM1,852 was not used for the project. The balance was used to attend meetings, including cross-functional team meetings, senior officers meetings and IRPA supervisory meetings, all of which are relevant to the research project and were accepted by IRPA and the ministry as research costs.

A-G's comment: Mardi has to identify expenditure which will be used for an approved project.

Query: Twenty memoranda of understanding (MoUs) presented to the Science, Technology and Innovation Ministry ( have yet to be returned and it cannot be ascertained whether they have been signed.

Mardi's reply: Reminders have been presented to the ministry but we have yet to obtain a reply.

A-G's comment: Mardi should follow up to ensure that the memoranda are signed immediately.

Query: The Intellectual Property Management Committee was approved by the Coordinating Board in June 2006, but has yet to start functioning.

Mardi's reply: Mardi takes recognises of the importance of this committee and will set up a specific programme or the purpose of intellectual property management.

A-G's comment: Mardi has to set up this programme as soon as possible and make sure that the committee plays the role it is set up for.

Query: There was purchase of equipment that exceeded the allocation amounting to RM913,872. Among the purchases were computers, scanners and air-conditioner, all of which were basic necessary equipment.

Mardi's reply: The allocation to purchase the equipment is based on an estimation. In some circumstances, rising costs is also a reason why expenditure exceeded the planned allocation. In other circumstances, equipment purchases are done even though there were no allocation. This was to ensure the smooth running of the research as these equipment were necessary.

A-G's comment: MARDI must ensure that equipment purchases do not exceed the approved allocation.

# Armed Forces Fund Board's (LTAT) accounts system

Query: The security of the physical and surrounding area of the LTAT server room has to be enhanced to ensure the safety of the equipment, application systems and database. An electronic keycode device should be placed at the entrance, logbooks should be updated and the cheque printers should be transferred to the Finance Department.

LTAT reply: The LTAT Server room is equipped with an electronic keycode device and close-circuit television (CCTVs). The logbooks are filled by a third party or vendor who carries out maintenance works or sets up equipment in the server room. The cheque printer has not been transferred because the server room's environment is free from dust and temperature-controlled.

A-G's comment: LTAT has to transfer the cheque printer to the Finance Department immediately so that only authorised officers can enter the server room.