Audit Roport: UiTM losing RM51.08mil in failed compensation claims

KUALA LUMPUR: Universiti Teknologi MARA (UiTM) could potentially lose some RM51.08mil following delays in seeking compensation from 239 scholarship holders, who breached their contracts.

According to the Auditor-General’s Report (LKAN) 2021, weaknesses in its compensation claim process against these scholarship holders had resulted in a loss of revenue amounting to RM7.49mil.

Audit findings conducted on 381 of the 1,496 debtors in breach of contract until December 2021 found that it involved a sum of RM67.08mil.

“The audit found that a total of 86 out of 381 debtors in breach of contract with a total debt value of RM6.23mil were written off in 2019 by UiTM’s Finance and Development Committee,” the report stated.

It said the write-off of debts, amounting to RM6.23mil, was due to the university’s failure to take legal action before the six-year time limit, debtors already being declared bankrupt and the absence of debtors’ files at UiTM’s legal adviser’s office.

In addition, the report stated that a total of 259 out of 1,496 scholarship holders had breached the contract for failing to complete their studies within the time period set in their agreements, with compensation due amounting to RM52.34mil.

“UiTM’s delay in seeking compensation against this group of debtors has resulted in the university losing revenue amounting to RM1.26mil and potential revenue amounting to RM51.08mil,” the report stated.

It stated that the delay in preparing paperwork for the approval of UiTM’s Human Resources Career Development Main Committee and the absence of several documents related to the breach of contract of scholarship holders were also identified as the cause of the failure to claim damages.

The audit report recommended that the institution must ensure circulars, work procedures and contracts in force are complied with, implemented and efficiently monitored for compensation claims against scholarship holders who breach contracts.

It also recommended that the university improves coordination, communication and monitoring of work between UiTM’s Career Development Division, Zone 2 Finance Unit, the treasurer’s office and its PUU office, either at the implementation or top management levels in relation to legal actions and re-collection of public funds. – BK