The report on the Federal Government’s Financial Statements said Putrajaya should reduce its arrears in revenue and recoverable loans, and make repayments on debts on a scheduled basis.

“The chief secretary of the ministry/department also needs to increase their hands-on involvement in financial matters.

“(There must be) a check and balance system and regular evaluation of the work performed by the officers, including providing training to improve the skills and abilities of the officers,“ it said.

The report said the effectiveness of the Internal Audit Unit in each ministry or department should be enhanced, including ensuring members of the unit receive adequate training and guidance.

They should also provide an annual audit plan so that it could be carried out accordingly.

“It also needs to make objective and independent assessments, not only in terms of internal control but also matters concerning risks and governance of the organisation, besides reporting significant findings and making recommendations that impact the organisation.”

According to the report, the federal government’s financial position at end-2018 totalled RM232.883 billion, an increase of RM12.476 billion or 5.7% from 2017.

The operating and development expenditure stood at RM287.055 billion, an increase of RM24.477 billion over the previous period.

It said the federal government had a deficit of RM53.385 billion with a GDP deficit of 3.7%.

The report said the government had chalked up local and foreign loans totalling RM131.599 billion to finance development and repay debts.

Its debt amounted to RM741.049 billion with a debt to gross domestic product (GDP) ratio of 51.8%.

It said the federal government had also guaranteed loans made by statutory bodies or companies totalling RM266.468 billion.

The overall amount of public debt and the government’s financial commitment stood at RM1.021 trillion, it added.