According to the report released today, Perwira Niaga Malaysia (Pernama), which occupies 139 Mindef premises to conduct retail business in military camps, failed to pay RM1.31 million in rent after the lease of the premises expired on May 31, 2014.

“The rental income was calculated from June 1, 2014 to Dec 31, 2017 based on the lease payment claim by Mindef to Pernama.

“Apart from that, the audit also obtained a rental assessment from the valuation and property services department for the calculation of rental revenue involving Pernama, amounting to RM8.99 million,” the report said.

The report added that the lease agreement signed by Pernama with the Federal Land Commissioner on May 5, 2010 for 139 premises on Mindef lands nationwide was for a period of 15 years from June 1, 1999 to May 31, 2014.

The report recommended that a proposal be made with the land commissioner to obtain approval for the lease of land and buildings used by Mindef, to expedite the process of preparing rental agreements for all premises occupied by Pernama.

The report also found that a total of RM178,658 from the rental of 36 shoplots at the Air Force Base for 2019 and 2020 was not credited as government revenue but was instead channelled into the Air Force Unit Welfare Fund.

“This occurred because the air base management used a letter from the finance ministry dated June 8, 1985, as the basis for crediting the rent for the 36 shoplots to the Unit Welfare Fund,” the report said.

Such action contradicted paragraph 2 of the finance ministry’s letter dated June 8, 1985, which agreed that the revenue collected from the Armed Forces canteen operators be approved for the payment of the Armed Forces canteen rebate only.

The report recommended that Mindef’s development division monitor all rental agreements managed by the service management headquarters to ensure that all rentals collected are accounted for as government revenue.