KUALA LUMPUR (Nov 21): Former Auditor-General Tan Sri Ambrin Buang found the process of auditing 1Malaysia Development Bhd to be more difficult than usual as the fund did not give its full cooperation by sharing the necessary documents required by the National Audit Department (NAD), he told the High Court today.
Ambrin testified that the NAD special audit team for 1MDB — which comprised 12 officers — experienced certain limitations when conducting the audits, as some of the original and important documents which were supposed to be used to verify transactions and audit evidence were either submitted late or were not submitted at all by the fund.
"These limitations had a significant impact on the audits carried out in verifying the financial position and operations of the company and related transactions," he explained.
For instance, 1MDB did not submit the group's management account for the year ended March 31, 2015 and bank statements from overseas financial institutions.
"No access can be made to the computers, notebooks and servers in 1MDB to obtain data and information for the purpose of cross-reference and analysis during auditing.
"In this situation, I find the 1MDB auditing difficult and that it took almost a year to complete when in fact, it could have only taken within five months," he added.
Ambrin, who is the prosecution sixth witness, noted that the 1MDB audit process started in March 9, 2015 and was scheduled to be submitted to the Public Accounts Committee (PAC) on Feb 24, 2016.
However, due to the alleged amendments done under the instructions of former prime minister Datuk Seri Najib Abdul Razak, the final 'amended' report was only eventually submitted to the PAC on March 4, 2016.
It was initially decided in the cabinet meeting on March 4, 2015 that NAD was to verify 1MDB's accounts and that the report should be submitted to the PAC.
The audit, Ambrin said, was done based on the mandate of the Cabinet and the PAC to verify the audited financial statements of 1MDB Group and to evaluate if the financial performance and activities of 1MDB Group were still in line with the company's original objectives which are:
- investing in projects that can help drive strategic initiatives for long-term sustainable development and encourage foreign direct investment inflows into the country, and
- utilising existing sovereign wealth fund networks in the Middle East and China to bring in foreign direct investment that is suitable for national projects.
Ambrin also stressed that when the auditing process was imposed on 1MDB, all the members of the special audit team have followed the standard procedure of International Standard Of Supreme Audit Institutions (ISSAI 3000) in the auditing process and preparing the final report of the audit. The process is also subjected to the Audit Act 1957.
He was testifying in the 1MDB audit report tampering trial of Najib and former 1MDB chief executive officer Arul Kanda Kandasamy.
Najib is accused of abusing his power by ordering amendments to the audit report to protect himself from disciplinary, civil and criminal action prior to its submission to the PAC.
He is accused of committing the offence at the complex of the Prime Minister's Department through a meeting held on Feb 24, 2016.
The charge, under Section 23(1) of the Malaysian Anti-Corruption Commission (MACC) Act 2009, provides for up to 20 years in jail and a fine of not less than five times the amount of gratification, or RM10,000, whichever is higher, upon conviction.
Meanwhile, Arul Kanda is charged with abetting Najib in ordering the report's amendment, at the same place and time. The charge, under Section 28(1)(c) of the MACC Act, read together with Section 23(1) and 24(1) of the Act, provides for a similar sentence, if found guilty.
Ambrin will continue to read his witness statement before Justice Mohamed Zaini Mazlan on Wednesday (Nov 27).
For more stories on the 1MDB audit report tampering trial, click here.