AG's Report 2015: Govt overpaid for cooking oil subsidy

PETALING JAYA: The government paid an extra RM2.92 million in subsidies following weaknesses in the management of the Cooking Oil Stabilisation Scheme (COSS) according to the 2015 Auditor-General's Report (Series 2).
According to Auditor-General Tan Sri Ambrin Buang, the Ministry of Plantation Industries and Commodities (MPIC) had approved monthly cooking oil quota amounting to 82,169 metric tonnes for 25 refineries and 241 packaging companies as at April.
Ambrin said the government had paid a total subsidy of RM2.388 billion for the period from 2013 to April 2016.
He pointed out that temporary packaging quotas were given to 10 palm oil refineries and eight packaging companies without complying with standard operating procedures (SOP) with these temporary quotas were prolonged between nine to 12 months.
He said the temporary packaging quota approval resulted in an excess maximum quota limit between 64 to 464 metric tonnes per month causing an increase in government subsidy expenditure estimated at RM2.92 million.
Ambrin also noted that seven cooking oil quota holders were given permission to appoint third party operators to package the cooking oil even though this also did not comply with standard operating procedures.
He then recommended that temporary quota packs should adhere to standard operating procedures and the distribution period should not exceed six months and COSS approved quota.
Calling for the COSS claim procedure to be improved, Ambrin also urged for more vigorous monitoring.
"Constant monitoring and control on cooking oils should be made to prevent distribution abuse or leakages.
"This is also to ensure that subsidised cooking oils are supplied and made available in the market."
The report which was released yesterday also pointed out that the National Blue Ocean Strategy should be established in collaboration with the Domestic Trade, Co-operatives and Consumerism Ministry and the Malaysian Palm Oil Board to further enhance monitoring at the retailing stage.
COSS is a funding scheme that subsidises palm oil refineries on a monthly basis.