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AUDIT ON FOREST MANAGEMENT – MALAYSIAN EXPERIENCE

This report by the Office of the Auditor General of Malaysia examines the issues and challenges in forest management, including illegal logging, lack of enforcement, and delays in processing licenses. It also covers the objectives, scope, and methodology of the audit.

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AUDIT ON FOREST MANAGEMENT – MALAYSIAN EXPERIENCE

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  1. AUDIT ON FOREST MANAGEMENT – MALAYSIAN EXPERIENCE STATE AUDIT SECTOR OFFICE OF THE AUDITOR GENERAL OF MALAYSIA

  2. National Audit Department of Malaysia CONTENTS • Audit Mandate • Previous Auditor General Report • Audit Planning Memorandum On Logging Management - 2008 2

  3. AUDIT MANDATE Under Article 106 and 107 Federal Constitution and Section 6(d) Audit Act 1957, the Auditor General shall perform such other duties and exercise such powers in relation to the certifying accounts and compliance audit and shall in his audit make such examination as he may deem necessary to ascertain whether programme, activities and projects were carried out or managed in an efficient manner with due regard for economy and the avoidance of waste or extravagance. National Audit Department of Malaysia 3

  4. National Audit Department of Malaysia PREVIOUS AUDITOR GENERAL REPORT 5

  5. National Audit Department of Malaysia AUDIT ISSUES • 1. Audit On Logging Concession • - No tender • - Illegal logging • - Loss of revenue • - Lack of enforcement • - Delay in processing license • - Delay in issuing license • - No record of applicants

  6. National Audit Department of Malaysia AUDIT ISSUES • 2. Audit On Forest Plantation • - Lack of manpower • - No soil investigation • - No EIA report • - Lack of enforcement • - Lack of coordination

  7. National Audit Department of Malaysia AUDIT ISSUES • 3. Audit On Logging Management • - Delay In Process Of Gazetting Proposed PRF • - Logging activities carried out before EIA • - Lack Of Enforcement • - Lack Of Machinery • - Delay in taking court actions • - Delay in write-off confiscated timber • - Logging activities near water catchment area • - Lack of coordination between department • - Illegal logging

  8. National Audit Department of Malaysia AUDIT ISSUES • 4. Audit On Issuance Of License • - Without Tender • - Lack Of Enforcement • - Incomplete Manual Operation Procedures • - Royalty, premium and cess not collected • - Wrong calculation on royalty • - No royalty marking

  9. National Audit Department of Malaysia AUDIT PLANNING MEMORANDUM ON LOGGING MANAGEMENT – Concession, Operation and Rehabilitation

  10. National Audit Department of Malaysia AUDIT PLANNING MEMORANDUM • Background • Audit Objectives • Audit Scope and Methodology • Audit Criteria • Planning • Implementation • Monitoring • Work Schedule • Audit Team • Cost Estimation • Audit Programme • Planning • Implementation • Monitoring

  11. National Audit Department of Malaysia • Background • Role & Function of Forestry Department in Malaysia • Policy/Procedures & Legislations • Brief Information Relating To: • Forest Resources • Forest Management • Forest Development • Forest Conservation and Environment Protection • Forest Harvesting • Forest Industries • Forestry Education and Training • Forest Revenue

  12. National Audit Department of Malaysia • Audit Objectives • To asses whether the logging management activities are carried out economically and efficiently in achieving their objectives. • To ensure the environment is conserved and protected.

  13. National Audit Department of Malaysia 3. Audit Scope and Methodology • Scope • The study will be on concession, operation and rehabilitation by State Forest Department. The audit to be carried out for 3 years period (2006 to 2008). • Methodology • Conventional approach and GPS/GIS technology. The study will be carried out by analyzing the document and data at relevant department/agencies • Site visit and interview. • Appropriate method of data collection and data analysis/audit questionnaire will be conducted. • Study of Environment Impact Assessment (EIA) report.

  14. National Audit Department of Malaysia • 4. Audit Criteria • 4.1 Planning • Government Policy • Legal Provisions Relating to Forest Matters • Types of Forest Revenue • Concession & Licensing • Concession Handover • Forest Plantations • Implementation Methods • Maintenance of Asset & Records • Machinery & Equipments • Financial Allocation • Enforcement • Human Resource & Training • Monitoring Mechanism

  15. National Audit Department of Malaysia • .... Audit Criteria (Cont) • 4.2 Implementation • Government Policy • Legal Provisions Relating to Forest Matters • Types of Forest Revenue • Concession & Licensing • Concession Handover • Forest Plantations • Implementation Methods • Maintenance of Asset & Records • Machinery & Equipments • Financial Performance • Enforcement • Human Resource & Training • Monitoring Mechanism

  16. National Audit Department of Malaysia • 4.3 Impact • Environmental • Water pollution – river, flood, erosion, water body • ii. Climate change • iii. Extinction of Flora and Fauna • Revenue • Social • Economic • 4.4 Monitoring • Monitoring Mechanism • - GIS • - Airborne Hyper Spectral Sensing • Monitoring Schedule

  17. National Audit Department of Malaysia 5. WORK SCHEDULE 30

  18. National Audit Department of Malaysia 6. AUDIT TEAM i. State Audit Director - 1 ii. State Audit Deputy Director - 1 iii. Auditor - 1 iv. Assistant Auditor - 4 7.AUDIT COST 8. AUDIT PROGRAMME 31

  19. National Audit Department of Malaysia THANK YOU 32

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