A Challenge to the Accounting Profession

There have been threatening calls to renew the NEP that could be more correctly called the Never Ending Policy on account of the massive leakage as depicted by the unexplained distribution of APS.

Hence we should create another entry in the Malaysian Guinness Book of Records by devising a new accounting standard known as Accounting Standard No.2020.

Accounting for Leakage for NEP Policy (AS 2020)

Since we have the situation where losses are incurred, the nation needs to know how much the GDP has been affected by inefficient and ineffective policies and procedures.

These losses would come under the following main categories:

Students being selected for higher education who do not complete their studies
Students who complete their overseas course but fail to return home
Students who do not repay their student loans
Students who are displaced by less deserving ones
Special residential schools

Contractors who receive jobs but fail to deliver
Contractors who are allowed massive cost over-runs
Contractors who deliver only after long delays

Projects that are abandoned
Projects that are not feasible
Projects that have serious problems after the hand-over

Special share allocations
Special business allocations
Special development grants

Housing price discounts
Where a rich Bumiputra can buy unlimited houses enjoying a discount that is ultimately borne by the others who may be struggling to buy a first home.

Regarding student dropout rate, the following can be considered.

Assuming that 6000 Bumi students are given priority over better qualified non-Bumis in both local and overseas universities and that annual costs are RM30,000(local) and RM80,000(abroad)

the annual cost for the 12,000 students is RM180m and RM480m

Assume a Failure rate of 25% average for these underqualified students and the annual wastage per year is RM45m and RM120m respectively or a total of RM165m

Just on education alone, the wasted expenditure over 10 years could be RM1.65 billion. This amount can be entered as a Loss to the nation’s coffers.

The RM660m per annum can be considered as the extra taxes borne by non-Bumis as they have been deprived of their rights. In addition, the nation is the ultimate loser as these talents do not develop further or are lured to other countries like Singapore where they will devote their efforts to compete even more passionately as Malaysia denied them a fair chance at success.

It should be quite obvious to all that public disclosure of all such expenditure must be fully disclosed so taxpayers can fully appreciate the full costs and the effectiveness of such affirmative programs.

If we just take the AP numbers and extrapolate these to some other ministries, one arrives at some mind-boggling numbers of just how much the system is haemorrhaging; so much so that even the former PM can talk about corruption being "over the table".



If you don't like my numbers, feel free to put in your own. Better still, ask the government to publish all the numbers.

photo from: http://www.ee.ryerson.ca:8080/~elf/abacus/photos.html