KUALA LUMPUR — PR1MA Corporation Malaysia (PR1MA) recorded RM42.18 million in overstated inventory and understated expenses, while overstated cost of sales amounted to RM8.11 million in financial year 2023 (FY2023).
According to the Auditor-General’s Report 1/2025, PR1MA had capitalised its sales commissions and legal fees for home unit sales totalling RM42.18 million, which did not comply with the Malaysian Financial Reporting Standards (MFRS) 102 on inventory.
These costs should have been recorded as expenses in the period incurred, it said.
Additionally, PR1MA’s overstated cost of sales and understated staff expenses were recorded at RM8.11 million and RM4.67 million, respectively.
“PR1MA recognised RM289.91 million in cost of sales based on house sales percentage.
However, the cost of sales that should have been recognised was RM281.80 million, based on project completion percentage as of Dec 31, 2023, in line with MFRS 15 on revenue from contracts with customers.
“This resulted in cost of sales and an overstated net shortfall of RM8.11 million,” the report stated.
PR1MA, or 1Malaysia People’s Housing Project, was an affordable housing scheme targeting middle-income Malaysians launched in 2011 under the Datuk Seri Najib Razak administration.
The audit report also revealed that PR1MA paid RM4.67 million in staff bonuses for 2023, which should have been recognised in the same year under MFRS 110 on events after the reporting period.
“However, PR1MA only recognised the RM4.67 million staff bonus expenditure in 2024, leading to understated staff expenses and an overstated net shortfall of RM4.67 million,” it added.
The report urged PR1MA to enhance monitoring of its subsidiary companies’ operations and financial management to ensure their sustainability and ability to generate good returns for PR1MA while achieving its establishment objectives.
It noted that four out of PR1MA’s six subsidiaries recorded losses in their respective financial statements for FY2023.
“PR1MA must also reassess its housing and commercial project development strategies, aligning them with current market needs to improve sales and meet project development objectives.
“Additionally, PR1MA must prioritise governance management to enhance efficiency and transparency in its operations,” it added. – February 24, 2025