Response to Oral Question PL42

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YANG BERHORMAT AWANG HAJI SALLEH BOSTAMAN BIN HAJI ZAINAL ABIDIN

QUESTION:

YANG BERHORMAT AWANG HAJI SALLEH BOSTAMAN BIN HAJI ZAINAL ABIDIN requests the MINISTER OF FINANCE AND ECONOMY II to state whether there are any considerations for the Government to pay late fees and ensure a more efficient invoice process so as not to burden service providers, especially local small enterprises that rely on timely payments. Many vendors complained about delayed invoice payments without clear notification, forcing them to take loans, incur overdue charges, and penalties to pay employees' salaries, SCP payments, and vendors to sustain operations.

YANG BERHORMAT MINISTER OF FINANCE AND ECONOMY II

ANSWER:

Thank you, Yang Berhormat Yang Di-Pertua,

It is undeniable that several invoices have been delayed in payment when the new TAFIS 2.0 system was first introduced in April last year. Among the reasons for this delay are several unexpected technical teething issues that have been addressed, as well as users (including companies) needing more time to adapt to the new system.

For Your Honourable Member's information, the number of transactions in the TAFIS 2.0 system by the Treasury Department has increased overall from approximately 43 thousand transactions in April 2024 to 920 thousand transactions by February 28, 2025, with a value exceeding $2.2 billion. On average, the Treasury Department has processed approximately 84 thousand transactions each month, where around 80 percent have been processed within a period of under 30 days. The rest could not be settled for several reasons, not entirely due to the TAFIS 2.0 system.

For Your Honourable Member's understanding, based on Financial Regulations, the Treasury Department generally will not approve any payment if the claims have not been verified or completed by the relevant department. Verification is required to ensure that the claims presented are in order according to Financial Regulations, including obtaining authorization for expenditures either through quotations or tenders; and having sufficient allocations, as well as affirming that purchases and services have been executed.

For some invoices experiencing payment delays through the TAFIS 2.0 system, the Treasury Department has undertaken several initiatives since last April to help expedite outstanding payments, such as setting up payment clinics; and also a User Clinic for users in Ministries and Departments to receive assistance in carrying out procurement and payment processes. At the same time, the Permanent Secretary of the Ministry of Finance and Economy also holds discussions with the Permanent Secretaries in each relevant Ministry to coordinate and strive to resolve claims issues if any.

Another reason is the slow feedback from suppliers in registering into the TAFIS 2.0 system. Supplier registration into the system is to enable their invoices to be processed immediately. In March 2024, only 432 companies were registered with TAFIS 2.0, meaning invoices from other companies could not be processed because they were not registered with the TAFIS 2.0 system. Through the Treasury Department, suppliers have been contacted to remind them to register. Alhamdulillah, the number of registered suppliers gradually increased in the following months, allowing TAFIS 2.0 to begin processing payment claims. The advantage of the TAFIS 2.0 system is that it has a new process, namely the Goods Receipt or Service Entry Sheet for Departments to verify the receipt of supplies or services for Suppliers to upload invoices for payment processing. This process allows Suppliers to check the status of their claims online through the GVP (Government Vendor Portal). Companies will also receive emails once payment has been approved by the Treasury Department.

Since last April, a Helpdesk has also been operating at the Payment Division, Level 2, Treasury Department, Ministry of Finance and Economy Building, to enable suppliers to make any inquiries or complaints regarding their claims. In this regard, the Ministry of Finance and Economy through the Treasury Department has also made reminders in the Borneo Bulletin newspaper and Social Media to request cooperation from suppliers experiencing problems with TAFIS 2.0 to visit the Payment Division Helpdesk to allow the Ministry of Finance and Economy to conduct further investigations. Suppliers' cooperation to ensure any complaints are clearly shared is very necessary, such as stating the Company's name and claim details to enable the Treasury Department to investigate further as soon as possible and help resolve any payment process issues encountered.

Therefore, the Ministry of Finance and Economy and other Government Ministries and Departments will continuously enhance efforts to ensure payments are made promptly and, most importantly, in accordance with Financial Regulations.

Thank you, Yang Berhormat Yang Di-Pertua.