Did rural development ministry overspend? Zahid's aide disagrees with Treasury

KUALA LUMPUR — The Treasury today flagged overspending by the Rural and Regional Development Ministry (KKDW), which is under Deputy Prime Minister Datuk Seri Ahmad Zahid Hamidi, but said funds have been fully disbursed for it to make all outstanding payments. However, Treasury secretary-general Tan Sri Johan Mahmood Merican’s statement on the overspending was swiftly refuted by Zahid’s press secretary at the ministry, Fadzmel Fadzil. Johan today said KKDW’s difficulties in processing payments to contractors stemmed from nearly all of the current year's allocation already being spent. “For several years, KKDW has made commitments and spent more than the annual allocations approved for rural road projects,” he said in a statement today. According to Johan, KKDW spent RM1.8 billion in 2023, exceeding its approved allocation of RM1.1 billion, and RM2 billion in 2024, exceeding its approved allocation of RM1.3 billion. He added that the ministry spent RM2.3 billion in 2025, exceeding its approved allocation of RM1.6 billion, while the approved allocation for 2026 was RM2.1 billion, but actual spending had reached RM1.9 billion as of June. Johan said the Finance Ministry is working with KKDW to address the issue, including by adjusting the ministry's allocation to align with spending priorities. The Treasury secretary-general’s statement follows Zahid’s call yesterday in his capacity as Rural and Regional Development Minister for swifter payments to contractors particularly for work that had been completed and met the ministry’s requirements. This includes rural road projects under KKDW. Johan today said no restrictions had been placed on allocations to the Rural and Regional Development Ministry (KKDW) for rural road projects, with the funds fully disbursed. “The MOF is also identifying savings from other ministries to help offset KKDW's commitments beyond its approved allocation,” he said. He also reminded that each ministry is responsible for planning and managing its spending based on the annual Budget allocation approved by Parliament. However, Zahid’s press secretary at KKDW, Fadzmel, said Johan’s statement was inaccurate, as government financial procedures did not allow arbitrary spending beyond approved budgets. “Every budget request is submitted to the Finance Ministry, and every expenditure is subject to the Government's financial system using the Integrated Government Financial Management Accounting System Moreover, every development project must receive approval from the Finance Ministry. “If an expenditure is indeed irregular or exceeds the allocated budget, it is subject to the Financial Direction. The Government's financial system also does not allow for any project or program to be spent without the approval of the allocated budget. “Therefore, the use of the term ‘exceeding the budget’ provides an inaccurate picture of what actually happened,” Fadzmel said in a statement. He also said the Treasury’s data on alleged overspending did not include the years the country was under the Covid-19 pandemic, when some projects could not proceed. “(Those years are) crucial for understanding the overall status…some projects were affected, (and) when these projects resumed, the contractor's payment obligations were also carried over to subsequent years. “This means that once work has been carried out by the contractor, the Government has the responsibility to make payments according to the progress of the work and the contract obligations. Projects that have been initiated cannot be stopped just because the annual budget has been almost fully utilised,” Fadzmel said. - Sept 2, 2026 The post Did rural development ministry overspend? Zahid's aide disagrees with Treasury appeared first on Scoop .