KOTA KINABALU: The federal government has shot down Sabah’s proposal to keep unused federal development funds in a special trust fund, says state Finance Minister Datuk Masidi Manjun.
Masidi said Putrajaya had explained that the practice would violate current Treasury rules, which would require amending federal legislation affecting the Treasury Instruction.
"The Federal government is not agreeable to our suggestion as it would involve some amendments to the current Treasury practices and rules," he told The Star when asked how the state planned to ensure Budget 2025 development funds are completely used.
Sabah was allocated an increased RM6.7bil development fund under Budget 2025, up from RM6.6bil and RM6.5bil in the previous two budgets respectively.
However, the state government continues to grapple with using up the allocations after previous allocations could not be fully utilised within the year due to bureaucratic and technical delays.
In a bid to expedite this, the state assembly last year unanimously approved establishing a special Sabah trust fund for the state to place annual unused federal development funds meant for projects that encounter delays.
It was aimed to ensure the completion of the identified projects that might have been delayed for various reasons. Unused funds are taken back by the federal government.
The issue of unused annual federal development funds continues to bog down the state government as the bureaucratic requirements, technical issues, and land claims among a host of other issues make it difficult to implement the identified projects within the year.
“We will now just have to speed up the implementation so that as much as possible of the allocation is spent during the year," Masidi added.
On Saturday (Oct 19), Prime Minister Datuk Seri Anwar Ibrahim told Sabah state leaders to ensure the biggest development fund under Budget 2025 will be used free from delays or corruption.
Following that, Deputy Chief Minister I Datuk Seri Dr Jeffrey Kitingan on Sunday (Oct 20) reportedly reiterated the call to use the trust account to carry over the funds to the next financial period to continue the affected projects’ development, instead of needing to be returned to Treasury if unused.
Deputy Chief Minister Datuk Shahelmey Yahya also said Sabah needs to consider a fresh approach to streamline project implementation to ensure whatever amount is allocated can be fully utilised
“We need to emphasise the aspect of implementation," Shahelmey, who is also state Works Minister said.
