KOTA KINABALU: Sabah’s proposal for unused federal development funds to be placed in a special trust fund is not accepted by the Federal Government, says state Finance Minister Datuk Masidi Manjun.
He said the Federal Government explained that the move is not possible as it is against current regulations on treasury practices and rules.
“The Federal Government is not agreeable to our suggestion as it says it will involve some amendments to the current Treasury practices and rules (Treasury Instructions),” he said when asked about efforts to ensure development funds are used up.
Sabah was allocated RM6.7bil in development funds under Budget 2025 with concerns over its ability to fully utilise the allocations, given that previous sums were still not fully used up due to delays caused by bureaucratic and technical requirements of projects that resulted in them not being completed within the year.
Last year, the state assembly unanimously approved the establishment of a Sabah Special Trust Fund as a vehicle to place annual unused federal development funds should the projects face delays.
It was aimed at ensuring the completion of identified projects that might have been delayed for various reasons.
On Saturday, Prime Minister Datuk Seri Anwar Ibrahim told Sabah state leaders to ensure the biggest development funds under Budget 2025 will be used up efficiently without any delays or corruption.
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 issues, have made it difficult to implement the identified projects within the year. As such, unused funds are taken back by the Federal Government.
On Sunday, Deputy Chief Minister I Datuk Seri Dr Jeffrey Kitingan urged the placement of such unspent funds to be placed in the trust account.
“In the past, the problem was that these allocations were recycled. By the end of the year, you get the money, but the account has to be closed and you have to return the money.
“This time around, we still want it to be put in a trust development account, so that the allocations can be carried over for us to implement the projects,” he added.
Deputy Chief Minister III Datuk Shahelmey Yahya said Sabah needs to reconsider how 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 state Works Minister, said.
In Budget 2025, the federal allocations totalling RM6.7bil also go to Pan Borneo Sabah work packages as well as for upgrading rural roads, rural water and electricity supplies, slope restoration and road maintenance.
