a. Since the year 1974, the Government of Malaysia has implemented the Rural Water Supply Programme [Bekalan Air Luar Bandar (BALB)] under the Accelerated Rural Water Supply in the Second Malaysia Plan (1971 to 1975) and continued until Eleventh 27 Malaysia Plan (RMKe-11). The main objective of BALB programme is to provide clean and treated water to rural communities throughout the country (including placement outside the local authority area) to improve their health and quality of life. Thus, simulating the economy, industry, agriculture and tourism development. The main scopes of the programme are reticulation, alternative and upgrade/build new plant. Ministry of Rural and Regional Development [Kementerian Kemajuan Luar Bandar dan Wilayah (KKLW)] will hand over the completed BALB reticulation project to State Water Authority [Pihak Berkuasa Air Negeri (PBAN)] while BALB alternative project to Department of Orang Asli Development (JAKOA) for operation and maintenance purposes. For the period of Tenth Malaysia Plan (2011 to 2015), there were 141 completed projects with an allocation of RM1.254 billion. As at 31 December 2015, a total of 129 (91.5%) from 141 projects have been completed while 12 (8.5%) projects are still under a Defect Liability Period (DLP).
b. The audit performed at KKLW and 54 villages/locations revealed that in general the BALB Programme has achieved the target. The expenditure performance for the programme was good as 99.9% of the allocation was utilised. The procurement management was properly executed, especially in appointment of the contractor, members of Quotation/Tender Committee and the price negotiation meetings‟ resolution. However, the implementation of BALB project was less satisfactory due to some weaknesses as follows:
i. a total of 17 villages/locations of BALB reticulation project were not utilised properly i.e. uninstalled and un-transferred water meter as well as uncompleted meter installation;
ii. a total of 6 villages/locations of BALB reticulation project amounting to RM10.64 million were not utilised due to low water pressure; losses and nonfunctional water inlet valve; vandalism and end capped pipeline;
iii. 6 out of 8 BALB alternative projects failed to supply water to the villagers;
iv. 46 out of 71 BALB alternative projects which have been fixed are yet to be surrendered to JAKOA for operation and maintenance purposes. However, 19 of those fixed projects were beyond its operation and maintenance duration; and
v. 11 out of 54 BALB projects visited worth RM14.6 million were in local authority jurisdiction which was not supposed to be included in BALB scope.