PTPTN to face whopping RM46 bil deficit

PTPTN to face whopping RM46 bil deficit
Oct 25, 10 3:51pm
The National Higher Education Fund Corporation (PTPTN) could face a deficit of almost RM46 billion in five years.

It is found that it approved loans totalling RM23.78mil to 16,013 students who did not even apply for it.

Moreover, a staggering 82 percent of the loan application forms received by the National Higher Education Fund Corporation (PTPTN) for the years 2008 and 2009 are yet to be processed.

According to the 2009 Auditor-General’s Report, 61 percent of the 103,525 forms received in 2008 and all of 124,070 forms received in 2009 have not been processed.

The audit team also found that the incomplete application forms were being piled up in “a haphazard manner” in the Agreement Unit office at the PTPTN headquarters.

In fact, one photograph depicts a huge pile of documents covered with a piece of canvass (left), with the caption saying this was done to protect the documents from the leaky ceiling.

"In our opinion, PTPTN should complete the student loan agreements by signing them immediately.

“In addition, the agreement (forms) must be kept in an organised way to facilitate easy retrieval,” said the Auditor-General’s Report released to MPs today, which also stated that PTPTN would face a cash flow deficit of RM45.89 billion up to the year 2016.

Delays in sending notices

The report said PTPTN, in responding to queries on the overflowing loan application forms, said its Document Tracking System Module (DTS) in the End-to-End Financing System (ETEFS) had yet to be fully developed.

The audit team also noted that PTPTN was storing completed forms that were awaiting transit in a haphazard manner, exposing the documents to theft, loss and fires. The pictures with the report show the documents piled up to the ceiling in the basement of the Agreement Unit office.

The documents are awaiting transit to the storage facility of a private company PTPTN had engaged in 2008 to manage the documents and overcome the agency’s storage problems.

The report said PTPTN must ensure the safety of the documents to prevent any eventuality and expedite the handing over of the documents to the appointed company.

Under these circumstances, therefore, it came as no surprise to the audit team to find that the rate of legal action taken against defaulters had been extremely poor.

Based on a sample of 147,795 borrowers, PTPTN sent 66 percent of the first notice of payment after the 30-day deadline. Letters could end up being sent late by up to 1,350 days.

Deep cash flow deficit

It was also found, from the same sample, that 74 percent of letters of demand were yet to be issued, involving an outstanding amount of RM2.03 million.

Such delays were blamed on PTPTN’s outdated computer system, resulting in the system being only semi-automated. This problem was said to be in the process of being resolved.

“The effect of the delays and failure (to take action) will affect PTPTN’s cash flow and ability to disburse loans, which is increasingly critical,” the report said.

It described PTPTN’s cash flow problems as “critical”, with the debt collection rate hovering at 47 to 48 percent between 2007 and 2009.

Based on a PTPTN Management Board Meeting report, the agency would face a cash flow deficit of RM45.89 billion until the 11th Malaysia Plan (11MP) is tabled in 2016.

“Thus, PTPTN requires additional funds totalling RM8.56 billion during the 9MP, RM15.67 billion during the 10MP and RM21.66 billion under the 11MP,” the report said.

This situation was compounded by the fact that PTPTN had taken loans from the Employers Provident Fund, Retirement Fund Incorporated, CIMB Bank and Ambank to finance its operations.

Aim for 70 percent collection rate

Up to December 2009, a total of RM1.94 billion in interest was incurred by PTPTN as a result of the loans taken.

“The high borrowing cost (from banks), of between 3.6 and 5.3 percent borne by PTPTN (is higher than) the administration cost of 1 to 3 percent imposed on the (student loan) borrowers,” the report added.

On top of this, PTPTN’s bank loans must be must be fully settled between five and 10 years, while the repayment period for borrowers is between 10 and 20 years.

In closing, the audit team urged PTPTN to take drastic measures to resolve weaknesses in its ability to collect debts, beginning with the upgrading of its computer facilities to ensure the proper documentation of borrowers.

The audit team also recommended that PTPTN sets a 70 percent target for collection of dues, as this could affect the turnover of loans to continue borrowing for students.

Just wondering what are the PTPTN people doing everyday at office?
I think everyday they go to the office in the morning at 8, then at 9 minum pagi until 10, then 11.30 went for lunch, 1.30 back from lunch, 2.30-3pm afternoon tea, 4.30-5pm back home. In between the working time chatting, read newspaper, gossipping, on-line, etc.
Then every month end makan gaji buta, year end bonuses, 30 days annual leave, 3-mths maternity leave, numerous courses and meetings.

The PTPTN head should be held fully responsible and the whole department should be revamped.

hrmm,is PTPTN under the G?? If it is,why am i not surprise…

u ka they only have like 2 hotline numbers that seem to be busy all the time

director ptptn should resign, i can ganti

i oso want to lepak kt kopitiam every day

One big leaky hole. Better write off the loans and close down.

they deserve it… :twisted: