BAC 2654 Public Sector Accounting

Title : Perbadanan Tabung Pendidikan Tinggi Nasional (PTPTN)

NO NAME STUDENT ID

1 PANG REH CHEE 1131121097

2 KOK YING MIAN 1131121227

3 TAN CHIN RUI 1122702661

4 ANDREW WONG THENG FONG 1131121585

Group Name : Andrew’s group

Background

PTPTN Education Financing Scheme • Issued by National Higher Education Fund Corporation/

Perbadanan Tabung Pendidikan Tinggi Nasional (PTPTN) in 1997 under Perbadanan Tabung Pendidikan Tinggi Nasinal Act 1997 (Act 566)

Objective

• Providing education financing to students pursuing studies in local institutions of higher education.Finance their course fees and cost of livingDiploma, first degree, master, doctorate and professional

courses levels Financial Constraints

University

• Universities and University Colleges Act 1971;• Universiti Teknologi MARA Act 1976;• Private Higher Educational Institutions Act 1996;• Polytechnics established and maintained by the Minister under the

Education Act 1996; and• Any other higher educational institutions established or deemed to

have been established under the Education Act 1996 and which is determined by the Minister to be a higher educational institutions.

Who

• Citizen of Malaysia;• Does not exceed 45 years of age on the date of application;• Been offered a place at IPTA/ IPTS and Polytechnic by fulfilling entry requirements

determined by the Ministry of Education and Malaysian Qualifications Agency (MQA);• Course pursued must have registration approval from the Ministry of Education;• For IPTS students, course pursued must have the Certificate of Accreditation from the MQA

and still valid on the date of application;• For a student who has other qualifications, verification must be obtained from the

department or agency as stated above;• Remaining period of study at the time of application should not be less than one (1) year; • Has no other sponsor(s); and• Has opened SSPN-i account

Takaful Group

• Financing amount disbursed to recipients will be fully covered by the companies under takaful insurance

Termination• Do not meet the minimum requirement of grade result• Withdrawal study from approved IPT• Voluntary terminate

Government Agencies Accountable for PTPTN Loan Program

• National Higher Education Fund Corporation/ Perbadanan Tabung Pendidikan Tinggi Nasional

Manage disbursement for the purpose of higher educations Collect loan settlement Collect deposits, design and offer saving schemes for the purpose of

saving for higher education Carry out any other functions given to the PTPTN under any written

legislation

VISIONTo become a leading institution in education financing management by

2015

MISSIONTo manage fund for financing students in institutions of higher

education

OBJECTIVETo ensure efficient financing for eligible students to pursue education at institutions of higher learning in line with the government's aspiration

to guarantee no student is deprived from tertiary education due to financial reasons

• Ministry of Higher Education/Kementerian Pengajian Tinggi Provides financial assistance at all levels of higher education Approved institutions of higher education

• Malaysia Qualification Agency Approved course that can apply PTPTN Ensure the high quality assurance of the program

• Ministry of Finance/Kementerian Kewangan Malaysia Allocate fund to PTPTN

Budgeting Preparation of Estimates • According to PTPTN Act 1997, PTPTN shall submit an estimate of the

expenditure to the MOHE • The minister notify PTPTN about the amount authorized for the

expenditure before the beginning of the year • PTPTN may submit to the Minister at any time a supplementary

estimate of its expenditure • Minister may allow the whole or any part of the additional expenditure• No information regarding the budgeting amount

Budgeting

Expenditure On The Fund • Granting of educational loans to students for the payment of fees,

equipment and aids, cost of living expenses • Administrative expenses including remuneration, retirement benefits,

gratuities and allowances of the servants and officers of PTPTN • Other expenses incidental to the management of the fund and

functions of the PTPTN

Budgeting

Date Actual Accumulated Amount (RM’ billion)

Total Students (million)

Incremental Amount (RM’ billion)

31 August 2012 45.41 2.03 -

23 January 2013 48.09 2.14 2.68

31 October 2013 52.69 2.35 4.83

24 August 2014 56.69 2.46 3.77

30 September 2015 58.60 2.97 1.91

• The amount increased by RM2.68 billion (5months), RM4.83 billion (9months), RM3.77 billion (10months) and RM1.91 billion (13months)

• Due to the low repayment amount, PTPTN has decided to decreased the loan amount from year 2014

Loan Amount

Budgeting

Repayment • Oct 2014 – March 2015, RM348.46 million collected through 20%

discount incentive • RM331.45 million collected through 10% discount incentive in the

same period • Discount given were RM87.12 million and RM33.15 million

respectively • As of March 2015, the borrowers had started to make repayment

totaling RM6.24 billion

Budgeting

New Adjustment Loan Amount Beginning November 2014• Full loan – students whose parents getting 1Malaysia People’s Aid (BR1M)• 75% of loan – students with household income <RM8,000• 50% of loan – students with household income >RM8,000 • Loan decreased by 5% for students attending local universities• Loan decreased by 15% for students attending private universities

Number of students

receiving full financing from the PTPTN is expected to reduced by

43% (180,000 to 102,000).

Exemption of PTPTN Loan • Under Budget Plan 2010, PTPTN loan will be converted to scholarships

for students who get a first class honour degree• Conditions : 1. Attended full time course 2. Completed the study within the period 3. PTPTN financing does not overlap with other sponsorship4. Submit the complete application within 12 months from the date of

convocation5. Course attended have been accredited by Malaysian Qualification

Agency (MQA)

• RM116,230 has been allocated for exemption of PTPTN loan • 4,430 graduates eligible for exemption between 2005-2009 • Only 1,335 graduates apply for the exemption • Remaining 3,095 borrowers who were eligible did not make any

application

Auditor General ReportIssue #1: ELMAS Is Not Comprehensive and Not Secured• Applications for extension of loan and deferment of repayments were

done through another system which is called e-UPKB.• E-UPKB does not share the same user interface with ELMAS and

ELMAS-I

Recommendations• Reconstruct the whole interface of its data system• Creation of Matrix Access Control which ensure a detail user access

Auditor General ReportIssue #2: 104 Unused Personal Computers• 104 unused PCs are found• Possibility of fraud/collusion• 2 laptops per officer – a waste of resource

Recommendations• Policy of 1 laptop per officer• Excess laptops must be returned immediately

Auditor General ReportIssue #3: No Service Level Agreement/Guarantee• There is no SLA – supplier failed to provide WAN network service• There is no SLG – unable to ask supplier for repayment and also to impose

penalty

Recommendations:• Draft the SLA immediately and signed by both parties• SLA should define the performance standards and also includes the rights

of both parties

Auditor General Report

Issue #4: Data Cleansing of ELMAS & ELMAS-i• No data cleansing• Accumulation of old and outdated data• Damaged the integrity and consistency and slows down the whole

system

Recommendations• Data cleansing should be carried out systematically and periodically• Remove data is more than 7 years old

Auditor General Report

Issue #5: No Training on Disaster Recovery Simulation• Staff may not be competent and aware of their responsibilities in the event of

disaster• Possibly halt the entire operation and adverse impact on cash flows

Recommendations:• Disaster recovery plans must be laid out and communicated to the staffs• Data and backup stored at separate locations around the world• Database should be periodically tested to ensure works as intended and also to

detect the vulnerability to attacks

Emerging Issues

1. Exemption for PTPTN Loan Repayment• First Class Honours• 4,430 students eligible – 2005-2009• 1,335 students applied• June 2012 - 13,192 students exempted • 33 top scorers – medical scholarships• Serve as government doctor – 10 years• Inequality rate of First Class Honours• Should have uniform rate(CGPA)

Emerging Issues

2. Reduce the Size of PTPTN Loan• 5% - Public Universities• 15% - Private Universities•Medicine course not affected• Reduce number of students from 180,000 to 102,000

Emerging Issues

3. 20% Discount on PTPTN Loan• 1st Oct 2012 – 20th Dec 2013 – every level• 10% given to installment repayment• 21,289 borrowers – Total discount RM15.53• 2,962 borrowers – full repayment – RM15m• Oct 2014 – March 2015• 39,239 borrowers – RM87.12 million• 10% discount – 119,954 bprrowers – RM331.45m

Emerging Issues4. Number of Defaulters increased (Biggest problem)• Influence next generations – insufficient fund• Reason – change address/email• Unemployed - Email to PTPTN to delay repayment

5. Court/Legal Action • First time (2005)• 2nd & 3rd Notice letter being ignored• 200 graduates from first bath (1997)• Publish defaulters’ name on newspaper• 2006, decide not to publish anymore - ineffective

Emerging Issues

6. Barred the Defaulters from Leaving Oversea

• 2005 – barred 81 defaulters (1999)• 25% make repayment• Between 2001-2014, 134,664 students had been barred• 2014-2015, still 80,000 students blacklisted• Monthly installment – sign contract

Emerging issues

7. Payroll cut• Implemented since September 2015 • Duty of an employer to deduct from the salary of recipient, upon

being notified by IRB • Raising the dissatisfaction and rebuttal of borrowers • CUEPACS declared that cutting the salaries with maximum amount is

unreasonable • CUEPACS might withdraw authorization for PTPTN to make salary cut

for civil servants

• PTPTN has returned the monthly deduction of December to 3,193 borrowers • Civil servants with outstanding loans from the PTPTN must negotiate

the methods of repayment • IRB appointed as collection agent under the PTPTN Act 1997 • Pay to the PTPTN the total sum of repayment collected every three

months • Due to this issue, the government has decided that effective from

November 1st, IRB no longer acts as PTPTN collection agent

Emerging issues

8. Central Credit Reference Information System (CCRIS)• Online system that collects credit information on borrowers • Used CCRIS to educate borrowers, discipline them in making payment

regularly • First stage involve 173,895 borrowers who had not started repay their loan

three years after graduating • Apply for loan, financial institution will first evaluate credit worthiness of a

person• Analyzing the loan balance, record of installment payments for a period of

12 months

Conclusion

• PTPTN helped a huge number of needy university students in completing their studies • Repayment of funds had been an emerging issues • All loan receivers have the responsibility to make repayment • To give an opportunity to the future generation to further their

education • PTPTN should be considerate when taking actions and the borrowers

should always follow up with the repayment