Preliminary-Blueprint-Eng

EXHIBIT 6-10
Targeted Cost Categories for review by 2015
Cost Category
Travel & Living Allowances
Professional Service, Other
Purchased Services, and
Hospitality
Professional Service, Other
Purchased Services, and
Hospitality (Security)
Purchases for Minor Support and
Maintenance
Utility Expenses
Supplies and other materials
Raw materials
Transportation
of materials
Total
1 Estimated cost savings are based on 2012 budget amount by individual operating item savings percentages
Through this rationalisation effort, the Ministry expects to reduce
the annual cost of those initiatives that can be deprioritised by
approximately RM579 million to RM813 million by 2015. These funds
will be reallocated to other Blueprint priorities.
Any new initiatives introduced will be subject to stringent evaluation.
This will ensure that the new programmes do not tie up valuable
human and financial resources that could have greater impact if used
elsewhere. To this end, the burden of proof will be on the proposing
division. It will need to demonstrate: (i) the potential positive impact
on students, teachers, and principals; (ii) the manpower and financing
required to deliver the programme and whether these resources are
new or to be reallocated; and (iii) the tradeoffs that this reallocation of
resources would require.
revising procurement processes
As current contracts come up for renewal, there is an opportunity to
tighten existing procurement mechanisms and processes to ensure
greater value for money. The Ministry has undertaken a detailed review
Improvement Plan 2011 Actual
� Reduce unnecessary meetings
� Explore alternative work
arrangements (e.g. virtual
meetings) to reduce travel costs
� Reduce 5% contract value, by
increasing number of schools
per contract
� Reduce 5% contract value, by
increasing number of schools
per contract
� Reduce electricity bill by
introducing LED lights
� Tighten guidelines to control
spend across MOE
Estimated Cost
Savings (p.a.) 1
RM 660M RM 10M
RM 710M RM 47M
RM 1,051M RM 44M
RM 502M RM 73M
RM 136M RM 16M
RM 3,059M RM 190M
Malaysia Education Blueprint 2013 - 2025
Chapter 6 Ministry Transformation
of individual line items to identify opportunities for cost savings. This
includes potential measures such as devolving the authority for the
procurement of certain goods and services to state authorities. This is
to enable better matching of supply and demand. Another potential
measure is to contract out certain services to the private sector in cases
where the Ministry is less well-placed to provide such services.
This exercise is expected to generate annual savings of RM190 million
based on actual expenditure in 2011. This is spread across various
line items such as cleaning and utility expenses within the education
operations cost category (Exhibit 6-1o). The money saved through this
initiative can then be reallocated towards the Blueprint’s priorities.
The Ministry will also ensure that this detailed review process
cascades down to the JPN and PPD levels. The significant variances in
expenditure observed at these levels indicate that there are important
lessons that JPNs and PPDs can learn from each other. JPNs and PPDs
will be required to benchmark their expenditure according to peer
performance and justify their variances.
6-12