Public Service Department in Malaysia

Table of Content


The various government agencies were established by the government plan, control, assist and implement agency will be able to perform its functions smoothly, the agencies concerned must be organised in a proper, systematic and effective manner. In addition, the government would appoint officers to hold public services posts at various levels. The administration of a government agency would be incomplete without financial allocation to pay for all its activities.

To finance the agencies, a yearly allocation is given based on their financial needs to enable the agencies to carry out activities and responsibilities entrusted to them. At present, the agencies established are responsible for providing public services in the field of social (welfare), economy, security and law. In the government administrative machinery the government agencies are comprised of three main components, namely ministries, departments and statutory bodies.

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At ministerial level the functions of the main agencies are to formulate, control and implement government policies, while a department levels the agencies are responsible for implementing all the policies. Agencies of statutory bodies are semi government in structure and are responsible for carrying out duties assigned to them to meet the government aspiration.


Central agencies are bureaucratic structures which perform functions thought to be crucial to the common interests of government departments.

Central agencies take the lead in or contribute greatly to the performance by coordinating the development of related policies between departments, developing policies which various departments must follow and monitoring the implementation of policies. Widely recognized that senior officials in central agencies play roles in the policy process that pose serious questions about their accountability to Parliament.

More directly, several circumstances surrounding central agents position in government, point up the degree to which these officials are a breed very much apart from those in other departments. They are enjoying very high levels of educational and professional achievement. They are young and share a confident perception of success and upward mobility. They also strong motivations and feelings of personal satisfaction and efficacy, coupled with the reality of high incomes and security of tenure in public service.

They can work in small organizational unit, characterized by collegial decision making. Before embarking on an analysis of central agents’ accountability, the concepts of responsibility and accountability require conceptual clarification. Five such functions may be delineated 1)Development of strategic planning and formulation of substantive policy 2)Development of integrated economic and fiscal policy 3)Allocation of budgets and management of government resources 4)Management of senior personnel )Conduct of federal provincial relations


Budget and management central agencies tend to be key players in public management subsystems, given their expertise, continuity, and power. The common pattern in performance management adoption has been for elected officials to rely on central agencies to design and oversee reforms, and states with influential budget officers tend to be the most enthusiastic adopters of performance management systems.

Central agency officials are therefore in a strong position to select and shape policy ideas to match their preferences. In each state the main promoters of performance management were central agencies, primarily the finance department, and to a lesser extent the state wide personnel office and legislative auditors. Together, this group of actors made up the main formal source of public management reform expertise within government, although states with less internal capacity relied proportionately more on consultants.

Central agency staff may not be familiar with the underlying claims of performance management doctrine, but they are familiar with popular representations of these claims that propose reinventing government by making it more focused on achieving results and enhanced flexibility. 1)Public Services Department ( PSD ) The Public Service Department in the State Chancellery has responsibility for coordinating civil services human resources management. Because politicians and civil servants have been reluctant to return to anything resembling the strong centralist control of the Soviet era, central coordination is markedly weak.

In real terms the activities of the PSD includes collection of data from ministries to provide reports to cabinet on employment and human resources issues, development of some human resources policies, such as attestation policy and procedures, and development of the national training strategy and coordination of civil service training. The PSD reports to the state chancellor and consists of six staff who are well educated but lack exposure to modern civil service human resources management.

The performance of the civil service could be enhanced by giving the PSD the mandate to develop all civil service human resources issues, including pay and grading, which has recently been allocated to the Ministry of Finance. Such an arrangement would still require close coordination and consultation with the Ministry of Finance (in terms of affordability), the Ministry of Justice (in terms of legality). And other ministries (in terms of impact). Given the current institutional debates on the formation of a unit to develop and coordinate the wider administrative reform program, it is advisable that the PSD belong to this larger unit.

Given the additional mandate of human resources management, the PSD will need strong support from the prime minister and state secretary in order to overcome the widespread suspicion of central control and the interests of order stakeholders such as the Ministry of Finance. The PSD will also require additional resources and exposure of its staff to best international practice. Similarly, ministry personnel departments will need to be strengthened to undertake the full range of functions prescribed in law.

Currently each ministry has about 3 personnel practitioners per 150 staff, including one training officer and the departmental manager. Although this staffs are trained in basic human resources management they will need to develop more advanced skills. The relationship between the PSD and ministry personnel departments is currently good, with the latter being consulted on relevant policy issues. However, there is no regular personnel management forum, and this should be established as a matter of urgency to begin the process of standardization.

In summary, the Public Service Department should increase its mandate to be responsible for the development and coordination of all civil service human resources policy, with necessary consultation and coordination with the Ministry of Finance over wage bill and budget issue. The PSD and ministry personnel management departments should set up a regular (no less than quarterly) forum, chaired by the head of the PSD to discuss personnel policies, establish good practice, and ensure consistency in practice.

The government should also mandate the formal periodic inspection and monitoring of civil service employers to ensure compliance with the PSL, this function could be undertaken by the PSD, the State Audit Office, or the Labor Inspectorate. The government should be also identify the resources and technical assistance requirements for expanding the mandate of the PSD, and the name of the unit could be change to the Civil Service Department (CSD) to reflect its actual scope of authority. The expanded PSD should form part of the proposed Administration Reform Unit to ensure necessary linkage with related policy development. )Economic Planning Unit (EPU) The Economic Planning Unit is the principle government agency responsible for the preparation of development plans for the nation. The unit was established in 1961 as the Economic Secretariat of the Economic Committee under the Executive Council of the then Federation of Malaysia. Its objective then was to focus on development planning, on major problems in plan execution and all forms of foreign aid. Since its establishment, EPU functions have remained primarily unchanged although it taken on additional functions in consonance with the changing emphasis of development policy.

The objective of the Economic Planning Unit is comprehensive planning through formulation effective policy, development program through outcome based approach, maximize the usage of finance resources through effective distribution of allocation and strengthen human capital towards elevate efficiency and professionalism and establish organisation capacity to effective services delivery. Its specific function is the following:- a)To formulate policies and strategies for socio economic development, example, both long term and medium term plans. b)To appraise, evaluate and recommend development programmes and projects. )To undertake economic research and offer advice to the government on economic issues. d)To planning for regional and corridor development. e)To act as the Secretariat to the National Economic Council (NEC) 3)Implementation Coordination Unit (ICU) ICU is responsible for the coordination and implementation of various governmental programs and policies, such as the Look East Policy, Privatization, Malaysia Incorporated Policy, and New Economic Policy (NEP). It is the “implementer” for Majlis Tindakan Negara (MTN) and responsible to operate Bilik Gerakan Negara.

The main task of ICU was to ensure that the delivery system of policy, programs and projects were carried out effectively so that the public can enjoy the benefits in order to achieve the objectives of national development. ICU remains its role as secretariat. On March 15th 2005, the cabinet decided that ICU will lead in implementing outcome monitoring programmed which emphasize on the output and impact of projects carried out by government agencies i. e. Federal, State and Statutory Bodies. ICU was entrusted to execute some major projects for the country’s development.

ICU broader such as Tunas Mekar, and One District One Country (SDSI). Besides that ICU has been entrusted to execute some basic infrastructure project (PIA), public infrastructure maintenance project (PIAS) and Rural Industry Project. In 2007, ICU is accountable to be the main coordinator for People Welfare Program previously known as Poverty Eradication Program. Its specific function is the following:- 1. To coordinate, monitor and evaluate the implementation and outcome Programme / Project Malaysia Five-Year Development Plan (RMLT). 2. Manage, implementation and monitoring the allocation of Prime Minister Program / Special Projects. 3.

To coordinate, monitor and evaluate programs / projects for People’s Welfare. 4. Coordinate, implement, monitor and evaluate Project Infrastructure Maintenance and Maintenance of Public Infrastructure Projects under the provisions of the Ministry of Finance. 5. Coordinate and monitor the effectiveness of policies and strategies for One Village One Product program. 6. Became the secretariat for the coordination of the implementation machinery under Directive No. 1, 2010 and main government meetings. 7. Coordinate and monitor the effectiveness of policies and strategies of the Federal Statutory Bodies (MDS) based on circular-related papers. . Coordinate and monitor the effectiveness of policies and strategies Restructuring Society of Penang Bumiputera Participation and the Penang Regional Development Authority (PERDA). 4)Malaysian Administrative Modernisation and Management Planning Unit (MAMPU) MAMPU was known as the Malaysian Administrative Modernisation and Management Planning Unit (MAMPU). MAMPU was established based on a study on “Development Administrative in Malaysia” conducted by Prof. John D. Montgomery and Milton J. Esman. The report acknowledged the need to upgrade professionalism of all civil servants through educational and training programmes.

As the central agency for the modernisation of Public Service Administration and transformation of the delivery system, MAMPU carries out (4) main function:- 1) The driving force for change in the administration and management of the Public Service To introduce and promote new initiative in the administration and management of the Public Service, as well as evaluate and award Government agencies for their performance in the Public Service delivery system of the country, towards achieving an efficient, effective and responsive Civil Service. ) Planning and promoting the development of communication and information technology (ICT) in the Public Sector. To plan, devise, coordinate and assess the implementation of ICT development in the Public Sector towards strengthening the service delivery of the Government. 3) Consulting in the organisational management of communication and information technology ( ICT ) for Public Sector To provide consultation services to ensure the structure, system, work procedures and implementation of ICT development are in line with efforts to improve the Government’s delivery system. ) Facilitator for the transformation and modernisation of the Public Sector To synergise knowledge, expertise and resources (from public, private and NGOs) towards enhancing the modernisation and transformation of the Public Sector. 5)Socio Economic Research Unit (SERU) 1 JANUARI 1986, Socio Economic Research Unit of General Planning (SERGPU) and Centre for Development Studies Malaysia (MCDS) were combined became a unit under PMD. The new name for the unit is Socio Economic Research Unit or the Socio Economic Unit (SERU) and placed under the Ministry of Non-portfolio.

Public Complaints Bureau (BPA), formerly under the administration of Socio Economic Research Unit and the General Plan (SERGPU) was transferred to the PMO under the responsibility of the Deputy Chief Secretary. Petroleum Development Division was transferred from the field of administration of the Socio Economic Research Unit and the General Plan (SERGPU) to the Implementation Coordination Unit under the responsibility of the Deputy Secretary General.

Work on controlling floods that carried out by Unit Socio Economic Research and Planning General (SERGPU) as receives reports and makes recommendations to the Ministry / Department concerned about the flood moved to the Ministry of Agriculture under the responsibility of the Department of Drainage and Irrigation. Matters relating to the squatters are under the responsibility of the Implementation Coordination Unit.

The determination of the Committee of Socio-Economic Studies (JPPS) was established to assist the Socio Economic Research Unit (SERU) in a priority list of research topics socio economic study to be conducted. Functions of the Federal Treasury (i) To formulate and implement fiscal and monetary policies in order to ensure effective and efficient distribution and management of financial resources; (ii) To formulate financial management and accounting processes, rocedures and standards to be implemented by all government agencies; (iii) To manage the acquisition and disbursement of Federal government loans from domestic and external sources; (iv) To monitor and ensure the effective management of the Minister of Finance Incorporated companies; (v) To monitor the financial management of Ministries, Government Departments and Statutory bodies; (vi) To formulate and administer policies related to the management of Government procurement and asset management; and (vii) To formulate policies and administer Government housing loans for civil servants.


The setting up of a statutory body is governed by laws. Statutory bodies are established with the objective of implementing certain duties and responsibilities in line with the national objectives. Corporations are set up to take over the duties and responsibilities of certain government departments. The advantages of setting up corporations are to enable benefits derived from the government to be integrated with the benefits from the private sector.

Every public corporation has officers of its own to manage it. The chief administer of a public corporation is called the General Manager, who is responsible for management and administration in accordance with the corporation objectives. To ensure a smooth administration a corporation has certain divisions assigned with special tasks. Every corporation has board of directors. In the case of statutory bodies, their board of directors are appointed by the minister responsible for its establishment. Definition of Statutory Body

Herbert Morrison “In Statutory Body, we are seeking a combination of public ownership, public accountability and business management for public ends. ” Non statutory Bodies Non statutory bodies are established in accordance with Company Limited Act. Unlike statutory bodies, they are not subjected to government control and are free to have schemes of services of their own for their staff. Nevertheless their activities must be in line with provisions under laws or acts under which it was established.


Statutory body is a body corporate created by a special Act of Parliament, describing its powers, responsibilities, right and duties. It is owned by the Government but managed like private enterprise. It is a unique combination of public interest and flexibility in operation. The capital of a corporation is wholly subscribed to by the Government and it is answerable to the Government which creates it. It is managed by a Board of Directors appointed by public authority to which it is answerable. The law relating to companies is found in the Companies Act 1965.

The Act provides for the formation of Malaysia companies and the registration of foreign companies operating in Malaysia. It also regulates fund raising activities, company management, the reorganization, winding up and liquidation of companies. These are also other sources of law relating to corporations such as case law. This is because Malaysia has a common law system in which recorded decisions of the judges operate as binding statements. Under the common law system, if a decision is made by a higher court, then courts that are lower in the court structure are obliged to follow the decision of the superior courts.

For example of statutory bodies in Malaysia is Lembaga Kemajuan Pertanian Muda, Bank Simpanan Nasional, Dewan Bahasa & Pustaka, Kumpulan Wang Simpanan Pekerja (KWSP), Lembaga Getah Malaysia, Lembaga Hasil Dalam Negeri Malaysia (LHDN), Lembaga Kemajuan Ikan Malaysia, Lembaga Kemajuan Perindustrian Malaysia (MIDA), and Lembaga Kemajuan Tanah Persekutuan (FELDA). 1)Owned by the State In most of the cases, the corporation is wholly owned by the State. Its capital is wholly subscribed to by the Government though it is not an essential feature.

For the example, in Lembaga Kemajuan Pertanian Muda, the corporation is owned by government and all capital for the pertanian project was from the government. 2)Created by a Special Law Such a law lays down the form of management its functions powers privileges and its relationship with the government. The Act of Parliament provides its framework within which and the way in which the statutory corporation operates. For the example, the system for business taxation at Lembaga Hasil Dalam Negeri follow by the government procedures. 3)A Body Corporate

It can sue and be sued, enter into contracts and acquire property in its own name. For the example, if have the problem between customer and the corporation about the withdrawn the money at the Bank Simpanan Nasional, the customer can be sued Bank Simpanan Nasional. 4)Independent in Its Finance A statutory body can borrow funds either from the government another statutory body or from the public if authorised by the Act. It can raise revenue from the sale of goods and services produced by it. It can approach the Government either for additional funds or to meet the deficit.

For the example, the Lembaga Ikan Malaysia can borrow the funds from the another government statutory bodies or by the government to use for the equipment and requirement for the fisherman activities. 5)Not Subject to Accounting Budget and Audit Laws This is applicable to the Government departments. In India, this law has been modified to the extent that in most of the corporations their accounts are to be audited by the Comptroller and Auditor General and in all cases capital expenditure beyond prescribed limits needs government approval. For the example 6)Immune from Parliamentary Enquiry

In its day to day working government will not interfere in its routine business matters. This matter has been recognised in Indian statutes in two ways. Firstly, the corporation will be guide by the directions of the government in matters of policy involving public interest. Secondly, it shall act, as far as may be on business principles. Thus policy matters and day to day matters have been distinguished. For the example 7)Own Personnel Policies The employees of statutory body are not civil servants. Therefore they are not governed by regulations applicable to civil servants in respect of their conditions of service.

They can frame their personnel policies subject to approval of the Government. For the example 8)Service Motto A statutory body is formed primarily for offering public service and promoting public welfare. It does not aim to earn or maximise profits but to general public. Pricing policy is based on breakeven point over a period of years. For the example 9)Freedom from Financial and Others Controls The statutory body is free from financial, accounting and audit control. It manages its own funds subject to provisions given in the Act. It obtains and uses its own revenues according to the principles of business expediency.

For the example 10)Free from Other Statutory Controls. Statutory body enjoys complete freedom from rigid and unsuitable controls applicable to government departments. It frames its own policies relating to contracts, purchases, sales and personnel. It can follow best business practices. Statutory provisions of the Companies Act do not apply to statutory body. For the example 11)Accountability to Parliament The Statutory body is accountable to Parliament. Therefore, its functions are subject to Legislatures’ scrutiny. It ensures that it works for genuine public interest rather than for the maximisation profits. Mr.

Herbert Morrison rightly observed that it is a combination of public accountability and business management for public ends. For the example 12)Control with Autonomy As a statutory body is subject to Parliament’s scrutiny, it functions with caution. The Government does not interface in its day to day working. However, policy matters relating to public interest are taken up in Parliament. Thus they enjoy benefits of public control and autonomy as well. As President Roosevelt observed “While these undertakings had to be clothed with the power of government, they also had to possess the operating flexibility of private enterprise. For the example 13)Expert’s services The Board of Directors of a statutory body consists of experts from different fields. Thus the corporation enjoys the services of skilled, business and technical personnel commanding confidence. It is a form of management combining what is best in management with what is best in public service. For the example 14. Quick Decision Making Power The success of private enterprise lies in its power to take quick decisions on important matters. Statutory body enjoys this power not only in routine matters but also in even important policy matters. For the example 15. Efficient Personnel

As the managers and employee of the corporation are not civil servants they are not governed by the rules applicable in government departments. Every statutory body has its own personnel policies. Selections, promotions etc. are


Non statutory body means any company in which not less than 51% of the paid up share capital is held by the Central Government or by any State Government or government or partly by Central Government and partly by one or more of the State Government and includes a company which is a subsidiary of a government company as thus defined.

A non statutory body, regardless of its type, comes into existence when the formal incorporation process and procedure have been complied with. Once the incorporation process has been complied, the company will be issued with a certificate of incorporation. The incorporation process for a non statutory body does not differ significantly from the incorporation of a private company. A company may be originally incorporated as a non statutory body. For the example a non statutory bodies in Malaysia is Petronas, MAS, TNB, Proton, Khazanah Malaysia, MISC and others. 1.

Private Limited Company It has most of the features of a private Limited Company. For the example 2. Governmental Control The Central Government or the State Government holds at least 51% of the paid up share capital of the company either singly or jointly with other State Government or government. The chief officer of the department under whose executive authority it works exercises all the rights of a shareholder on behalf of the company. For the example 3. Legal Status As it is a body corporate incorporated under the Companions Act and therefore may sue or be sued in its own name.

It has separate legal entity with a perpetual succession and common seal. For the example 4. No charter It is created by an executive decision without a specific charter of its own as approved by the Parliament. Its objectives and internal management are governed by its Memorandum and the Articles of Association. For the example 5. Board of Directors The Government nominates the majority of the directors on the Board of Directors of the company either in proportion to its equity holding or by a special agreement to that effect with the outside shareholders. For the example 6.

Funds Its funds are obtained from the government, if it is fully owned and also from private shareholders if it is not wholly owned and through revenue derived from sale of its goods and services. For the example 7. No Civil Servants Its employees are not civil servants. Its personnel policies are regulated by its Articles of Association. For the example 8. Exemptions It is exempted from the personnel, budget accounting and audit laws and procedures applicable to government departments. Sec 619 of the Companies Act contemplates that the auditor of a statutory body.


Statutory bodies in India The statutory body form of public enterprise is of recent origin. In India before independence, only the Reserve Bank of India was in this form. Since independence, a number of statutory body were established namely, The Industrial Finance Corporation, The Industrial Development Bank of India, The State Bank of India, the Life Insurance Corporation, The Employee State Insurance Corporation, The Central Warehousing Corporation etc.

In India, statutory body are set up by special Act of Parliament whether they are promoted by Central or State Government. This form of organisations for public units was recommended by the study group of the Administrative Reforms Commision. It called as the best form for industrial and manufacturing concerns expert when an element of private participation is desirable. This form seems to be more desirable for public utilities.

In India corporations were also given preferences in promotional and developmental undertakings like the Indian Oil Corporation, The Oil and Natural Gas Commission, Central Warehousing Corporation, The Life Insurance Corporation and other financial corporations. However, the government favoured the form of public limited companies for the State units because of flexibility in operation. CONCLUSION Central agencies are agencies that are involved in formulating public policies, coordinating, controlling and monitoring the various activities, programmes and projects carried out by all government agencies.

Examples of Central agencies in Malaysia are The Economic Planning Unit (EPU), Institute Coordination Unit (ICU), The Malaysian Administrative Modernisation and Management Planning Unit (MAMPU) and The Public Service Department (PSD). Statutory bodies are established by a statute (Act of Government). They are set up for achieving certain objectives of the government. They are also known as public corporations. They are wholly owned by the state. They are created under Federal or state law for a particular business, commercial or financial purpose.

They are under the control of the relevant Ministries. The non statutory body means any company registered under the Companies Act in which the Central Government or State Government hold majority equity participation singly or jointly with other State Government or governments. The statutory bodies and non statutory body have many different. For the example can be differ from the aspect its finance, management, personnel policies, decision making power, service motto, status of staff and legal status and government control.

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Public Service Department in Malaysia. (2016, Dec 10). Retrieved from

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