KUALA LUMPUR, July 6 — The International Islamic University Malaysia (IIUM) has today denied it is unable to repay its debts, as detailed in the Auditor-General’s Report 2/2024 that was published on Thursday.

In a statement today, IIUM said that as a public university, it is not allowed to take loans from any financial institution for operational expenses and called the findings "inaccurate and misleading”.

"IIUM wishes to confirm that no debt-related loans have ever been taken,” the statement read.

In the same statement, the university said that its financial statements, as audited by KPMG Malaysia, received a clean bill of health for three consecutive years from 2021 to 2023.

"As of December 31, 2022, IIUM’s financial position showed an accumulated deficit of RM17.06 million. This was due to substantial provisions made for the retirement benefit plan for IIUM staff who are due for mandatory retirement, in line with the requirements of the Malaysian Financial Reporting Standards (MFRS).

"In the fiscal year ending 2022, a total of RM308.59 million was recorded as the overall commitment for this retirement benefit plan,” the statement read.

IIUM said initially, the management had intended not to rely on special government grants and to use the university’s internal resources for the mandatory retirement service benefits.

However, inflation, incremental salary increases since 2012, and an ageing workforce meant internal resources could no longer cover these expenses, it added.

Therefore, the university submitted a working paper to the Ministry of Finance requesting additional annual allocations.

"IIUM expects to spend an average of RM24 million starting from the fiscal year 2024, and this amount is expected to increase in line with the prime minister’s early announcement on efforts to improve the new public service salary structure, which will be implemented at the end of 2024,” the statement read.

In her report, Auditor-General Datuk Wan Suraya Wan Mohd Radzi said that IIUM’s overall financial position was "less stable”, as it had recorded an accumulated deficit of RM17.06 million as of December 31, 2022.

The report also said that IIUM was unable to repay current and long-term debts as it relied on government grants for the period of 2020 to 2022 despite recording surpluses for three years in a row.