The Importance of “Prudent Spending” to Brunei

If one were to go and ask most administrative officers or finance officers about how to spend the money that we/our departments/ministries have been allocated by the government, most, if not all, would tell us that we must spend the money “prudently”. Quite often, during the tendering process, open quotations, etc, each and every evaluating officer will emphasise on "prudent spending".

So what is "prudent spending" exactly, and do we truly understand its concept?

First, let's get down to basics. The British meaning of what is "prudent" and what is "spending" has several meanings, depending on context. Being "prudent" can mean being careful, cautious, sensible, practical, wise, far-sighted, etc. Whereas "Spending" means to pay money, devote time or effort, pass time, and use something up. If one were to combine these words "prudent" and "spending" together, to become "prudent spending", in the context of using allocated funds, one may then understand that it means “a careful, cautious, sensible, practical, wise and far sighted spending”. The meaning is therefore very clear-cut and quite simple for everyone to understand.

Now, let's do a reality check…

Let's analyse what is considered as the 'normal practice' among evaluating officers in Brunei Darussalam. I'd have to warn you people out there that what has always been 'done' as normal practice does not necessarily follow the same thing as what is supposed to be in our Financial Regulations.

For example, generally, if we 'open our tender' for goods and services, this means we are inviting several bidders to bid for the goods and services together according to the given Specifications. This tendering selection process selects bidders who fulfills the basic Specifications. In the final selection process, evaluators usually will look at the “prices” offered by the bidders and grant the bidder who offers the lowest prices” as the winning bidder.

Now, i wonder, is this method of selection process which is according to the 'normal practice' really considered "prudent"? Many will say it is just because we pay less, thus 'save money for the government' and get the products we want within the Specifications. Well, perhaps we should think twice and look at it again...

From what I have always observed, it is always the 95%-at-confidence-level bidder who offers the lowest price tag who will most definitely be allowed to supply the tendered goods or services. Yet, i've seen evidence that these winning bidders, despite having fulfilled the Specifications, will, more often than not, supply us with lower quality products, which are easily worn out and therefore less durable. It is obviously not enough to merely look at their papers without doing a more thorough check of the products to really see their quality. Empirical evidence can be seen from government projects that were won by selected bidders who had used cheap products in the building projects, etc (I can't reveal which projects they are but they're out there). Some people will disagree but i invite you, please go and check the quality of the paint, tiles and toilets in some government agencies or departments…I think the people who work in the construction industry would know this is true.

My understanding of prudent spending is basically in one malay peribahasa which is “alah membeli menang memakai”, which literally means that although you have spent huge amounts of money on something, it is still worth buying. From my observations, many of the goods and services which come under the meaning of "prudent" as practiced by administrative officers and financial officers, do not last very long. In fact, if we take into consideration that the slightly higher price with higher quality will last much longer compared to the products with the lowest price and lower quality, we will come to the conclusion that it is more cost effective to go for the more expensive product in the long run. Thinking more deeply on the matter, at first glance we might think that we are saving or spending wisely as what the government wants us to do. Yet, it turns out that it was more "membazir” i.e. more money was spent, instead, because we had chosen the cheaper and lower quality products that ends up easily broken. Combine the cost of the products with the cost of replacing or repairing them once they become damaged, and the total cost of the products significantly increases higher compared to the total cost of the higher quality products that had, before, seemed like an unecessary expense.

The issue of "membazir" is also highlighted in the Quran in which Allah s.w.t states that those whom are given to wasting money are friends of Satan and Satan disobeys the Creator.

So to sum up…
Our understanding of what is considered as "prudent spending" needs to be in-line with what it truly means within its proper context and not necessarily according to "what is normally practiced by others". We adhere to our Financial Regulations which advocates to "berjimat cermat" i.e spend wisely. So, by "berjimat cermat", we must learn to spend wisely by being more far-sighted in our views, meaning, that eventhough the price of a product may seem slightly higher initially, in the long-run, it will be more cost effective and will save us more money, comparatively.

It is therefore very important and necessary for evaluators to obtain a much more vast knowledge of whatever they evaluate…so that they may come to a good and ethical decision.

As a rule of thumb, remember..

Allah s.w.t will ask us on the day of judgement, have we truly done what He had ordained us to do, did we make the proper ethical decisions and judgements in our lives, both socially or in our work environments, have we done our jobs the way the government pays us to do…

As they say, the devils are in the niggly little details..so be careful with your decisions in life because they will catch up with you in the end.