The declassified auditor-general's report on 1MDB lacks several key details due to the wealth fund's refusal to provide complete documentation, but for parts which it did investigate, the information corroborates with that of the US Department of Justice.
The Audit Department had, among others, examined Brazen Sky Ltd's accounts, which is a subsidiary of 1MDB.
More specifically, the department looked at Brazen Sky's redemption of "fund units" from its Cayman Islands investment with Bridge Partners International Investment Ltd.
Interestingly, the department noticed that the redemption into Brazen Sky's accounts – done in stages from Sept 11, 2014 to Sept 8, 2014 – were immediately sent out to another 1MDB offshore subsidiary, 1MDB Global Investments Ltd (1MDB GIL).
In total, US$1.392 billion was redeemed into Brazen Sky's accounts, and US$1.417 billion sent out to 1MDB GIL.
"The cash redemption from the segregated portfolio company (Bridge Partners) was found to have not complied with the 1MDB board of directors' instruction for it to be returned to Malaysia.
"The cash transfers were not presented before the 1MDB board of directors for approval.
"The justification for the 1MDB management to transfer the money to 1MDB GIL could not be established, as 1MDB GIL too had its own fund to manage totalling US$1.56 billion as of March 31, 2014," it said.
However, a more complete picture could be found based on the DOJ's filings, which established that the money was sent to 1MDB GIL to be recycled back into Brazen Sky, to make it appear like redemptions.
The DOJ's figures of the recycled transactions also matched that of the auditor general's report on 1MDB.
According to the DOJ, the "redemption" of the "fund units" originated from a US$975 million loan 1MDB took out with Deutsche Bank.
The DOJ's court filing stated that part of that money was "recycled" by sending it to Brazen Sky Ltd through intermediaries, then sent out again through the same intermediaries before returning to the 1MDB subsidiary.
One of these intermediaries was 1MDB GIL.
"The purpose of this unnecessarily complicated funds flow was to create the appearance that fund units in the Brazen Sky Account were being redeemed for cash and being paid forward to 1MDB, thereby fraudulently disguising the fact that the fund units were illiquid and relatively worthless," the DOJ said in its filing.
The web of transactions is too complicated to be listed here, but is available on, 'Stolen' 1MDB Funds': The DOJ Lawsuit Revisited, under the 'Options Buyback Phase'.
Before the general election, 1MDB CEO Arul Kanda Kandasamy, who had refused to go on record on the purpose of the US$975 million Deutsche Bank loan.
He also insisted that the remainder of Brazen Sky's US$940 million "fund units" with Bridge Partners had value.
However, with the 1MDB audit report corroborating DOJ’s filings, it remains to be seen if these "fund units" are, as the DOJ claims, "relatively worthless."