Non-government bodies that get funds to disburse or run services can expect government auditors to come knocking on their doors.

Parliament yesterday approved changes to the Audit Act that grant the Auditor-General powers to audit how these non-government bodies spend public funds.

"This is to ensure that public funds are used for the purposes for which they are intended and to enable accountability of public spending," Senior Minister of State for Finance Indranee Rajah said. Examples include voluntary welfare organisations distributing aid to needy families and autonomous universities giving student bursaries.

The work of the Government has expanded, and such funds that are disbursed through non-government bodies amount to "several billions of dollars" each year, making the new powers necessary, Ms Indranee said.

The new powers will allow the Auditor-General to conduct "follow-the-dollar" audits to trace where the public monies go, she added. This approach is "not unique" and already used by several national audit agencies overseas such as those in Australia and New Zealand.

However, Ms Indranee assured members that such sweeping powers will be used lightly.

"The threshold for triggering such audits is high, it can only be directed by the Minister for Finance and only if he is satisfied that it is in the public interest to do so," she said. "The audits will also only be limited to whether the funding terms and conditions have been complied with."

Two MPs spoke on the new law.

Mr Liang Eng Hwa (Holland-Bukit Timah GRC) said it was welcome because when non-government bodies disburse funds that are "further away from the direct view of government audit, the risk of improper or corrupt conduct would increase". But he was concerned the move would add to compliance costs.

Responding, Ms Indranee said the new law will not add to the regulatory burdens of these bodies because it will be used only sparingly.

Mr Louis Ng (Nee Soon GRC) asked how a new section of the law that requires individuals to give information to the Auditor-General - even if it incriminates him or her - would be applied.

Ms Indranee, who is also Senior Minister of State for Law, said a person currently cannot cite self-incrimination as a reason to refuse to give documents or information to the Auditor-General under the law. Stating this clearly can "avoid time-consuming negotiations" that will diminish the efficiency of the audit process, she added.