Why It Matters

Deter abuse of public schemes

No public incentive scheme is fraud proof, as evident when news broke on Dec 19 of SkillsFuture Singapore (SSG) being cheated of $40 million in the biggest case of a government agency being defrauded.

That same day, the taxman, in an unrelated move, disclosed to The Straits Times that more than 1,000 employers tried to fleece the Wage Credit Scheme of $5.57 million with ruses such as hiring phantom workers or inflating wages. This emerged from audits of several thousand employers suspected of making dodgy claims.

Both SkillsFuture and the Inland Revenue Authority of Singapore were quick to attest that immediate action was taken to tighten their processes and step up enforcement.

Still, observers question how, in SkillsFuture's case, the bogus claims could have gone undetected for several months until last October, when the majority of such claims were made and SSG detected the fraud. SSG immediately suspended all payments to the entities in the criminal syndicate and made a police report.

Singapore Management University law don Eugene Tan believes "the hurry to get the programmes off the ground may have contributed to a poor system of financial controls and accountability". He also pointed to "pressure to disburse as much funds as possible in every financial year as an indicator of how useful or how successful a particular scheme is".

Professor Tan added: "Annual external audits must be instituted given the amount of funds concerned."

While the recent spate of abuse of government incentive schemes has raised concerns over how these are run, it would be a shame if the programmes are made so cumbersome that legitimate applicants are discouraged from applying.

 

Notwithstanding that, the authorities have to make it tougher for the crooks trying to game the system and impose more severe penalties, including making prison time mandatory, to deter abuse.

A version of this article appeared in the print edition of The Straits Times on January 04, 2018, with the headline 'Deter abuse of public schemes'. Print Edition | Subscribe