Auditor-General's Office report

AGO report: From lax enforcement to overpayment

The National Arts Council paid a $410,000 consultancy fee to construct a bin centre at the Victoria Theatre and Victoria Concert Hall, an "exceptionally high" fee, said the AGO. The AGO found that motorists have been getting away with not paying for
The AGO found that motorists have been getting away with not paying for parking at HDB carparks. This was possible because HDB neither adequately monitored carparks nor enforced payments.ST PHOTO: KEVIN LIM
The National Arts Council paid a $410,000 consultancy fee to construct a bin centre at the Victoria Theatre and Victoria Concert Hall, an "exceptionally high" fee, said the AGO. The AGO found that motorists have been getting away with not paying for
The National Arts Council paid a $410,000 consultancy fee to construct a bin centre at the Victoria Theatre and Victoria Concert Hall, an "exceptionally high" fee, said the AGO.ST PHOTO: KEVIN LIM

AGO report lists four areas of concern, including weak governance over funds and lapses in managing contracts

From unearthing unused phone lines to finding volunteers who were overpaid, the Auditor- General's Office (AGO) left no stone unturned in its annual audit of 16 ministries, 11 statutory boards and several government funds.

The report released yesterday highlighted four areas of concern: inadequate financial controls that could result in the loss of revenue, weak governance over public funds, a lack of oversight in how schemes are administered, and lapses in managing contracts.

One area of weak financial controls flagged by the AGO was a lack of oversight by the Housing Board over carparks that were outsourced to commercial operators.

There was a loss of revenue because no action was taken against those who avoided paying carpark charges, such as by manipulating the carpark system, the AGO noted.

The AGO also observed that the Land Transport Authority (LTA) could have lost out on $13.93 million by undercollecting toll charges at the Woodlands and Tuas checkpoints in financial year 2014/15. This was a fifth, or 21.9 per cent, of LTA's total toll collection that year.

 
 
 
 

LTA has since said there was a need to review the controls and enforce revenue collection at the checkpoints, and is working to address these gaps, including imposing stiffer penalties.

These are some of the weaknesses the AGO found at several agencies.

1. HDB: Failed to act against errant motorists at carparks

Motorists have been getting away with not paying for parking at HDB carparks, such as by tailgating another vehicle at the gantry. This was possible because HDB neither adequately monitored carparks nor enforced payments.

The AGO's spot checks on residential carparks found 2,501 instances between April and September last year when vehicles exited Electronic Parking System carparks without paying, for more than three times in a month. HDB received monthly reports but did not take action against the motorists.

HDB has since begun analysing carpark operator reports, and started work on amending the law to act against parking charge evaders. It has also made police reports against motorists who evaded parking charges in industrial carparks.

2. Mindef: Invested funds without proper approval

The Ministry of Defence (Mindef) invested $50.26 million from its Savings and Employee Retirement (Saver)-Premium Fund in a United States real estate investment trust exchange-traded fund - without the approval of its board of trustees.

Mindef also made the investment through an investment manager without first getting approval from the board to appoint the manager.

The AGO found the evaluation carried out for the investment was inadequate. The department responsible did not give complete information on the investment costs when seeking the relevant director's approval.

Mindef is reviewing its processes.

3. MFA: Paid for unused phone lines

The Ministry of Foreign Affairs (MFA) subscribed to 28 mobile phone lines after they were no longer needed, resulting in $80,744 of public funds being wasted.

Eleven of these lines were not used for more than two years. For the 17 remaining lines, the officers who were assigned those lines had left MFA or been given other lines three months to three years earlier.

The AGO also found overpayments of phone bills totalling $109,868.

MFA has since terminated the 28 unused lines. It plans to put in place a process to terminate or reassign lines when officers leave MFA, and has reminded its officers to verify their bills against their contracts.

4. SPF: Overpaid volunteer cops

Volunteer police officers were paid bigger allowances than they should have received from April 2008 to December last year.

Since early 2008, the allowance rate for part-time officers under the Volunteer Special Constabulary was raised to $3.60 an hour, 80 cents above the rate stipulated by law.

The deputy commissioner of police and permanent secretary for home affairs approved the hike despite not being authorised to do so.

Police also paid allowances for duties lasting beyond four hours, and pro-rated allowances for duties under an hour, which was not allowed. All this resulted in $2.63 million worth of overpayments in total.

The Singapore Police Force has begun work to amend its regulations.

5. MinLaw: Handled assets from nursing homes poorly

The assets left behind by people who died in nursing homes may not have been properly recorded or handled. The Public Trustee's Office did not have adequate controls over the handling or proper recording of such assets, the AGO found from checks on 14 cases. This lack of proper controls increased the risk that valuable assets could be misappropriated, said the AGO.

Assets were also either omitted from the records or incorrectly recorded in four cases. Identities of the recording officers were left out.

Changes have since been made.

6. MOM: Unused computer system

The Manpower Ministry bought a $432,407 computer system that turned out to be incompatible with its current system.

The new system was meant to be integrated with MOM's Foreign Domestic Worker system. But the ministry did not carry out a robust evaluation of whether the two would be compatible before procurement.

MOM then decided not to use the new computer system as modifying it would cost too much. It has been unused since November 2014.

The AGO pointed out that some of the hardware assets and database licences could have been redeployed elsewhere in the ministry. MOM said it is exploring doing so.

7. NAC: Overpaid for bin centre

The National Arts Council (NAC) paid an exceptionally high consultancy fee to construct a bin centre in Victoria Theatre and Victoria Concert Hall. NAC paid a $410,000 consultancy fee for the bin centre - 87.2 per cent of the bin centre's $470,000 construction cost.

The AGO said the consultancy fee was "exceptionally high", and NAC did not conduct a cost assessment to ensure it was reasonable.

When approval was sought to draw down the funds, the parent ministry - then the Ministry of Information, Communications and the Arts - did not use the normal method (a percentage of the construction cost), but benchmarked the fee for building the bin centre against other more complex projects.

NAC now comes under the Ministry of Culture, Community and Youth (MCCY), which told the AGO the fee was high as "the construction of the bin centre for this project was more complex and required significantly more design expertise, technical consultancy services and effort to coordinate with multiple parties".

MCCY said it would adopt the normal method to assess consultancy fees in future development projects.

A version of this article appeared in the print edition of The Straits Times on July 27, 2016, with the headline 'From lax enforcement to overpayment'. Print Edition | Subscribe