The Ministry of Education (MOE) did not do enough to ensure that foreign students who received scholarships but failed to serve their bonds were reminded of their obligations and paid up liquidated damages, the Auditor- General's Office (AGO) said.
These students had studied at the National University of Singapore (NUS) and Nanyang Technological University (NTU).
In its report, released yesterday, the AGO flagged lapses in monitoring and enforcement of these bonds for the scheme, which disbursed $36.52 million in financial year 2014/2015.
When the AGO checked on 30 cases of scholarship winners who were not serving their required bonds, it found 14 cases where the universities did not send letters to remind them of their obligations, or impose liquidated damages in cases that warranted it.
At the time of audit, the letters were between one and 22 months late. In two other cases, the letters were sent after a lag of 17 and 26 months.
The AGO noted that the Ministry of Education could have done more, given that the universities submit yearly reports on the bond status of its scholarship winners.
"MOE could have followed up with the universities on cases where actions had not been taken," it said.
The AGO also found that the MOE had over-contributed $4.14 million over nine years to NTU's sinking fund, and disbursed research grants of $2.96 million to NTU and NUS without carrying out reviews to ensure projects were progressing according to its guidelines.
Education Ministry's response
The MOE said most of the bond-breaking cases flagged were from earlier graduating batches, and it has tightened and enhanced monitoring and enforcement of scholarship bonds in the last few years.
Measures include informing scholarship winners of their obligations at the start of their freshman year and reminding them again in their final year, and recovering liquidated damages with interest from those who intentionally default - failing which, they will not be allowed to work or live here.
MOE also works with agencies such as the Central Provident Fund Board and the Ministry of Manpower to track the bond service records of graduates closely.
With enhanced measures in place, default rates "have come down significantly" and 95 per cent of international scholarship recipients are meeting their bond obligations or have applied for deferment.
MOE also stressed that most of its foreign scholarship recipients take their bond obligations seriously. "Scholarships are also given out in the spirit of international cooperation, recognising that many Singaporeans have previously benefited from similar scholarships, such as the Colombo Plan scholarships offered by Australia, Canada, New Zealand and the UK," it said.
"MOE's enhanced processes are a signal that our willingness to welcome international students must be matched by their sincerity to honour their word." MOE has recovered the excess money disbursed to NTU. It is also taking steps to keep up with the growing volume of research projects it has to monitor.