Lapses in public grants and schemes flagged by Auditor-General

SINGAPORE - Some government grants have not been administered properly, raising concerns over whether public funds were used appropriately, said the Auditor-General's latest annual report.

This was one of five areas in which slip-ups in the use and management of public resources were flagged.

The others were: the commitment of public funds, administration of schemes, management of land and assets, and procurement.

The report, which showed the findings of audits conducted for the 2013 to 2014 financial year, was released on Thursday.

In its reports in recent years, the Auditor-General's Office has focused on procurement lapses. However, this year's audits consciously emphasise other areas than procurement to give public bodies more time to improve on their procurement processes, said the report.

In the area of grant administration, there should be proper controls on who grants are given to and how the funds are given out, "to ensure that grants are used for the purposes intended", noted Auditor-General Willie Tan.

But checks on the Media Development Authority found that officers responsible for receiving and screening applications for funding were not required to record the applications they had rejected, or why they had rejected them.

This "increased the risk of unfairness as an officer could unilaterally reject an application without valid reasons, and there would be no documentation trail to detect such cases", noted Mr Tan in the 66-page report.

About $41.4 million in grants had been disbursed under new MDA schemes by the end of March this year. The Auditor-General's audits are conducted on a test check basis and therefore do not reveal all irregularities and lapses, it said.

A more significant lapse in procurement this year included the National Library Board's (NLB) purchase of $3.76 million of library materials directly from a vendor, without calling for a competitive tender.

"By doing so, there was no assurance of value for money," wrote Mr Tan. "By design, the system does not enable NLB to get the best price for such purchases. Over time, the amount of savings could be significant."

The NLB has said it will improve its system by the end of the 2014 to 2015 financial year.

Another lapse highlighted was how the Health Ministry paid $64,000 in financial assistance to 99 people after their deaths.

The mistake, between January 2011 and October 2013, was due to "errors in death data captured by its agent" engaged to administer the scheme. The payments have since stopped, and the ministry has sought full reimbursement from its agent.

The Central Provident Fund (CPF) Board also did not have a good system to detect when employers wrongly paid CPF contributions to employees, noted the report.

It did not detect when an employer underpaid $816,000 in CPF contributions over a period of ten years to its employees who performed National Service. The matter only came to light when the employer discovered its mistake in May 2013 and informed the CPF Board about it.

Mr Tan noted that the irregularities and weaknesses highlighted in the report do not necessarily reflect the general state of administration.

They point to areas where improvements should be made in the accounting, management and use of public funds, he said.