Auditor-General finds lapses in contract management, IT and financial controls

The People's Association (top) and SCDF were among the government agencies flagged for lapses by the Auditor-General's office.
The People's Association (top) and SCDF were among the government agencies flagged for lapses by the Auditor-General's office. PHOTOS: URA/LIANHE ZAOBAO

SINGAPORE - Several government ministries and agencies have been flagged for lapses in contract management and weakness in information technology and financial controls by the Auditor-General's Office (AGO) in its annual audit of government accounts.

The AGO also found gaps in the management of research and development (R&D) grants, after carrying out an in-depth examination of such grants in a thematic audit.

A report on these findings for the financial year 2017/2018 was released on Tuesday (July 17).

In response, the Ministry of Finance (MOF) said: "The Government is firmly committed to ensuring accountability and transparency in its use of public resources. The regular and thorough audits by the AGO, and open sharing of its findings, reflect this commitment."

It added that the AGO audit of the accounts showed that public funds have been properly accounted for and financial statements were reliable and prepared in accordance with the law.

It also acknowledged that there is room for agencies to do better, adding that the Government has accepted all of AGO's recommendations, and will work on the necessary follow-up actions.

Among the more serious lapses was one which involved the backdating of vehicle maintenance records by the Singapore Civil Defence Force (SCDF), which it then submitted for audit.

The AGO, describing this as a "serious irregularity", said: "It weakens the system of public accountability and impedes the work of AGO."

During the audit, the AGO noticed that 104 of the 926 records for servicing jobs totalling $1.35 million were not authentic and informed the SCDF. It was later determined that the records had been created and backdated by three SCDF officers and the contractors involved.

The SCDF has since investigated the officers and found they did not intend to falsify records, but did so as they thought the documentation was required for auditing. The contractors were meanwhile taken to task for failing to keep proper records and for creating and backdating records.

The People's Association was rapped for contract management and procurement lapses for contracts amounting to about $1.9 million for the Chingay Parade and Chinese New Year and Mid-Autumn Festival celebrations.

In one case, a PA officer was allowed to buy Chingay costumes from overseas vendors amounting to $142,200, and to pay for them in cash or through a remittance agent, instead of going through the Government's GeBiz portal.

The officer subsequently claimed reimbursements using cash sales receipts, some of which the AGO found had tell-tale signs which cast doubts on their authenticity.

The AGO said although the officer was accompanied by at least one other staff member during the sourcing and purchasing trips, he had made two additional personal overseas trips at his own expense to make purchases, settle final payments for earlier purchases and obtain cash sales receipts.

"Allowing the officer to make purchases and payments unaccompanied by other staff exposed PA to the risks of duplicate and inflated claims," said the AGO in its report.

The PA has since informed the AGO that it has stopped all overseas direct purchases by staff and procured the costumes and accessories for Chingay Parade through GeBIZ.

As overseas purchases had been made for the Chingay Parades since 2007, PA has accepted AGO's recommendation to review past purchases and payments to ascertain if there were similar weaknesses and whether they had been exploited.

This year, the AGO also looked into the management of R&D grants by Agency for Science, Technology and Research (A*Star) and the National Research Foundation (NRF).

AGO noted that generally there were established processes for grant application, evaluation and award, but flagged some gaps in the management of these grants.

For A*Star, AGO noted lapses such as delays in the grant disbursements and settlement of final accounts and inadequate monitoring of industry contributions. In the case of the National Research Foundation, it found a lack of a framework leading to inconsistencies in grant management as well as laxity in verification of fund requests, among other issues.

Commenting on this year's findings, Auditor-General Willie Tan Yoke Meng said: "A number of observations reported this year are of similar lapses which I have highlighted in the last few years although the lapses involved different entities. Hence, more should be done to address these concerns so that the financial governance and controls of the public sector as a whole would be strengthened."

"To achieve this, every public sector entity needs to play its part in implementing effective controls to address the gaps," he added, saying he was pleased that those who were audited by the AGO had taken the audit observations seriously and have promised to rectify the lapses.

"AGO will continue to work with the public sector entities to ascertain that these follow-up actions are taken."

MOF in its response said that for lapses related to contract management, IT controls and financial controls, the heads of the agencies flagged have reviewed each case and are taking steps to address the findings.

Where applicable, investigations have been carried out and disciplinary actions were taken against officers found responsible for wrong-doing.

"In cases where there have been overpayments, these have either been recovered or recovery action has been initiated," it said.

"Agencies have also verified that no confidential data has been compromised as a result of the lapses in IT controls."