The revamp of a National Library Board (NLB) building was found to have gone over budget by $1.72 million due to a lack of scrutiny from its officers, the Auditor-General's Office (AGO) said.
In its annual audit of government accounts, the AGO also flagged problematic cash collection and contract management processes in JTC Corporation. It found that premises leased and tenanted out by JTC may have been sublet to 26,000 entities without approval as well.
Spot checks further uncovered the illegal storage and sale of diesel on four of its industrial premises, which could pose environmental and safety risks to the public.
The AGO detailed these findings in a report released yesterday on government accounts for the financial year 2019/2020.
In its report, the AGO said NLB had an approved budget of $20.53 million for the revamp of the National Archives of Singapore building, which reopened in April last year after an 18-month makeover.
The AGO found that the management of the revamp was "inadequate on several fronts" due to a lack of scrutiny from approving officers. In particular, it noted that more than half of contract variations were given in-principle approvals (IPAs), even though no ballpark cost estimates were provided.
This meant that NLB had approved works even though it did not know the costs involved, said the AGO. In one case, the variation was as high as $370,000.
The lack of proper monitoring caused the cost of the revamp to increase by more than 8 per cent, to more than $22 million.
The AGO also found that NLB sought approval from its approving authority to exceed the initial approved project costs only five months after it learnt of the cost overrun. Doing so undermined the role of the approving authority and indicated a weakness in financial controls, the AGO said.
In a statement yesterday, NLB said it introduced the IPA process in September 2018 to allow urgent variation works to be carried out quickly. While these approvals are then reviewed by NLB-approved consultants before any payment is made, the board said it will review its processes to ensure approvals for contract variations are prompt and well documented, including for all urgent renovation works.
In JTC's case, the AGO's checks on the firm's lease and tenancy management found suspected cases of unauthorised subletting on its premises.
When subletting, lessees or tenants of JTC - an industrial land and infrastructure agency - have to comply with conditions such as the maximum sublet area and payment of subletting fees once applications are approved.
Some lapses found by AGO
MINISTRY OF FOREIGN AFFAIRS
In the audit of an overseas mission, the Auditor-General's Office (AGO) said the Ministry of Foreign Affairs (MFA) had inadequate measures to enforce terms stipulated in the service agreements signed with its authorised visa agents.
The agreements stipulated a fixed visa application fee and required agents to use only designated credit cards when transmitting visa processing fees to MFA.
But the AGO found that visa application fees stated on the websites of three agents were higher than the fixed fee stipulated in the service agreements.
It also found that controls in the ministry's information and communication technology system were ineffective in detecting use of non-designated credit cards by agents to transfer visa processing fees.
In its audit, the AGO found that PUB did not ensure one of its private sector partners had implemented adequate controls on users' access to the agency's IT system. This caused lapses like excessive rights being granted to the partner's vendor and the sharing of an administrator account among the staff of the partner.
PUB also had weak payment controls for a project a private sector partner was involved in, which allowed the partner to modify real-time values of parameters in its IT system and affect the amounts to be paid by PUB.
It also relied on information provided by the partner on areas like water output volume to make payments without carrying out adequate independent verification, the AGO added.
The AGO flagged several issues with grant evaluation and approval in its business grant programmes, along with grant disbursement and cessation.
This included instances of double claims by companies and cases of double funding across different grants.
It also uncovered three cases where companies or individuals might have circumvented grant requirements and controls.
The WSG has since made police reports on these cases.
The AGO found about 26,000 business entities had indicated JTC premises as their registered addresses, even though these were neither JTC's lessees or tenants, nor subtenants it had approved.
Unauthorised subletting would expose JTC to unauthorised or illegal activities on its premises and financial loss due to under-collection of sublet fees, AGO warned.
Between last November and this January, AGO conducted site visits and found 41 suspected unauthorised subtenants on 12 of 15 JTC premises.
Notably, on four of these premises, AGO found illegal storage and sale of diesel to the public, which it said pose environmental and safety risks to the public.
Following this, JTC investigated 2,792 of the 26,000 business entities and discovered that 2,010 of these were suspected cases of unauthorised subletting. Out of these, 1,260 were related entities of lessees and tenants.
JTC said yesterday that it has strengthened its inspection regime to detect and reduce such unauthorised subletting.
It has also worked with the authorities to take action against tenants who store or sell diesel illegally, and with the Singapore Civil Defence Force to grant licences to store diesel only if lessees had obtained prior consent to install diesel tanks on its premises.
AGO also found that JTC officers who received cash would also record the receipts, but that there were inadequate checks of cash being banked in.
When a receipt is recorded in JTC's accounting system, a hard-copy receipt printed on serially numbered papers is generated. One portion of the receipt is given to the customer, while another is retained by JTC for record.
But AGO's checks of the receipts retained by JTC between April 1, 2018 and Oct 15, 2019 found eight missing. While five of them were later provided, three could not be found. JTC has since carried out an investigation and lodged a police report. It has also stopped accepting cash payments from this February.
In addition, the AGO found possible irregularities in three quotations submitted by one of JTC's contractors, which it had asked to provide driver services for one year from April 2017.
The AGO had concerns over the authenticity of these quotations, noting that JTC accepted the lowest quotation without comparing the quotations received with previous rates for similar services.
The lowest quotation was between 17 per cent and 100 per cent higher than previous rates paid for similar driver services, and a total of $66,240 was paid to the contractor for the services.
JTC told the AGO that robust checks by its staff were absent in reviewing and approving the quotations and that it would be taking disciplinary action against its staff.
JTC has also lodged a police report on this issue.