AGO's checks of govt agencies 'not forensic, but found no signs of fraud'

The Auditor-General's annual checks of government agencies are not forensic investigations, said Senior Minister of State for Finance Indranee Rajah yesterday.

The Auditor-General's Office (AGO) selects samples from the accounts, looks at them and considers whether the system as a whole is robust, said Ms Indranee. "And if it picks up a point that the system in itself has got inefficiencies or deficiencies, it will highlight it.

"That is the nature, not just (of) an audit by AGO, but all audits."

She was responding to Workers' Party MP Png Eng Huat (Hougang) who had asked whether the AGO will direct government agencies found to have lapses in its report for Financial Year 2016/2017 to investigate all improper payments made and determine the sum to recover.

Mr Png also asked for the basis on which the Ministry of Health (MOH) had concluded there was no fraud in the ministry's accounts even though the AGO had found lapses in the ministry. The AGO had rapped it for the way tens of millions of dollars were spent in the building of the $800 million Ng Teng Fong General Hospital, and criticised MOH for "lack of controls and inadequate oversight" of the project that was completed in 2015.

Ms Indranee said there is no indication in the AGO report of any payments due to fraud, misfeasance or dishonesty. Cases flagged largely concerned overpayments and payments without prior approval or due to human error, negligence or failure to follow established procedures. Agencies are taking action to recover monies that might have been erroneously paid out, she said.

She noted Mr Png "may have misunderstood the nature of an audit". She added that an audit can trigger a forensic investigation only if there is a reason to do so, such as when there are conflicts of interest, payment to related parties or if the system enables the same person to submit a payment request, approve it and sign the cheque for payment.

There will not be a forensic probe in cases where there are proper procedures and the lapses were due to human error, she said. Whether a lapse uncovered in an audit leads to an investigation will depend on the nature of the lapse, she added.

In MOH's case, the rules and processes were adequate but they were not complied with, she said. "It is quite correct for MOH to say that the audit did not in this case disclose evidence of fraud," she said.

A version of this article appeared in the print edition of The Straits Times on October 03, 2017, with the headline 'AGO's checks of govt agencies 'not forensic, but found no signs of fraud''. Print Edition | Subscribe