Areas for improvement in HPB, MOM, SLA's Covid-19 processes

The Auditor-General's Office (AGO) has flagged inadequate controls and checks by three government agencies in relation to spending on the nation's Covid-19 fight.

In its annual report released yesterday, the AGO said the Health Promotion Board (HPB), Ministry of Manpower (MOM) and Singapore Land Authority (SLA) generally had processes in place for procurement and contract management, but highlighted areas for improvement.

The AGO had conducted a thematic audit on samples covering 18 per cent of the total Covid-19 expenditure by the three agencies, which spent $1.51 billion on manpower services, accommodation facilities and meal catering from January 2020 to March last year.

It found that there were lapses in the evaluation of contractors' proposals and how the agencies determined if prices were reasonable, as well as discrepancies and omissions in submissions to the approving authority for contract award.

The AGO also observed that the three agencies had weaknesses in payment processes, such as inadequate checks on validity of payments. There were discrepancies in payment claims and a lack of supporting documents as well.

For instance, AGO found that HPB could not locate job application and evaluation documents for 134 personnel hired to conduct swab tests. Out of these, documents pertaining to the contract offer and the acceptance of offer for 131 of them were not found. AGO also observed that eight swabbers were appointed despite not meeting one shortlisting criterion.

There is also a need to improve on the documentation of assessments carried out, for example, on pricing, said AGO.

In checks it conducted for 26 direct contracts worth more than $530 million, AGO found lapses in SLA's evaluation of six contracts that totalled about $147 million, involving six sites including a hotel.

There was insufficient assessment to determine if the price quoted by the contractors was reasonable, it noted. In four of the contracts - awarded to the same contractor - there were no details in the tender submission report to back SLA's assessment that the contractor had the expertise and experience to manage these sites as accommodation facilities.

For three of them, SLA did not detect or follow up on possible overlaps in work items or inconsistencies in work scope, resulting in possible overpayments, estimated to be at $350,000.

In a joint statement yesterday, the three agencies acknowledged observations made by the AGO, and said they have taken immediate steps to rectify instances of inadequate controls and checks.

Noting that the AGO had pointed out areas where controls could be improved in procurement and contracting processes, the agencies said they will review their emergency procurement procedures. "These will have strengthened controls and processes to cater for urgent operations, while adhering to the Government's procurement principles," they said.

MOM has fully recovered about $150,000 of overpayments and made good on about $51,000 of underpayments, said the statement.

AGO had test-checked 108 payments by the ministry totalling $87.7 million for manpower services, and found 53 payments amounting to $72.78 million where there were inadequate checks before payments were made.

SLA said it has reviewed the potential overpayments listed by the AGO and, after conducting a payment verification exercise, confirmed that there were no overpayments for most of the highlighted contract sums.

It added that it has taken steps to recover about $25,000 in overpayments, with an estimated $10,000 in overpayment for remaining contracts that are still under review.

After AGO's audit found that HPB had overpaid 51 staff $580,000 due to delays in the keying in of termination dates into the human resource or finance system, the board has been clawing back outstanding overpayments.

In its report, AGO noted that the agencies had also implemented several good practices that helped the Government reduce costs as well as better manage operations and uncertain demand.

For instance, HPB established a group to handle swab personnel on the ground, while SLA conducted a re-quote exercise with hotels for isolation about five months after it procured the first batch of rooms, to get better rates.