SINGAPORE - The roll-out of a national fitness challenge by the Health Promotion Board (HPB) was found to have wasted $5.39 million of public funds, due to fitness trackers that were not put to use, the Auditor-General's Office (AGO) has said.
In its annual audit of government accounts, the AGO also flagged that erroneous claims paid to ineligible officers or pensioners over a period of more than two years which were administered by the Public Service Division (PSD) resulted in the possible overpayment of around $500,000.
The AGO detailed these and other findings in a report released on Thursday (July 22) on government accounts for the 2020/2021 financial year.
In all, the unmodified audit opinion on the Government financial statements covered the financial statements of all 16 ministries as well as eight organs of state, three statutory boards, four government-owned companies and two other accounts.
AGO also carried out selective audits of eight statutory boards whose financial statements were audited by the external parties.
Responding to the AGO report, the Ministry of Finance (MOF) said the audit report is an independent verification that the Government's accounts are reliable and prepared in accordance with the law.
But it also acknowledged there is room to do better, adding that the Government takes AGO's observations seriously. "Where there are lapses, we undertake corrective actions and learn from them," MOF said.
Several government ministries and agencies were flagged by the AGO for lapses in five broad areas.
Lapses in management of operations and weaknesses in controls
For the Health Promotion Board, the AGO noted that its lapses pertained to the National Steps Challenge seasons 1 to 5, which had ended between one and five years prior to the audit. AGO's checks found an excess of 268,000 fitness trackers valued at $4.26 million in total.
Following this discovery, the Health Promotion Board carried out a full stock count in January this year, which found that it actually had 341,000 excess trackers, valued at $5.39 million in total.
The audit office noted that while the stock of trackers was properly accounted for, the Health Promotion Board's processes were inadequate to ensure.
"The receipt and distribution of trackers involved manual processes and multiple external parties. There was no central monitoring of the movement and stock of trackers; records maintained were incomplete; and there was no periodic reconciliation of records with physical stock on hand," it said.
The Health Promotion Board said on Thursday that it has taken immediate steps to remediate the lapses and strengthen its processes.
"The over-estimation of final demand arose as HPB had pre-emptively topped up its stock of fitness trackers each season based on the observed interest from the public, which manifested for example in long wait times and queues from tracker collection. For future seasons of the National Steps Challenge, HPB will be more conservative in our projections," it said.
The Straits Times learnt that HPB started offering a one-to-one exchange of fitness trackers for participants from March this year after AGO flagged the excess.
Responding to queries, the board said it went through a review of how to better use its excess trackers and found that it could "broaden" its replacement criteria to replace trackers with expired warranty and usage-related damages such as broken straps.
"Misplaced fitness trackers, on a case by case basis, could also be replaced. We hence embarked on the special one-time exchange that commenced in March 2021," it said.
On the lapses found in the claims administered by the Public Service Division, AGO said that it discovered these erroneous claims while it was auditing medical and dental claims in the civil service.
The office found 9,500 possible erroneous claims paid to ineligible officers/pensioners over the period of Jan 1, 2018 to March 31, 2020.
AGO said: "While this amounted to only 0.3 per cent of the three million claims processed during this period, the estimated possible overpayment by the Government was not small, at around $0.5 million."
Weaknesses in IT controls
AGO singled out weaknesses at the Accountant-General's Department and the Accounting and Corporate Regulatory Authority over the management of the privileged operating system user accounts.
These refer to computer accounts that give access to more secure parts of an agency's systems, including the ability to make changes to audit logs, change the access of other users access and adjust security settings.
AGO also noted that for the integrated logistics management system in the Ministry of Home Affairs (MHA), there was no segregation of duties for the person reviewing administrator activities and the person performing those activities. "
Unauthorised activities could compromise the respective servers and affect the processing and recording of financial transactions in the servers," it said.
Possible irregularities in records furnished for audit
In its audit of the Ministry of Culture, Community and Youth, AGO found that some supporting documents for claims appeared to have been photocopies, with alterations made to the dates and duration of services rendered.
At the Ministry of Education (MOE)and MHA, AGO said it came across instances of supporting documents created or even backdated to satisfy queries.
For the Housing Development Board, it was found that quotations for some items could have been created or altered to give the impression that they were obtained from other suppliers.
At the People's Association (PA), possible irregularities suggested falsification of quotations, alteration of hard copy payment supporting details and the creation and backdating of documents.
AGO said that following its observations, the relevant agencies had carried out investigations and lodged police reports where appropriate. It added that the entities audited take the audit observations seriously and are committed to address the lapses and weaknesses.
Lapses in procurement and contract management
The audit revealed that an officer with the Maritime and Port Authority of Singapore had detailed discussions with a tenderer to make significant changes to its proposal, and had also informed the tenderer to start work even before the tender was awarded.
AGO also noted similar shortcomings in PA, where lapses in adjustments for price fluctuations of construction materials for a development project, among others, were carried out before the approval of winning quotations.
For Singapore Polytechnic (SP), AGO found that SP did not put up required reports to the central Government authority concerning two tenderers who had withdrawn their bids after the close of tenders, but before the tenders were awarded.
This is a serious matter and is ground for debarment, said AGO.
Improvements needed in management of facility management contracts
AGO had conducted a thematic audit on facility management contracts under MOE and MHA.
While it found that both had policies and procedures in place to manage their facility management contracts and had some good practices, it suggested areas for improvement.
These include strengthening the controls and supervision of contractors' compliance with contractual requirements.
For MOE, AGO said there could be further aggregation of procurement for services commonly used by schools.
For MHA, it said there is a need to strengthen its oversight of contractors' compliance with contractual requirements and to ensure that contract variations were put up for deviations from contractual requirements.