Auditor-General flags lapses at ministries, govt agencies

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

He calls for more to be done to fix problems found in contract management, and IT and finance controls

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

These problems have been similarly found in previous audits, and Auditor-General Willie Tan Yoke Meng called for more to be done to fix them.

A report on the AGO findings for the financial year 2017/2018 was released yesterday.

In response, the Ministry of Finance (MOF) acknowledged there is room to do better, adding that the Government has accepted all the AGO's recommendations and has started rectifying the problems.

"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," it added.

The MOF also said the AGO audit of the accounts showed public funds were properly accounted for and financial statements were reliable and prepared according to the law.

Commenting on this year's findings, Auditor-General Tan said several of the lapses are similar to those he had highlighted in the past few years, "although the lapses involved different entities''. He also said he was pleased that those who were audited have taken the audit observations seriously and have promised to rectify the lapses.

In all, the audit covered financial statements of all 16 ministries and eight organs of state, five government funds, nine statutory boards, four government-owned companies and three other accounts.

The AGO singled out, in its report, what it described as "more significant audit observations". These related to three ministries, four statutory boards and three government funds.

The Singapore Civil Defence Force, People's Association and Ministry of Education, for instance, were rapped for lapses in contract management, such as paying for services that were not done and failing to obtain proper approvals before awarding contracts.

Meanwhile, weaknesses in IT controls were uncovered at the Defence Ministry and the Accounting and Corporate Regulatory Authority. They did not adequately monitor the activities of certain users.

The AGO also did an in-depth examination of research and development grants, an area it selected to conduct a thematic audit.

It looked specifically at the Agency for Science, Technology and Research (A*Star) and the National Research Foundation (NRF), which together oversee billions of dollars in such grants.

While there were generally established processes for the application, evaluation and awarding of grants, some gaps were found in the management of these grants, the AGO said.

For A*Star, the AGO noted inadequate monitoring of industry contributions, for instance.

At the NRF, it found inconsistencies in grant management as well as laxity in the verification of fund requests, among other issues.

Commenting on this year's findings, Auditor-General Tan said several of the lapses are similar to those he had highlighted in the past few years, "although the lapses involved different entities".

He also said he was pleased that those who were audited have taken the audit observations seriously and have promised to rectify the lapses.

The MOF, in its response, said that for lapses in 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 taken against officers who were found responsible for the wrongdoing.

"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," said the MOF.


Some of the lapses found

Singapore Civil Defence Force


LIANHE ZAOBAO FILE PHOTO

The Auditor-General's Office (AGO) noted that 104 out of 926 records of scheduled vehicular maintenance jobs, totalling $1.35 million, were inauthentic. Later, it was found that the records had been created and backdated by three SCDF officers and the contractors involved.

SCDF told The Straits Times that the three officers were disciplined and they did not make any financial gains from their actions. The data they compiled was true and accurate, it added.

The AGO said SCDF had "taken the contractors to task" for failing to keep proper records and creating and backdating records.

SCDF also did not have adequate procedures to ensure the two contractorsprovided the services, which cost a total of $1.8 million a year. The AGO's test checks found SCDF paid $120,000 for services that were not provided.

SCDF had relied on servicing schedules the contractors prepared. It did not have its own procedures.

SCDF said all erroneous payments have been recovered. The AGO said SCDF will implement an integrated logistics management system by 2020.

People's Association


ST PHOTO: ARIFFIN JAMAR

PA 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 then claimed reimbursements using cash sales receipts. The AGO found some receipts had tell-tale signs that cast doubts on their authenticity.

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

It added that letting the officer "make purchases and payments unaccompanied by other staff exposed PA to the risks of duplicate and inflated claims".

PA said the officer quit last year. It has also stopped all overseas direct purchases by staff, and procured the costumes and accessories for the Chingay Parade through GeBiz.

As overseas purchases had been made for Chingay parades since 2007, PA reviewed past purchases and payments, and preliminary findings indicate that they were genuine. PA also set up an independent panel last month to conduct a second round of checks for any signs of fraud.


Ministry of Defence

Mindef overpaid fees for grass-cutting for six years, amounting to about $200,000.

This was mainly due to overstatement of the area involved.

The mistake was not detected by the ministry's facilities management agent and the contract manager - the Defence Science and Technology Agency (DSTA).

Their repeated failures to detect the errors made by the contractor cast doubts on whether both had carried out their duties diligently, said the AGO.

Further checks by the AGO found DSTA would not check the accuracy of land areas declared by the contractor unless it was alerted by the facilities management agent.

DSTA did not conduct any checks between Oct 1 , 2011, and Sept 30 last year, and was unaware of the discrepancies until the AGO's query.

The ministry has informed the AGO that the money will be recovered from the contractor.

DSTA will also impose contractual penalties on the contractor for over-claiming and on the facilities management agent for failing to properly check the contractor's claims.


Ministry of Education

The lapses were in school development projects that were managed by consultants.

Delays in payments to contractors ranged from three months to more than three years for 30 school construction projects, which amounted to $13.61 million, the AGO said.

There were also instances when modifications to construction contracts were not properly managed, resulting in an estimated overpayment of $154,900, it added.

"Given these lapses, there was no assurance that MOE had exercised adequate oversight of its consultants on issuance of final accounts and management of contract variations as well as financial prudence in the use of public funds in these development projects," it said.

The ministry said in a statement yesterday that it is addressing the concerns raised by the AGO and is improving its internal processes.

"We are working with our consultants to issue the final accounts of all 14 outstanding contracts by end-2018," it said.

The ministry also said that it is recovering the overpayment of $154,900 which was due to contract variations.


Immigration and Checkpoints Authority

ICA was found to have let the ICA Recreation Club (ICARE) set up photo booths on its premises without charging rent, which would have totalled an estimated $6.1 million.

The AGO found out after a complaint alleged the money the club received from the public was diverted to fund welfare activities and events attended by ICA staff.

ICA told The Straits Times that the allocation of the space, rent-free to ICARE by the Government, is a "historical legacy". "This was put in place in the 1980s when the Ministry of Finance (MOF) issued approval for such directly to the club."

The club is registered as a society, with members being current or retired staff, and its money was primarily used for sports and recreational activities for members.

The Home Affairs Ministry has since been advised by MOF that given the changes in government policy, ICA should seek to recover the roughly $6 million in rent forgone since 2002, the AGO said.

ICA said it has taken the space back from ICARE, which intends to deplete all its funds of $2.45 million to pay the Government for the rent forgone.

A version of this article appeared in the print edition of The Straits Times on July 18, 2018, with the headline 'Auditor-General flags lapses at ministries, govt agencies'. Print Edition | Subscribe