Bone marrow charity under special audit called by Health Ministry

The Sunday Times understands that the Health Ministry appointed KPMG Services to conduct the review. KPMG flagged the "excessive" use of donations on marketing. BMDP responded that growing the number of donors on the register required significant out
The Sunday Times understands that the Health Ministry appointed KPMG Services to conduct the review. KPMG flagged the "excessive" use of donations on marketing. BMDP responded that growing the number of donors on the register required significant outreach and marketing. The charity organised an exhibition and flashmob in Orchard Road to mark World Marrow Donor Day in September last year (left).ST FILE PHOTO

KPMG looking into admin, governance issues in Bone Marrow Donor Programme

The Health Ministry has commissioned an audit into a healthcare charity that manages a private bone marrow registry here, following feedback it received on administrative and governance issues within the organisation.

The audit into the Bone Marrow Donor Programme (BMDP) started in September last year. It is not known when the audit will be completed, but the 24-year-old charity's Institutions of a Public Character (IPC) status expires next month. The IPC status allows it to raise funds from donors who will enjoy a tax deduction - the lifeline for many charities here.

When contacted by The Sunday Times, a Health Ministry spokesman said: "The Ministry of Health (MOH) has received feedback on the administration and governance of the Bone Marrow Donor Programme. We have appointed an auditor to further review the issues raised in the feedback, and are discussing the findings of the review with BMDP.

"As we have yet to conclude our review, it is premature to comment on the review or discuss if actions will be taken."

MOH added that BMDP's operations will continue during the review. BMDP builds and manages Singapore's only register for volunteer bone marrow donors, helping to save the lives of Singaporeans suffering from blood-related diseases.

The Sunday Times understands that MOH appointed KPMG Services to conduct the review.

According to documents seen by The Sunday Times, the draft audit had flagged "critical and major" areas of concern after reviewing the charity's operations between 2013 and July last year.

  • WHAT IS THE BONE MARROW DONOR PROGRAMME?

  • WHO: The Bone Marrow Donor Programme (BMDP) was set up in 1993, the first of its kind in South-east Asia. It was started by accountants Gerald Loong and his wife Wong May Cheng. They had lost their five-year-old son Andrew to leukaemia in December 1992, after failing to find a suitable donor to save him.

    WHAT: They created the registry with the target of having 10,000 bone marrow donors from junior colleges and tertiary institutions, and the goal of getting young people to become bone marrow donors for life. It was reportedly aimed not just at helping people find a match, but also to finance research in leukaemia and blood-related diseases.

    MISSION: While research no longer figures on BMDP's website, the organisation is still looking to build a register of Singapore bone marrow donors, and also to educate people about blood-related disease, to be an advocate for donors, and to be part of a global bone marrow donor network.

    TREATMENT: Bone marrow, or blood stem cell, transplant is the best treatment option for patients diagnosed with blood diseases such as leukaemia and lymphoma. Without a transplant, many of them die. At any one time, at least 50 patients here are waiting to find a matching donor. Siblings of the patient have a one in four chance of being a compatible donor. When that option fails, the patient turns to unrelated donors, where the chances of a match are one in 20,000. In recent years, the ability to conduct half-matched (haploidentical) or cord blood transplants has given more patients hope for a cure. BMDP facilitated 49 transplants here last year, 31 involving local donors.

    DONORS: Over 75,000 donors have joined the registry, which records a person's genetic type through a cheek swab. Donors need to be between 17 and 49 years old to sign up. BMDP launched Project Tomorrow last year to add 50,000 donors by 2018.

    KEY PLAYERS: Mrs Jane Prior, who previously managed her own regional marketing and public relations consultancy firm, is the organisation's chief executive officer. She took on the position in 2012. The outfit has a staff of about 20.

    BMDP's 13-member executive committee includes lawyer Norman Ho, who is its president, as well as doctors and finance professionals.

    FUNDS: BMDP's reserves have grown from $1.6 million in 2012 to $16.7 million last year. The salary of the top earner at BMDP has grown from $108,740 in 2012 to between $250,001 and $300,000 last year. Source: BMDP annual reports and newspaper articles

Among the findings, the audit questioned if the services of BMDP's Patient Services and Donor Centre were considered "charitable" since the cost of the services offered to patients was recovered from patients, with a "mark-up".

For patients, the search for a suitable donor is free.

It can cost the patient from $20,000 to over $60,000 for procurement of bone marrow, depending on whether either patient or donor is here or abroad.

BMDP gets donations through third-party fund-raisers, gala events and grants. Its reserves have grown from $1.6 million in 2012 to $16.7 million last year. Of more than $900,000 raised for its Needy Patient Fund, set up in 2015, $51,500 was disbursed to needy patients that year, according to the audit.

KPMG also flagged the "excessive" use of donations on marketing and entertainment. Concerns were raised as well about the "unclear policy" regarding BMDP's reimbursement practice for entertainment purposes, as well as the overseas travel claims of a senior executive.

Yet, special audits do not necessarily indicate any wrongdoing or fraud, said Mr Gerard Ee, chairman of the Charity Council and a veteran of the charity sector.

Said Mr Ee: "From time to time, you will hear about things, and if it is quite recurring, then a special audit is something to verify the facts, whether there is anything substantial in what you have been hearing."

In the KPMG audit, BMDP responded to the questions raised. For example, when KPMG noted that there was an instance of overpayment of Central Provident Fund contribution, the management explained that it was a clerical error.

The management also said that growing the number of donors on the register required significant outreach and marketing. The funds used for such activities were approved by the BMDP board which said it had informed major donors.

According to sources, KPMG auditors had met BMDP officials several times since December last year to seek clarification for the audit's draft findings. The auditors had also requested invoices, receipts, documents and claims made by senior executives.

The findings of such audits can have an impact on the renewal of a charity's IPC status. In BMDP's case, it was last renewed in May last year and will expire on July 7. Previously, the charity had been allowed to operate for two years before it was asked to renew its IPC status.

 

When contacted by The Sunday Times, BMDP president Norman Ho and chief executive Jane Prior both declined comment.

However, a former board member who declined to be named said he resigned in 2015 due to governance issues relating to human resource practices and key strategic directions.

He said: "I felt too much effort was placed on publicity and not enough on programmes that really benefited donors and patients. For example, coming up with financial assistance schemes for patients who might not have enough money for treatments."

  • $16.7m

    BMDP’s reserves last year, up from $1.6 million in 2012

    $900k

    Approximate aamount raised for its Needy Patient Fund

    $51.5k

    Amount disbursed to needy patients in 2015

He said he had raised his concerns at board meetings, but "at the end of the day, I decided to leave".

Another former board member, who also declined to be named, pointed out that it had been "an uphill battle" to gain recognition for the charity's cause in the early days.

"Now, with the publicity, we are at least able to make people sit up and be aware of bone marrow issues. A lot of people ask why all the publicity or why spend all the money? But it's a chicken-and-egg situation. The cause is a worthy one."

She added: "In every organisation, if you look closely, you're bound to find something. I have been involved in quite a few and there are always queries as far as the accountants are concerned."

A version of this article appeared in the print edition of The Sunday Times on June 04, 2017, with the headline 'Charity under special audit called by MOH'. Print Edition | Subscribe