SINGAPORE - The Auditor-General’s Office (AGO) has flagged inadequate controls and checks by three government agencies in relation to their spending on the nation’s Covid-19 fight.
In its annual report released on Wednesday (July 20), 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 delays in obtaining approvals for contract awards and 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 price reasonableness, 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 on Wednesday after the report was published, the three agencies acknowledged the 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, such as in the evaluation of proposals and documentation of assessments carried out, the agencies said that 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 has reviewed the potential overpayments listed by the AGO and after conducting a payment verification exercise, has confirmed that there were no overpayments for most of the highlighted contract sums.
“SLA has taken the appropriate actions to recover about $25,000 of overpayments, and the total potential overpayment for remaining contracts that are still being reviewed is approximately $10,000,” it said.
After AGO’s audit found that HPB had overpaid 51 staff members $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 said that the agencies generally had in place processes and controls across the four stages of procurement and contract management.
These four stages are: planning and establishing needs, procurement and contracting, managing contracts and closure or renewal of contracts.
“The agencies had also implemented several good practices to facilitate timely response to the emergency situation and to reduce costs for the Government,” said AGO.
It highlighted several good practices that helped the Government reduce costs as well as better manage operations and uncertain demand.
For instance, HPB had established a group to handle swab personnel on the ground, noted the AGO, adding that the board developed a training standards and compliance framework for swabbers in June 2020.
SLA reduced costs by conducting a requote exercise with hotels for isolation about five months after it procured the first batch of rooms, to obtain better rates.
It also implemented a retainer basis model from December 2020 to January last year, where hotels were paid only when they were activated to provide accommodation facilities.
