No fraud in National Gallery's contractual waivers: Grace Fu

The National Gallery Singapore's (NGS) approval systems are being reviewed and the Ministry of Culture, Community and Youth is working with it to implement the changes. NGS also said its management, audit committee and board have completed a review o
The National Gallery Singapore's (NGS) approval systems are being reviewed and the Ministry of Culture, Community and Youth is working with it to implement the changes. NGS also said its management, audit committee and board have completed a review of its policies, covering areas such as its governance framework and processes on contract management.ST FILE PHOTO

No fraud was involved in the National Gallery Singapore's (NGS) waivers of contractual provisions, said Culture, Community and Youth Minister Grace Fu yesterday.

These waivers were largely related to penalties on the contractor for additional time taken to complete the development project.

In all, the waivers given to Takenaka-Singapore Piling Joint Venture totalled $13 million, which was flagged in the Auditor-General's Office (AGO) report last month.

The sum is not overpayment, Ms Fu said in her reply to Mr Png Eng Huat (Hougang), so there is "no need for any major recoveries" of monies. Such waivers and variation orders were to be expected for such a massive project, she added.

On the specific claims and sums of money involved, Ms Fu said: "This part is still being finalised... We will still discuss and in order not to compromise the position, I would not say how it would go one way or another."

The AGO had also criticised NGS for lapses in approvals for 142 contract variations amounting to $12.4 million. Approval on these variations was sought only after construction work had begun or was done. The delay ranged from 30 days to almost four years.

In one case, approvals for seven contract variations, each exceeding $100,000, were obtained from the incorrect approving authority.

A contractor was also overpaid by $150,300 because costs for work not done were not deducted.

In its report, the AGO had observed that "failure to properly assess and manage contract variations could result in the Ministry of Culture, Community and Youth (MCCY) not obtaining full value from the public funds spent".

Ms Fu explained that for greater efficiency and savings, MCCY gave the funds for the project to NGS to manage directly.

 
 

"NGS duly executed all contracts under its purview to deliver the project on time and below budget," she said. "During the course of the project, NGS addressed all findings from MCCY's progressive audits... MCCY will work with the Gallery to enhance its financial processes and procurement policies."

She also said NGS' approval systems are being reviewed and the ministry was working with it to implement the changes. "Having gone through the AGO's reports extensively and several times with NGS, we are satisfied that the claims and variation orders have good basis, and there is no basis for us to believe that there is any need for major recoveries."

In an e-mail reply to The Straits Times, NGS said its management, audit committee and board have completed a review of its policies, covering areas such as its governance framework and processes on contract management, managing contractual waivers as well as approval and valuation of contract variations, including the assessment of star rates. These refer to rates used for the valuation of variations not listed in the contract.

NGS is working with MCCY on its fifth and final audit of the project, to be completed by the end of this year. "Follow-up actions to further tighten our processes and rectify any lapses will be taken, if necessary," said the NGS spokesman.

A version of this article appeared in the print edition of The Straits Times on August 06, 2019, with the headline 'No fraud in National Gallery's contractual waivers: Grace Fu'. Print Edition | Subscribe