People's Association files police report over irregularities

The AGO said two critical tender requirements were not explicitly incorporated into tenancy agreements at Heartbeat @Bedok, with one such agreement related to the provision of childcare services. This resulted in the tenant charging fees higher than
The AGO said two critical tender requirements were not explicitly incorporated into tenancy agreements at Heartbeat @Bedok, with one such agreement related to the provision of childcare services. This resulted in the tenant charging fees higher than a specified cap for the first two years of its operation. The People's Association said it has taken steps to review the management of contracts at Our Tampines Hub (above) and Heartbeat@Bedok, address lapses and initiate rectification of any overpayment or underpayment. It also made a police report over irregularities observed at the Hub, including possible falsification of documents. PHOTO: LIANHE ZAOBAOST FILE PHOTO
The AGO said two critical tender requirements were not explicitly incorporated into tenancy agreements at Heartbeat @Bedok, with one such agreement related to the provision of childcare services. This resulted in the tenant charging fees higher than
The AGO said two critical tender requirements were not explicitly incorporated into tenancy agreements at Heartbeat @Bedok, with one such agreement related to the provision of childcare services. This resulted in the tenant charging fees higher than a specified cap for the first two years of its operation. The People's Association said it has taken steps to review the management of contracts at Our Tampines Hub (above) and Heartbeat@Bedok, address lapses and initiate rectification of any overpayment or underpayment. It also made a police report over irregularities observed at the Hub, including possible falsification of documents. PHOTO: LIANHE ZAOBAOST FILE PHOTO

The Auditor-General's Office (AGO) has flagged several lapses and possible irregularities related to the People's Association's (PA) management of two large development projects, Our Tampines Hub and Heartbeat@Bedok.

In a statement yesterday, the PA said it has taken immediate steps to review the management of contracts at both developments, address the lapses identified and initiate rectification of any overpayments or underpayments. It also made a police report over the irregularities observed at Our Tampines Hub, including possible falsification of documents.

The PA had engaged contractors to carry out minor building works at the Hub, and a managing agent to manage the facilities and supervise the contractors.

The AGO checked a sample of payments totalling $1.27 million made between April 2018 and March last year and found possible irregularities in the supporting documents for 34 of the 36 payments.

The irregularities included possible falsification of quotations, alteration of hard-copy payment supporting documents and the creation and backdating of documents to give the false impression that proper processes had been followed.

"As the lapses relate to serious allegations involving falsification of documents, including in relation to claims by external parties, PA has lodged a police report and investigations are ongoing," the PA said, adding that it had suspended the staff involved pending the outcome of the investigation.

The PA also said it would set up a task force led by senior officers to strengthen processes in procurement, contract and facility management, raise staff capabilities, and improve oversight of contractors and managing agents.

It will also appoint an external consultant to conduct a thorough review of its governance system and oversight functions related to contract management of all development projects.

The external consultant will be given a "broad mandate" to review such matters and provide recommendations to strengthen the PA's oversight of contract management.

Other issues the AGO flagged include lapses in the computation of adjustments for price fluctuations for the main construction contract at Our Tampines Hub and weaknesses in the management and oversight of contract variations for the main construction contracts for the Hub and Heartbeat@Bedok.

This means the PA could have overpaid its contractors by an estimated $2 million for building materials for Our Tampines Hub, such as concrete and steel reinforcements.

The AGO also checked 465 contract variations amounting to $26.48 million and found lapses in 252, or 54.2 per cent of them. Contract variations are mutually agreed changes to the terms of contracts that are already in effect.

No evidence of approval was found for 109 contract variations, while approvals for 142 of them were obtained only one month to 5½ years after works had commenced or were already completed. Other issues included the use of incorrect rates, resulting in overpayments and underpayments.

The PA said it would work with consultants to determine the amount of overpayments or underpayments and take the appropriate steps.

The AGO also noted that two critical tender requirements were not explicitly incorporated into tenancy agreements at Heartbeat @Bedok.

For one such agreement related to the provision of childcare services, the PA had stipulated a cap on full-day childcare fees in the first two years of operation, from August 2017 to August 2019, in order to provide residents in the vicinity of Heartbeat@Bedok with lower fees.

But the PA failed to ensure this requirement was made explicit in the tenancy agreement. This resulted in the tenant charging fees that were 23 per cent higher than the cap specified for the first two years of its operation.

The PA said that this was a "unique arrangement" and the condition was not part of its standard tenancy agreement template for development projects.

It added that the tenant had agreed to refund the difference to affected parents by the end of July.

Another tender requirement related to adjustments in rent and service and conservancy charges due to a revision of tenanted floor area. This resulted in tenants being charged incorrect amounts.

The PA said it has since made the appropriate adjustments and refunded affected tenants.

A version of this article appeared in the print edition of The Straits Times on July 23, 2021, with the headline 'People's Association files police report over irregularities'. Subscribe