SINGAPORE — Lapses in the administration of government grants and programmes were flagged by the Auditor-General’s Office (AGO) in its latest audit report released yesterday, which raised concerns over whether public funds were used appropriately.

Statutory boards such as the Media Development Authority (MDA) and the Central Provident Fund (CPF) Board, as well as the Ministry of Health (MOH), were among those culpable.

Among other lapses, the MDA was rapped for an “inadequate” system under which applicants for MDA grants were pre-screened and rejected. It was also lax in monitoring the submission of project deliverables by recipients of grants.

The AGO said that among the 28 projects which were checked, the deliverables for five of these projects were not submitted even though the deadlines were between one month and a year ago.

“There was no evidence that the MDA had taken prompt actions to follow up on these cases, which defeated the purpose of requiring grant recipients to meet the milestone deadlines,” the report for the financial year 2013/2014 said.

For 23 out of 159 projects checked, excess grants — ranging from 10 per cent to 74 per cent of the grants disbursed to the respective projects — totalling S$39,500 were not recovered.

There were also lapses in the evaluation of projects for funding. For example, the MDA had shortlisted an application for the New Talent Feature Grant scheme and eventually recommended as well as approved it for funding of S$250,000 — despite it being ineligible according to criteria.

Four other projects under the same MDA scheme with approved funding of S$900,000 also did not have their proposals evaluated against all the criteria issued to applicants, raising doubts as to whether these projects deserved the funding. “This could also subject the MDA to allegations of unfairness and lack of transparency,” the AGO noted.

The report — which was submitted to President Tony Tan on July 1 — noted that the AGO has been informed by the MDA that it has since tightened controls over the management and approval of grants.

A grant management system to strengthen internal controls and governance would be launched by year end. The MDA has also improved the processes for project evaluation and documentation.

The administration of MDA’s grants was in the spotlight recently after an assistant director, Lai Wai Khuen, 37, was charged for corruption and forgery. Lai, who obtained loans from grant applicants as an inducement or reward for facilitating the approval and disbursement of the grants, was jailed for 14 months last week.

Following the discovery of the lapses, the CPF Board improved its methodology for auditing wage records and investigated wrong payment cases, after the AGO discovered, among other things, wrong CPF contributions for employees performing operationally-ready National Service (NS).

For example, despite an audit of an employer’s wage records in February 2012, the CPF Board did not detect an underpayment of S$816,000 over a decade in CPF contributions for employees who performed NS.

The AGO also found lapses in the CPF Board’s monitoring and following up of erroneous Medisave claims. Out of 410 long outstanding erroneous claims that the AGO checked, no reminders were sent out for 79 over-claims outstanding for two years or longer that total S$101,500.

As of Dec 9 last year, there were 220 over-claims totalling S$204,000 that remained outstanding despite last reminders sent a year or more ago.

The AGO also found that the Inland Revenue Authority of Singapore (IRAS), which administers Goods and Services Tax (GST) refunds to tourists, made 266 refunds worth S$35,300 to 11 claimants who were not tourists. Duplicate GST refunds were also given out. Among the 29 duplicates costing S$4,400, 21 were made to persons who were not the original claimants.

In the AGO report, the IRAS said it would take action against those who wrongfully claimed GST refunds and carry out additional checks in future to detect ineligible claims. It has also informed retailers to institute proper controls for issuance of GST refund tickets and it would carry out regular checks to detect duplicate refunds.

Among lapses by other public organisations, the MOH was found to have continued making payment in financial assistance totalling S$64,000 to 99 persons for two to 32 months after these disabled elderly had died. The ministry said the mistakes were caused by errors in death data that have since been rectified and full reimbursement of overpayment has been made.

Corporate governance experts TODAY spoke to felt that lapses were bound to occur due to the sheer number of transactions that the public organisations engage in annually.

Associate Professor Mak Yuen Teen, from the National University of Singapore Business School, said: “What is important is that these lapses are promptly rectified and policies, controls and processes are improved, and the necessary training is provided.

He added that it is also important to ensure that these lapses are not due to bias, conflict of interest, corruption and fraud.”

Mr Ng Siew Quan, from PwC Singapore, noted that systems are only as good as the people managing them and that individuals at every level must be encouraged “to do the right thing and raise concerns as and when they see standards breached”.