Overstatement of grass-cutting area, rentals forgone: What the Auditor-General found

SINGAPORE – Ten agencies were criticised in the latest public sector audit for lapses or gaps in the management of contracts and research and development (R&D) grants, with three ministries found to have overpaid contractors by the hundreds of thousands.

Here are snippets of the 66-page report released by the Auditor-General's Office (AGO) on Tuesday (July 17).
 

LAPSES IN CONTRACT MANAGEMENT

Singapore Civil Defence Force (SCDF)

The SCDF poorly managed two vehicle maintenance contracts worth S$1.8 million a year, and paid S$120,000 for services that were not rendered. The SCDF told the AGO that it would recover the wrong payments by end-June this year. A new integrated logistics management system will also be in place by April 2020 to better schedule, check and validate vehicle servicing and repairs.
 

Ministry of Defence (Mindef)

The ministry overpaid SS$200,000, or about 27 per cent of its total S$700,000 payment, to a contractor tasked to cut grass at a camp over six years because the area with grass to be cut was overstated. The problem arose because the Ministry's contract manager, the Defence Science and Technology Agency (DSTA), did not check the accuracy of land areas declared by the contractor. DSTA will tap technology to streamline the management and maintenance of camps and facilities moving forward.

Ministry of Education (MOE)

MOE overpaid S$154,900 in four construction contracts for works that were excluded or not done in accordance with contract provisions, among other reasons. The Ministry is in the process of recovering the sum, and is conducting a review of its internal processes to ensure variation works will no longer be carried out without proof of approval.

The ministry also delayed issuing the final accounts of 30 school construction contracts by between three months and close to four years – long after the contractual time frame of 13 months from the date of completion of the works. Contractors were owed a total of S$13.61 million for four months to 4.7 years after the last interim payments were made. MOE said it is working to issue the final accounts of 14 outstanding contracts by the end of this year.

People's Association (PA)

Thirteen grassroots organisations (GROs) under the PA did not obtain proper approvals for the award of contracts and variation for 25 purchases totaling S$619,900. Of the 25, 19 purchases were made by 10 GROs without approval, or approvals were only obtained after goods and services had been delivered. The remaining six were made by five GROs with approvals obtained from the wrong parties – people who were either not authorised or had lower approval limits. PA said it would step up training on procurement for the GROs.

WEAKNESSES IN IT CONTROLS

Ministry of Defence (Mindef)

Access rights to the ministry's electronic procurement system were not subjected to periodic review, while 41 of the 219 user accounts checked by AGO were not removed after they were no longer needed for periods between 53 days and more than 10 years. Mindef has enhanced its system to automatically remove certain roles when users relinquish their appointments.

Accounting and Corporate Regulatory Authority (Acra)

The agency did not activate a feature to log activities carried out under two privileged user accounts in the BizFile database server, enabling the accounts to enjoy unrestricted access and rights to modify business information. Acra has implemented a log management system to detect any abuse, exploitation and misuse of privileged database accounts in a timely manner.

LAX FINANCIAL CONTROLS

The Immigration and Checkpoints Authority (ICA)

The authority allowed a recreation club whose members were current or retired staff to use its premises to operate photo booths without charging rental, causing more than S$6 million in rental to be forgone. The revenue was used to fund ICA staff welfare activities and functions in an arrangement struck with the Ministry of Finance's approval more than 30 years ago. The club intends to use up the S$2.45 million in remaining funds to pay for the rental forgone.

People's Association (PA)

A grassroots organisation did not adhere to the Government's procurement principles of open and fair competition, transparency and value-for-money for the manufacture of street light-up decorations for its Mid-Autumn festival event in 2016 and Chinese New Year event last year. The contract value for the two tenders – awarded to the same overseas-based contractor – amounted to half a million dollars.

In organising last year's Chingay Parade, PA had allowed an officer to buy costumes and accessories overseas, and receipts amounted to S$142,200. AGO found that some of the cash sale receipts the officer submitted for reimbursement had "tell-tale signs which cast doubts on their authenticity". Allowing the officer to make purchases and payments unaccompanied by other staff exposed the PA to "risks of duplicate and inflated claims". In response, PA said it stopped all overseas direct purchases from April last year. Its preliminary findings are that the purchases and payments were for genuine purchases. The officer involved has left the organisation.

The association also did not properly manage cash gifts and assistance-in-kind (supermarket vouchers, food vouchers and groceries) to needy residents. Hence, there was no assurance that help was given only to eligible applicants. The PA said it reviewed the disbursements and confirmed that all funds were used for their intended purposes. It will set up safeguards to document the eligibility of recipients and standardise the evaluation process across GROs.

Maritime and Port Authority (MPA)

The MPA over-collected S$5.5 million in port dues from 4,618 vessel calls from 2014 to 2017 and under-collected S$5.87 million from 40 detained vessels that needed to pay concessionary port dues between 2011 and 2017. The AGO said MPA will be refunding the over-collection amounts, although it will waive the under-collection.

GAPS IN MANAGEMENT OF R&D GRANTS

Agency for Science, Technology and Research (A*Star)

The agency was slow in disbursing grants totalling some S$55 million and refunds amounting to S$630,000 by three months to two years. It will improve its processes to ensure the timely disbursement of grants and settlement of final accounts, and better verification of industry contributions.

National Research Foundation (NRF)

The NRF was lax in verifying requests to grant disbursements totalling S$52.2 million. In some instances, disbursements were made for items not allowed under the grant terms and conditions. These amounted to S$1.84 million, and NRF is in the process of recovering the incorrect disbursement. On top of that, NRF will start performing selective checks to verify that claims are accurate and fundable.