Public sector accounts watchdog lists steps taken to address lapses

The Public Accounts Committee (PAC), a parliamentary watchdog consisting of eight MPs, on Wednesday (Jan 26) released detailed observations from its review of the public sector report by the Auditor-General's Office (AGO) for the financial year 2020/2021.

"The committee recognised that public sector agencies took the AGO's findings seriously and have implemented improvement measures," said the PAC.

It asked individual agencies to address causes of their lapses and detail the follow-up actions taken. These are the highlights of the PAC's findings:

Accounting and Corporate Regulatory Authority (Acra)

The AGO had flagged weak controls over user accounts that had full access to the operating system of Acra's online filing and information retrieval system, BizFile+.

The Ministry of Finance informed the PAC that the root causes were oversight by an Acra officer; the authority's vendor not following procedural controls; and software incompatibility issues. Going forward, Acra will emphasise the AGO's findings in staff training programmes and incorporate advisories into compliance checklists among other measures.

Health Promotion Board (HPB)

About 341,000 fitness trackers not put to use for the HPB's National Steps Challenge resulted in $5.39 million of public funds being wasted. Some of the units had become mouldy and the warranties for all the excess trackers had expired at the end of 2021.

The Ministry of Health told the PAC that HPB had over-estimated demand for the trackers and pre-emptively topped up its stock.

Obsolete or faulty trackers have since been disposed of, while the working ones have either been used to replace and exchange for faulty trackers and those with expired warranties, or to support various companies in their health initiatives.

Moving forward, HPB will adopt smaller batches of initial and top-up buys, and monitor demand on a real-time basis. It has also started daily accounting for trackers at various distribution points, and will conduct a full stock count bi-annually.

Responding to the AGO's findings about lapses in the management of HPB's loyalty programme between April 2018 and June 2020, the statutory board said it took action to claw back the rewards from those who had made improper redemptions.

Some $6,300 worth of rewards had been paid for by HPB out of $14,900 worth of health points accumulated by 594 accounts belonging to people who have died. The board also lodged a police report over the fraudulent accounts which have been frozen.

HPB is exploring the integration of SingPass data for authentication and verification by the end of this year.

Health Sciences Authority (HSA)

The AGO had found that HSA had been buying required items like chemicals, laboratory devices and consumables on an ad hoc basis instead of aggregating its requirements and purchasing them through tenders.

The authority's total expenditure on small value purchases between April 2018 and June 2020 was substantial, at $8.02 million. There were also lapses in its outsourced IT contracts and IT application controls.

HSA has since established period contracts or framework agreements where feasible; tightened processes; stepped up controls and checks; and instituted proficiency courses and briefings for both staff and outsourced vendors.

Housing Board (HDB)

Housing grants totalling $405,000 were disbursed to ineligible applicants, and the AGO had found that quotations for some items could have been created or altered to give the impression that they were obtained from other suppliers.

HDB has since recovered grants disbursed to ineligible applicants, verified those who were eligible or correctly assessed for their grants, and requested additional documents from others. One applicant could not be contacted as at the end of last year.

Other steps taken by HDB include the establishment of procedures on income assessment and automated checks on declarations and eligibility where possible, by March this year.

For the irregularities in quotations, the root cause, according to the Ministry of National Development, was a supervisory lapse on the part of consultants and HDB staff. A police report has been made, and a demerit point system implemented to guard against any future lapses in diligence, among various measures.

Maritime and Port Authority of Singapore (MPA)

The AGO found several lapses and errors in a $430,000 tender for event and venue management services for a 2018 MPA event. The MPA officer in charge had also engaged in detailed discussions with the tenderer that was later awarded the contract, before the tender approving authority had made a decision.

The Transport Ministry told the PAC that a panel of investigation was appointed to scrutinise the past three years of tenders handled by the same project team. Action will be taken against officers found accountable for "weak supervision and leadership" and "poor-quality staff work", among other issues.

MPA has committed to improving both staff training and procurement policies and procedures through manuals, briefings, centralised processes and other initiatives.

Ministry of Education (MOE), Ministry of Home Affairs (MHA)

The AGO had called for improvements in both ministries' administration of facility management contracts. It had found supporting documents created or backdated to satisfy AGO's queries, and weaknesses in MHA's integrated logistics management system. Both ministries eventually made police reports on the possible fabrication or falsification of records.

MOE and MHA told the PAC that their lapses were due to people and process factors, including inadequate monitoring, poor or complete lack of documentation and overly prescriptive specifications, among other reasons.

Both ministries said they would strengthen oversight and step up checks.

MOE has held the relevant managing agents accountable while rectifying overpayments and underpayments made. It has also rolled out a mobile app for school personnel to report facility management-related faults.

For MHA, a task force was set up in June last year to propose enhancements to processes and map out training and learning opportunities for officers.

National Arts Council (NAC)

The NAC had been found to have lapsed in the rental management of its 37 arts housing premises, with 74 non-tenants using its spaces for activities unrelated to the arts.

The PAC was told that NAC was aware and supportive of tenants co-locating "closely-related" entities at the sites, as these entities help sustain and complement the main art practice. But there was no formal process to approve such entities.

NAC has since cleaned up these entities, issued a circular in July last year on the need to seek official approval, and instituted annual checks.

National Heritage Board (NHB)

The NHB had lapsed in record keeping and tender approval, with heritage items missing, bids not evaluated and purchases often made from the most expensive option.

The Ministry of Culture, Community and Youth (MCCY) told the PAC that limitations in IT systems were the root cause, with some parts of NHB still manually maintaining records. Physical objects have since been properly accounted for, records updated, and operating procedures improved.

NHB also engaged an external consultant in September 2019 to streamline its processes, and plans to upgrade its infrastructure for tagging and stock-taking by the end of FY2024.

The lapses in tender evaluation were attributed to inexperienced procurement staff. NHB has since set up a workgroup to improve future tenders, and established new procurement training and process frameworks.

National Library Board (NLB)

The AGO had found lapses in NLB's procurement of a digital film projection system worth $4.75 million. There was inadequate assurance that principles of value for money, fairness and transparency had been adhered to.

The PAC was told by the Ministry of Communications and Information that the NLB had formed an internal review panel, and identified weaknesses in duty of care on the part of officers involved in procurement, on top of gaps in certain stages of the procurement process.

NLB has also stepped up briefings, guidance and training for its officers, while strengthening its processes and identification of conflict of interest among other improvements.

People's Association (PA)

The PA's management of two large development projects, Our Tampines Hub and Heartbeat@Bedok, had been flagged by the AGO for lapses and possible irregularities. It led to the PA making a police report and suspending staff who may have falsified quotations and doctored documents.

The PAC was informed that staff oversight was mainly to blame, along with external consultants' lack of familiarity with government regulations.

Price fluctuations in contracts have been revised and standardised; contract variations reviewed and various processes formalised, MCCY told the PAC.

Among other measures, a task force has been set up to strengthen governance of Our Tampines Hub, and internal audit checks stepped up across all development projects starting from April 2022.

Public Service Division (PSD)

More than 9,000 possible erroneous medical and dental claims paid to ineligible officers or pensioners over a period of more than two years were administered by the PSD, resulting in the possible overpayment of around $500,000.

PSD told the PAC the lapses could be attributed to systems and records not being fully synchronised, as well as human error.

Human resource and payroll systems will be enhanced to automate updating and include controls to flag anomalies. PSD will also step up efforts to educate and train officers, and perform regular post-payment analytics on claims.

The PSD and Accountant-General's Department will look into the specific erroneous claims flagged by the AGO.

"For those which might suggest an intent to game the system, officers would be asked to explain and account for the claims, and stern action would be taken if there were attempts to be dishonest," the committee noted in its report.

Singapore Polytechnic (SP)

SP did not put up the required reports concerning two tenderers who had withdrawn their bids before the awarding of the tender.

The AGO had called such withdrawals a serious matter and grounds for debarment from being awarded government tenders for a period of time.

MOE told the PAC that the relevant SP officer had been unaware of the procurement debarment rules, which had "inadvertently" not been communicated to finance officers.

The polytechnic instituted a new process from July last year, where the office of the director of finance disseminates new finance-related circulars from the Government to all finance section heads at the beginning of each month.