MOH rapped over $800m hospital

The Auditor-General's Office (AGO) has taken the Ministry of Health (MOH) to task for the way tens of millions of dollars were spent in the building of the $800 million Ng Teng Fong General Hospital in Jurong.

The 700-bed hospital was completed in 2015 - about half a year behind schedule.

The AGO's report on the latest annual audit of government finances criticised MOH for "lack of controls and inadequate oversight" of the project.

The ministry said yesterday it will strengthen its project oversight processes and management controls but there was no wrongdoing.

"There was no indication of fraud or corrupt practices which warrant further investigation, or deliberate wrongdoing by the persons involved in the projects," the ministry said.

MOH was among several agencies rapped by the AGO for lapses in controls over information technology (IT) systems, lack of financial controls, and inadequate oversight over large-scale development projects.

In MOH's case, the AGO found that the ministry had paid $4.08 million for supervisory staff without ensuring that they were needed. It was done despite MOH having already hired a contractor for $8.16 million to provide site supervisory services, the report noted.

When the AGO asked about it, MOH said it was "not aware" its agent had separately hired site supervisory staff.

It later told the AGO that there was no duplication as the contractor's staff number fell by five, which corresponded with the five the ministry had hired.

But this was incorrect. The AGO found the contractor had cut only three, not five, workers.

Also, it had hired six people, not five, resulting in a net increase of three workers.

The ministry also paid one of the three people, who was "supposedly reduced" from the contract, for about two years.

In fact, it was uncertain if it had to pay for the supervisory services after March 2015.

The AGO also flagged irregularities in seeking approvals when changes were made to the hospital contract. The changes involved $30.09 million.

It said: "The lack of the required level of checks increased the risk of fraud."

There was "no assurance that MOH had exercised financial prudence in the use of public funds" or that changes in the contract were scrutinised before they were approved, it said.

The AGO also found lapses in approvals for 40 changes to contracts of 10 other projects that involved $3.76 million.

Approvals were either not obtained, sought after work had started, or were submitted to the wrong authorities.

In some cases, approvals were obtained "before the relevant assessment and recommendations were made", the AGO said.

As a result, there are doubts on whether the changes were properly assessed, it added.

The ministry said yesterday that it will work to "improve the competencies of our officers through more structured training on public procurement procedures".

The AGO also found that the Social and Family Development Ministry did not track how its staff and vendors used the IT systems that run the Baby Bonus scheme and childcare and infant-care subsidy schemes, giving rise to the possibility of confidential information being leaked or data being corrupted.

It also found that the Economic Development Board gave out grants of $2.59 million for eight projects though information on them was inaccurate and incomplete.

The agencies have acknowledged the lapses and pledged to tighten their controls.

The Ministry of Finance said the public sector's system of managing public funds remains sound, but it acknowledged that there are areas where agencies can do better by strengthening financial governance.

"The public service is taking a concerted effort to address the issues identified," it said.

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