SINGAPORE: The Health Ministry was correct to say the Auditor-General Office’s (AGO) report for the financial year 2016/2017 did not indicate “fraud or corrupt practices which warrant further investigation”, said Senior Minister of State for Finance Indranee Rajah on Monday (Oct 2).
She was responding in Parliament to a clarification by Workers’ Party Member of Parliament (MP) Png Eng Huat. Mr Png had questioned if the Ministry of Health (MOH), in its statement issued in July, could interpret the report as an “endorsement” that there is no fraud, as it is not forensic in nature.
The AGO report took MOH to task for inadequate oversight and weaknesses in the management of development projects under the ministry. For example, the ministry paid more than S$4 million for site supervisory staff for the Ng Teng Fong General Hospital building, but it did not verify the need for the staff, or whether the cost was of a reasonable amount.
It also made changes to contracts without approval, with changes to some projects made after they were completed or had started.
“The AGO report only highlights lapses – it is a selective audit. As such, the AGO report, when it came out, the language they used was also quite similar to what was also used previously and what we encountered before,” Mr Png said.
“It’s not a forensic thing, so no ministry should take for granted that because it is not mentioned that there is no fraud, that there is no fraud and that it does not warrant any further investigation.”
But Ms Indranee said Mr Png had possibly “misunderstood the nature of an audit”.
“An audit will highlight or precipitate a forensic enquiry if there is reason to do a forensic enquiry,” she said.
“So if you go in, and you find there is a conflict of interest – for example, payment related to third parties or if your system as a whole enables the same person to approve a payment, submit a request for payment and sign a cheque for payment – that would require a forensic investigation.
“But if you go in and you find that there is, in MOH’s case, a possibility of overpayment which actually has not even occurred, and you point it out and you can rectify it and if the nature for it is because I have explained earlier, human error, negligence or non-compliance – that in itself does not trigger a forensic audit.”
FORENSIC INVESTIGATION NOT NECESSARY: INDRANEE
Ms Indranee said one has to look at the nature of the lapse – whether it requires a “further and deep investigation”. She said that the financial statements of the Government were found to be “fair and accurate” as well as reliable.
The second part any audit would highlight is if the rules and processes are adequate and have been complied with.
“In this case, it would appear that the rules and processes are adequate but in some cases, they were not complied with, that does not necessitate a forensic investigation. So it is quite correct for MOH to say that the audit did not in this instance disclose evidence of fraud,” Ms Indranee said.
Mr Png also asked if the AGO would direct all the entities in the report to investigate improper payments made and determine the amount of money to recover.
Ms Indranee said it was important to note that there was no indication in the report of payments due to “fraud, misfeasance or dishonesty”. She said the cases highlighted in the report concerned overpayments made without prior approval, and they arose as a result of human error, negligence and a failure to follow established procedures.
She said the agencies highlighted in the report are taking “prompt actions to recover” any amount that might have been paid out in error. For example, the Singapore Corporation of Rehabilitative Enterprises had recovered the overpaid amounts, as noted by the AGO.
Ms Indranee said the Economic Development Board had also recovered the amount in the two cases of overpayments, while the Ministry for Social and Family Development is also taking “corrective actions to make good under-reimbursements and to recover over-reimbursements”.