SINGAPORE: The Auditor-General’s Office (AGO) flagged lapses in how public agencies manage operations, make procurements and manage facilities management contracts in its annual report released on Thursday (Jul 22).
The report for the financial year 2020/2021 covered all 16 government ministries and eight organs of state, as well as 11 statutory boards, four government-owned companies and two other accounts – the Financial Sector Development Fund and ASEAN Cultural Fund.
Public entities singled out for lapses included the Public Service Division (PSD), the Health Promotion Board (HPB), the People’s Association (PA), the Maritime and Port Authority of Singapore (MPA) and the Housing and Development Board (HDB).
AGO also conducted a thematic audit of facility management contracts managed by the Ministry of Education (MOE) and Ministry of Home Affairs (MHA) and found that improvements were needed.
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OVERPAYMENT OF MEDICAL BENEFITS
PSD’s management of medical and dental benefits for the civil service was flagged under lapses in operations management and weaknesses in controls.
AGO estimated a net possible overpayment of S$494,600 in benefits by the Government, spread across about 9,500 possible erroneous claims between January 2018 and March 2020.
These included claims paid to ineligible officers and their dependents due to their entitlement records not being updated in IT systems, erroneous Medisave contributions and claims paid for expenses at medical institutions that were not approved.
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PSD and the Accountant-General’s Department (AGD) had informed AGO that the claims system was designed on a “self-declaration honour-based approach”, stated the report.
Both agencies told AGO they would strengthen governance through the implementation of a new human resources and payroll system later in the year.
For HPB, the Auditor-General highlighted wastage from more than 340,000 excess fitness trackers for the National Steps Challenge, valued at a total of about S$5.39 million.
Under procurement and contract management issues, the Auditor-General highlighted PA’s lapses in adjustments for price fluctuations for the construction of a development.
“For example, PA had capped the adjustment for concrete and steel enforcement at 70 per cent of the total price fluctuation of the materials. This was not in accordance with Government’s instructions to adopt full price fluctuations,” stated the report.
PA responded that it was working with a consultant to recalculate the price fluctuation adjustments of materials in the construction of Our Tampines Hub, and seeking legal advice to recover the appropriate sums.
AGO also observed weaknesses in management of contract variations.
In a statement, PA said it had taken immediate steps to review the management of the contracts at Our Tampines Hub and Heartbeat@Bedok, address the lapses and initiate rectification of any overpayments or underpayments.
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For MPA, the Auditor-General noted that an officer had engaged in “detailed discussions” with a tenderer to make significant changes to its proposal, and also informed the tenderer to start work before the tender award had been decided on.
FACILITIES MANAGEMENT CONTRACTS
In a thematic audit of selected facility management contracts managed by MOE and MHA, the Auditor-General found that their practices needed improvements in a number of areas.
For example, MOE could consider further aggregating procurement services that were commonly used by schools, said AGO.
“This may yield better value for money through economies of scale and reduce procurement administration in schools.”
For MHA, there was a need to strengthen its oversight of contractors’ compliance with contractual requirements and ensure contract variations were put up for deviations from these requirements, said AGO.
The Auditor-General also highlighted some good practices, including MOE’s strong focus on leveraging technology to improve productivity, and MHA’s efforts to build up facilities management capabilities in the Home Team.
In separate statements, MOE and MHA said they had taken steps to address the lapses identified by AGO.
WEAKNESS IN IT CONTROLS
Weaknesses in IT controls were observed at the AGD and the Accounting and Corporate Regulatory Authority (ACRA) over the management of the most privileged operating system (OS) user accounts.
“Any unauthorised activity carried out using the most privileged OS user account or ‘root’ privileges could compromise the respective servers and affect the processing and recording of financial transactions in the servers,” said AGO.
AGO also flagged possible irregularities in records provided by the Ministry of Culture, Community and Youth (MCCY), MOE, MHA, HDB and PA.
MOE, MHA and PA have since said that police reports were lodged over the possible irregularities.
Overall, AGO singled out three areas that public entities should pay more attention to: Oversight of vendors for outsourced services, data analytics to detect anomalies in straight-through processing of financial transactions and proper records management.
“AGO’s audits serve to enhance public accountability and help strengthen the financial governance of public sector entities,” said Auditor-General Goh Soon Poh in the report.
“I am pleased to note that the public sector entities audited by AGO take the audit observations seriously and are committed to address the lapses and weaknesses. AGO will follow up with them on their remedial actions.”