SINGAPORE: The Public Accounts Committee has urged some ministries and public agencies to address several recurring lapses across different public sector agencies, as observed in the Report of the Auditor-General for the financial year 2018/19.
These recurring lapses were in information technology (IT) controls, procurement and contract management and the management of social grant programmes, said the committee in its report on Friday (Jan 17).
At least two cases, concerning irregularities in quotation documents, were reported to the police.
“There is a need for the public sector to address the recurring lapses and basic mistakes,” said the Public Accounts Committee, adding that similar concerns were raised by the Auditor-General’s Office in past reports.
The lapses, if not addressed, may “compound” over time, weakening the "governance and accountability over public funds and resources", it added.
WEAKNESSES IN IT CONTROLS
Some of these lapses were in IT controls. These included inadequate monitoring of privileged users’ activities in IT systems and lapses in the management of user access rights. In particular, more attention should be paid to smaller agencies and the area of third-party management, said the committee.
The ministries involved in these lapses were: The Ministry of Defence (MINDEF), the Ministry of Education (MOE), the Ministry of Finance (MOF), the Ministry of Manpower (MOM) and the Ministry of Culture, Community and Youth (MCCY).
For example, MINDEF's IT vendor employees were granted unrestricted read-access to personnel and payroll information on its Enterprise Human Resource system. They could access 73 types of information for which the ministry required controlled access to be in place, and there was no review of access log records to the information.
In response, MINDEF said it had assigned access rights to IT vendor staff based on job scope since July last year. Since May, it had also conducted weekly log reviews of access by vendor staff members.
Based on checks on past access since 2014, MINDEF found there had not been any unauthorised or excessive access.
LAPSES IN PROCUREMENT, CONTRACT MANAGEMENT
The committee also noted lapses in procurement and contract management, including basic mistakes in the evaluation of tenders and quotations such as accepting tender documents after the tender had closed.
The report emphasised the need to strengthen “process and leadership accountability” in this area.
The ministries involved in these lapses were: MCCY and Ministry of Social and Family Development (MSF).
For example, it cited weaknesses in financial governance of the National Gallery Development Project, noting there were waivers of contractual provisions with “significant financial implications” by the National Gallery Singapore without due scrutiny by MCCY, its supervising ministry.
These financial implications involved an amount of S$13 million.
MCCY acknowledged that improvements were needed in its oversight of the National Gallery Singapore, and that there were lapses in documenting the waiver of contractual provisions.
However, the committee said MCCY’s focus was to ensure the construction project was completed on time and within the approved budget, while it should have also overseen areas such as contract variations and waivers.
“In this regard, the committee would like to stress the point that the issue is not just about spending within the budget but also whether the project could have cost less, given the significant amount of public funds involved,” it said.
The lack of a robust financial governance framework for the National Gallery Singapore project put the project at a higher risk of poor management and fraud, it added.
“While MCCY had not uncovered any fraud, this should not be taken for granted.”
IRREGULARITIES NOTED IN QUOTATIONS, CASE REPORTED TO POLICE
The committee also said it had sought an explanation from the Ministry of National Development (MND) on “irregularities” noted in quotation documents submitted by Urban Redevelopment Authority’s (URA) contractors.
“The committee noted that the case had been reported to the police and asked MND on the interim measures that the URA was taking to ensure that similar issues do not arise for other projects,” it said.
According to the Auditor-General's report released last year, the Auditor-General's Office (AGO) had carried out test checks on contract variations involving star rate items for one of URA's infrastructural projects.
Star rate items refer to items for which rates are not listed in the contract and require three quotations from different suppliers.
The checks revealed irregularities in some quotations submitted by a contractor.
URA had awarded the contract for an infrastructural project to a contractor and appointed a consultant to manage the project.
The contractor would obtain quotations from suppliers and submit them to the consultant, who would use the quotations to estimate the cost of the variation works and assess if the payment claims for the star rate items were "reasonable" and reflective of fair market prices.
AGO's test checks revealed irregularities in four out of 17 contract variations involving star rate items approved between June 2017 and September 2018.
It also had concerns over the authenticity of nine of the 16 quotations obtained for star rate items for four contract variations.
The nine quotations were submitted to the consultant, with the total estimated value of S$55,000.
"While these variation works have not yet been paid, AGO is concerned that these quotations may be used to assess the reasonableness of payment claims for star rate items by the contractor," AGO wrote.
URA has since informed AGO that it has lodged a police report on the matter and will ensure a "thorough, independent re-evaluation" of the value of the variation works in question.
Other lapses included inadequate checks on disbursements made by the Ministry of Health (MOH).
These errors included claims made for deceased recipients, where voluntary welfare organisations had provided meal delivery service without potentially being aware their clients had died.
Overall as at the end of last year, MOH said it had verified 2,386 out of 2,669 patient records, of which about 67 per cent (1,597) had errors. The errors consisted of over-disbursements involving a total of S$630,000 and S$500,000 in under-disbursements.
AUTOMATION TO REDUCE HUMAN ERROR
To address weaknesses in IT controls, the Smart Nation and Digital Government Group will implement centralised systems to automate IT tasks and reduce human error, said the committee.
It asked the group to consider making greater use of intelligence/analytics to derive insights and flag anomalous behavior.
Across Government bodies, the Ministry of Finance is also strengthening procurement and contract management through policy reviews, structural improvements and developing capabilities.
It has implemented “procurement sandboxes” for agencies to try alternative approaches to procurement and contract management practices. It has also appointed specialist agencies to provide advice to other agencies in specialised areas of procurement.
AUDITED AGENCIES COMMITTED TO TAKING REMEDIAL ACTION
The committee also noted that the audited agencies took the findings by the Auditor-General’s Office seriously and were committed to remedying their actions.
It also emphasised the need for the consistent implementation of financial policies and procedures, the need for “clear accountability and ownership of actions” and an avoidance of unnecessary rules and complexity in public sector work processes.
“Public sector leaders have to set the right tone at the top and ensure that officers adhere to the principles of governance and accountability,” said the committee. “This requires an on-going, continuous effort.”
The Public Accounts Committee is chaired by Ms Jessica Tan Soon Neo while Mr Ang Hin Kee, Mr Ang Wei Neng, Mr Liang Eng Hwa, Dr Lim Wee Kiak, Mr Leon Perera, Ms Tin Pei Ling and Mr Zainal Sapari are members.
Editor's note: A previous version of this story cited the wrong case from the AGO's report regarding the irregularities in quotation documents by URA contractors. We apologise for the error.