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Areas for improvement in MOM, HPB and SLA processes during COVID-19 pandemic flagged in Auditor-General report

AGO noted that while MOM, HPB and SLA had implemented several good practices to facilitate a timely response to the emergency situation and to reduce costs for the Government, there were areas where controls could be improved.

Areas for improvement in MOM, HPB and SLA processes during COVID-19 pandemic flagged in Auditor-General report

The Treasury, where the Public Service Division is headquartered. (Photo: Wikipedia)

SINGAPORE: The Auditor-General’s Office (AGO) on Wednesday (Jul 20) highlighted instances of inadequate controls and checks by the Ministry of Manpower (MOM), Health Promotion Board (HPB) and Singapore Land Authority (SLA) in relation to COVID-19-related procurement and expenditure. 

These areas for improvement were flagged in the AGO’s audit report of public agencies in Singapore for the year 2021/2022, which also highlighted that MOM, HPB and SLA had implemented several good practices to facilitate timely responses to the emergency situation and to reduce costs for the Government.

The audit covered all 16 Government ministries and eight organs of state, as well as 10 statutory boards, four government-owned companies and two other accounts. 

The AGO has issued unmodified audit opinions on these financial statements. 

“This is an independent verification that the Government’s accounts are prepared in accordance with the law and give a true and fair view of its overall financial position,” said the Ministry of Finance (MOF) in a separate statement. 

AGO added that it also carried out selective audits of four statutory boards and three Government funds whose financial statements were not audited by AGO. Selective audits involve test checks on selected areas for financial irregularity, excess, extravagance, or gross inefficiency leading to waste.


A thematic audit on selected pandemic-related procurement and expenditure at MOM, HPB and SLA showed that they incurred a total of S$1.51 billion on spending related to manpower services, accommodation facilities and meal catering during the audit period from January 2020 to March 2021. 

AGO noted that the three authorities “generally had in place” processes and controls across the four stages of procurement and contract management: Planning and establishing needs, procurement and contracting, managing contracts, as well as the closure or renewal of contracts. 

“Nonetheless, there were areas where controls could be improved,” added AGO in its audit observations.

The observations included lapses in the evaluation of contractors’ proposals and assessment of price reasonableness, as well as discrepancies and omissions in submissions to the approving authority for contract award.

In addition to delays in obtaining approvals for contract awards, there were also weaknesses in payment processes such as inadequate checks on the validity of payments, discrepancies in payment claims and a lack of supporting documents for payments.

AGO also pointed to a need for MOM, HPB and SLA to improve on the documentation of assessments.

The Finance Ministry said the heads of the agencies concerned have reviewed each case to identify the root cause for the lapses and that they are taking steps to enhance their capabilities, processes and systems. 

“The relevant agencies have initiated remedial steps, such as to recover excess funds disbursed and strengthen the management of contracts. We will also continue to share good practices to improve standards in public agencies," it added.

MOF noted that the COVID-19 pandemic was an “extraordinary period” for Singapore and its public officers. 

“Public agencies were agile in shifting from their pre-pandemic roles to new emergency roles and had to scale up their operations significantly and swiftly,” said the ministry.

This includes HPB increasing the number of swab personnel, SLA managing premises that were used as COVID-19 facilities and MOM supporting the management of dormitories and the well-being of migrant workers. 

“The Auditor-General’s Report noted that SLA, MOM and HPB had in place the necessary policies and processes. Good practices were mentioned, including structured processes for managing conflict of interest, contractor debarment checks, periodic reviews of contracts in response to changing requirements and measures to reduce overall expenditure," said MOF.

“Areas for improvement were also identified, including how the agencies could have done better in the evaluation of proposals, obtaining relevant approvals for contracts and implementing payment processes."

“The Public Service will take on board the lessons learnt, and enhance our preparedness for future emergencies," added the Finance Ministry.

Learning points for the public sector

The Auditor-General has set out three learning points for the public sector. 

1. Establish a reasonable level of governance and planning arrangements for use in an emergency

Such arrangements can be established during peace time for activation during emergencies. Areas where agencies would benefit from greater central guidance are:

  • Evaluation of contractors (including price reasonableness of their bids) for goods or services procured through emergency procurement
  • Contracting for flexible and scalable quantities as demand is often unpredictable in an emergency
  • Establishing the minimum terms and conditions that should be included in contracts and agreements to safeguard the Government’s interest
  • Establishing the extent of documentation required for key decisions and transactions

2. Affirm and support the development of critical corporate functions such as procurement, finance and human resource

  • Frontline and operational functions in a crisis situation should be complemented by effective corporate functions
  • Central agencies may wish to consider how critical support functions such as procurement, finance and human resource can be better organised at the whole-of-Government or cluster/agency level, and what detailed guidance to give agencies in these areas

3. Maintain appropriate records and document key decisions and transactions

  • It is important that there is sufficient documentation on key decision-making processes and transactions
  • For example, the basis for directly contracting with a particular contractor, assessment of price reasonableness, and satisfactory receipt of goods and services
  • It will also be useful to provide guidance to agencies on the types of supporting documents needed and the extent of checks required

MOM, HPB and SLA said in a joint statement that they acknowledge the observations made by the AGO in its audit and that steps have been taken to rectify the lapses and prevent recurrence.

For instance, MOM has fully recovered about S$150,000 of overpayments and made good on about S$51,000 of underpayments, said the statement.

After the audit found that HPB had overpaid 51 staff members S$580,000 due to delays in the keying in of termination dates into the human resource or finance system, the board has been clawing back the outstanding overpayments. 

The recovery process is ongoing, with more than 62 per cent of the sum recovered as of Mar 31 this year.

SLA has also reviewed the list of potential overpayments observed by the AGO and after conducting a payment verification exercise, has confirmed that there were no overpayments for most of the highlighted contract sums. 

“SLA has taken the appropriate actions to recover about S$25,000 of overpayments, and the total potential overpayment for remaining contracts that are still being reviewed is approximately S$10,000,” the statement added.


In its other audit observations, AGO also noted lapses in the management of grants by SkillsFuture Singapore (SSG), resulting in estimated overpayments of S$4.22 million. 

“SSG agreed on the need to improve its grant administration system and processes to prevent lapses,” said the report. 

AGO added that SSG also noted from the audit that its business rules were not well-defined or correctly configured in certain scenarios. Such scenarios include individuals attending multiple courses with overlaps in attendance timing, and disbursements made to individuals and companies that were disallowed funding. 

“SSG would embark on an exercise to regularise those rules to ensure consistency and robustness in its grant disbursement,” said AGO.

A spokesperson for SSG said the lapses noted occurred between Apr 1, 2018 and Jun 30, 2021. 

"Grant eligibility was determined and payments were made based in part on declarations made by grant applicants and training providers. Some of these declarations were wrong or inaccurate, and not all were picked up by internal checks," said the SSG spokesperson.

Other errors also occurred during the manual processing of grants, including those made by SSG’s service provider. These were the primary causes of the lapses observed by AGO, said the spokesperson.

SSG has since taken "immediate corrective action" and all cases highlighted by AGO have been followed up on. 

The spokesperson added that SSG will take more preventative measures to avoid future lapses. This includes reducing reliance on declarations and manual processing, as well as strengthening disbursement processes and controls.

Source: CNA/zl(mi)


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