SINGAPORE: Fitness trackers worth more than S$5 million bought by the Health Promotion Board (HPB) were left unused, the Auditor-General's Office (AGO) said in its report released on Thursday (Jul 22).
The excess trackers purchased for the National Steps Challenge over five years from 2015 were found during AGO’s test checks in November last year. The trackers were given free to eligible participants who signed up for the challenge to encourage people to exercise more.
The AGO found 268,191 trackers during its checks. HPB carried out a full stock count in January this year, uncovering more such unused trackers – a total of 341,208 trackers worth S$5.39 million.
Each tracker cost between S$10.38 and S$24.90, depending on the model.
Some of the unused trackers had mouldy straps and watch faces. The two-year warranty for 65 per cent of the trackers had already expired, while the warranty for the rest will expire by December this year, AGO said.
"Excess trackers not put to use by HPB had resulted in a significant sum of public funds wasted over the last five years, as the usability of these trackers would deteriorate over time due to the expiry of warranty and technology obsolescence," the AGO said.
The AGO also said HPB’s processes were "inadequate" in ensuring that the movement of fitness trackers was properly monitored and the trackers properly accounted for.
The receipt and distribution of the devices involved manual processes and multiple external parties such as suppliers and event organisers.
“However, there was no proper process to centrally monitor and account for the movement and stock of trackers,” AGO said, adding that the records maintained were “fragmented and incomplete”. There was no periodic reconciliation with the stock on hand.
There was also no documentary evidence on the scope or results of the annual stock checks carried out by HPB at an outsourced vendor’s warehouse. AGO said that its test checks of the warehouse stock showed a shortfall of trackers compared to records maintained by HPB and the vendor.
Following AGO’s checks, HPB consolidated its records and found that there was an estimated shortfall of 17,909 fitness trackers worth S$720,000.
LAPSES IN HPB LOYALTY PROGRAMME ACCOUNTS
The AGO also found lapses in the management of HPB’s loyalty programme between April 2018 and June 2020.
The loyalty programme launched by HPB in 2017 allows members to earn and accumulate health points through an app which can then be used to redeem rewards from merchants. HPB would reimburse the merchants.
The lapses included control weaknesses in the creation and maintenance of loyalty programme member accounts, manual adjustments of health points and rewards and monitoring of suspension of accounts. These weaknesses could “expose HPB to the risk of individuals gaming the system”, AGO said.
Among the issues was the use of 594 loyalty programme accounts belonging to deceased people. These accounts were used to earn health points and redeem rewards, with 139 of the accounts created after the date of death.
A total of S$14,900 worth of health points were accumulated by these accounts, of which S$6,300 had been redeemed and paid for by HPB.
HPB has since blocked the 594 accounts and lodged a police report.
READ: 'Possible irregularities' found in records of several ministries, statutory boards: AGO report
"OVER-ESTIMATION OF DEMAND": HPB
In a statement on Thursday, HPB said it has taken steps to remediate the lapses and strengthen its processes.
The number of sign-ups in the National Steps Challenge programme grew more than five-fold from 156,000 sign-ups in Season 1 to 900,000 in Season 5, HPB said.
“There had been excess number of fitness trackers purchased for past seasons as a result of over-estimation of demand,” a spokesperson said.
This was due to the agency "pre-emptively" topping up its stock of fitness trackers each season based on interest from the public, which led to long wait times and queues from tracker collection.
AGO said in its report that HPB has begun to dispose of the excess trackers from the first three seasons of the National Steps Challenge as these were obsolete. In its statement, HPB said that of the 341,208 excess trackers, 120,000 were still functional.
Close to 48,000 have been used for replacements and exchanges of faulty trackers and those with expired warranties. “The remainder will continue to be allocated to replacements and exchanges as well as to support community partners, companies and other government agencies in their health and wellness initiatives,” HPB said.
HPB said it would be “more conservative” in its projections for future instalments of the programme, adding that additional purchases of trackers will be done only when excess bookings are received from participants.
The spokesperson said HPB has also improved its processes for monitoring the movement and stock of trackers.
The agency has implemented an automated process to monitor and manage users’ requests to update their health points and rewards under its loyalty programme, which has more than 700,000 users.
By September this year, user account suspensions will be automated, with regular reports generated for reviews. It also conducted a “clean-up exercise” to block the use of unauthorised accounts, such as those registered using the NRICs of deceased people.
“HPB is in the process of ascertaining the amount of overpayments for such unauthorised accounts and will take action to claw back the rewards from those who had made improper redemptions,” HPB said, adding that it takes a “serious view” of any fraudulent activities.