Police investigating possible irregularities in PUB construction contract: AGO

SINGAPORE: The police are investigating possible irregularities found in a construction contract for national water agency PUB.

The Auditor-General's Office (AGO) report for the financial year 2024-2025, which was released on Tuesday (Sep 9), found possible irregularities in quotations provided for "star rate" items. These are items with rates not listed in contracts.

In its audit, AGO had concerns over the "authenticity of the quotations provided and whether value for money had been obtained for the items".

PUB then made a police report to investigate if there were any fraudulent practices in the quotations provided to the agency.

It said in its media statement that it acknowledged the lapses found in the AGO report and would continue to review and strengthen its system of managing procurement and operations.

IRREGULARITIES IN QUOTATIONS

AGO's report found possible irregularities in the quotations provided for 23 out of 25 star rate items.

These totalled S$148,900 (about US$190,800) or 94 per cent of the total value of star rate items test-checked under a construction contract for waterscape works.

The contract was managed by a consultant engaged by the agency.

PUB said that it had put in place measures to manage star rate items, including procedures on how star rates should be evaluated, as well as supervisory checks to approve the rates.

However, the agency recognised that it may not be straightforward to identify irregularities immediately, "especially for more complex cases or instances where signs are not obvious".

POOR MANAGEMENT OF CONTRACTS FOR WATER QUALITY ANALYSERS

The audit report also highlighted issues regarding PUB's maintenance services contracts covering its water quality analysers at three private sector-operated desalination plants.

Under a public-private partnership arrangement, each water plant is operated by a private-sector partner, which would install and maintain a set of analysers to measure water quality. PUB also installed its own water quality analysers at these plants to countercheck the partners' water quality readings, which enable it to ensure that things are in order before making payments.

AGO found indications of poor management of these contracts. For instance:

• The system to alert PUB when analyser readings reach specified limits was not working
• The scope of work in the contracts was not comprehensive
• An extended time was taken to rectify the loss of PUB analyser data

PUB acknowledged that the scope of the contracts should have been more comprehensive to include maintenance and troubleshooting of data and alert-related systems.

At two of the plants, PUB's analysers had technical issues that resulted in the malfunctioning of the SMS alert systems, as well as gaps in data transfer from the analysers over a 12-month period.

The agency became aware of the issues in mid-2023 and took action to resolve these and to develop longer-term solutions.

The PUB analysers at the two plants were eventually restored late in 2024. Since January 2025, it has linked all the analysers to its internal system directly, enabling the automation of alerts and data transfer.

It assured the public that the water quality at the desalination plants was not compromised at any point in time.

PUB's water quality analysers were installed to provide extra precautionary checks as further safeguards on water quality, it said.

LAPSES IN MANAGEMENT OF SUPPLY CONTRACTS

AGO also found lapses in PUB's contract management for the supply of biocide and chemicals.

Biocide is primarily used to control midges – small insects that exist in and near water bodies – at Singapore's reservoirs and waterways, while the chemicals are for water disinfection.

The audit showed that:

• PUB made payments for deliveries even though the certificates of analysis submitted did not comply with contractual requirements
• There was inadequate monitoring of stock levels
• There was a lack of independent testing as external laboratory testing was done

PUB said that its standard operating procedure requires purchase orders to be raised when biocide stock reaches a "specific trigger level". 

However, there were lapses during the process of monitoring and verifying the stock levels of biocide, which resulted in delayed purchase orders. It then incurred an added cost of about S$300,000 to replenish the stocks quickly.

It has since automated the monitoring of biocide stocks, where alerts are sent when stocks fall below the trigger level.

For payment to contractors without verifying the certificates, PUB said in its statement that it had conducted thorough checks on the biocide and chemical contracts and confirmed that the quality of the stocks it had received met its requirements. 

It has processes to ensure the quality of the biocide and chemicals used in its operations, which include testing by accredited laboratories, the agency added.

It has since tightened its procedures for conducting checks on the certificates of analysis. 

It added: "Disciplinary actions have been taken against PUB officers accountable for these lapses."

ALTERATION OF RECORDS

For the biocide supply contract, AGO found "tell-tale signs" of possible irregularities between the softcopy and hardcopy of the certificates of analysis.

These included changes to the softcopy that showed a different version number, format and information from the original hardcopy provided by the contractor for each delivery.

These sought to give the false impression that checks on the active ingredient level had been performed by the accredited laboratory, and that PUB had accepted goods that met its contractual requirements.

AGO said that it takes a serious view of any furnishing of false information and such actions cast doubt on the authenticity of the other documents submitted for audit and impede its work.

In its statement, PUB said that its officer had asked the contractor to update the previously sent certificates, to give the false impression that the full information had been provided on the biocide's active ingredient level and that the contractual requirements had been met. 

"PUB does not condone the alteration of documents furnished for audit and expects our officers to conduct themselves with integrity and professionalism. We have carried out and completed our internal investigation and taken disciplinary action against the officer involved," it added.

"We will continue to review and strengthen our management of processes and procedures, and exercise greater oversight over our consultants and contractors. 

"Comprehensive training sessions and workshops are conducted to communicate established standard operating procedures to our officers, ensuring that they are competent in fulfilling procurement requirements to prevent recurrence of the lapses highlighted."