Grant overpayments in Auditor-General report are being recovered, says SkillsFuture Singapore
SkillsFuture Singapore had made overpayments of about S$4.22 million for grants disbursed between Apr 1, 2018 and Jun 30, 2021, said the Auditor-General's Office.
Office workers crossing a road in Singapore. (File photo: TODAY/Raj Nadarajan)
SINGAPORE: SkillsFuture Singapore (SSG) said on Wednesday (Jul 20) that it is recovering overpayments made to grant applicants and training providers, after such lapses were highlighted in the Auditor-General's Office (AGO) report.
The report, released on Wednesday, said that SSG had made overpayments of about S$4.22 million.
The lapses happened between Apr 1, 2018 and Jun 30, 2021, when SSG disbursed a total of S$1.93 billion in grants.
The lapses that AGO noted include inadequate checks for grant eligibility, insufficient checks by the SSG service provider on grant claims of training providers, and grants given to individuals and companies that were disallowed funding.
SSG also gave grants for trainees with overlapping attendance records for courses happening at the same time, and AGO said there were inadequate checks or supporting documents for absentee payroll funding.
It highlighted that S$2.59 million of grants were disbursed for 1,342 individuals and 282 companies which did not meet the eligibility criteria for grant schemes administered by SSG.
These include the Mid-Career Enhanced Subsidy Scheme and the SGUnited Skills and SGUnited Mid-Career Pathways – Company Training Programmes.
Some individuals and companies did not meet eligibility criteria such as age, citizenship, employment size and annual sales turnover.
Some of them had also wrongly declared to SSG that they had met the eligibility criteria, and the grants were disbursed as there was lack of independent verification, inadequate monitoring or lapses in checks by SSG and its outsourced service provider, said AGO.
Other lapses in grant management
Inadequate checks by service provider on grant claims of training providers
AGO found that there were inadequate checks by SSG’s outsourced service provider in ensuring that grants disbursed to training providers were for courses approved by SSG and were correctly computed, and that grant terms and conditions were complied with.
AGO’s test checks found overpayments totalling S$953,600 for eight grant disbursements, involving 1,494 individuals and a training provider.
Grants disbursed for individuals and companies disallowed funding
AGO found that SSG had disbursed a total of S$269,100 in grants and SkillsFuture Credit for 295 individuals and three companies which were disallowed funding or use of the credits by SSG.
Among other reasons, these individuals and companies were disallowed such funding due to investigations by government agencies for suspected fraud, or significant amounts of refund owed to SSG.
Grants disbursed for individuals with overlapping attendance records for synchronous courses
AGO’s data analysis on attendance records found 5,887 enrolments where the individual enrolled was found to have attended two or more synchronous course sessions for different courses at the same time.
Sychronous course sessions are sessions that require the participant to be present, physically or virtually, at a particular date and time.
As of Oct 1, 2021, a total of S$3.29 million in grants was disbursed for 4,904 of these enrolments.
Of the 4,904 enrolments, the overlapping course sessions for 4,719 (or 96 per cent) enrolments required the individuals to be physically present at different venues at the same time. AGO said these cases indicated a risk of error or abuse.
AGO also identified 212 enrolments - totalling S$95,500 - of the 4,904 enrolments, where the grant criterion of at least 75 per cent attendance would not have been met had the overlapping course sessions been taken into consideration for attendance computation.
SSG’s follow-up on 156 of the 212 enrolments confirmed that training providers had submitted incorrect attendance records for 38 enrolments.
Inadequate Checks/Supporting Documents for Absentee Payroll Funding
To help defray manpower costs incurred by employers when they send their employees for training funded by SSG, employers were given absentee payroll grants which were computed based on the employees’ salaries declared by the employers.
AGO’s data analysis found 5,858 grant disbursements where the employees’ salaries were significantly over-declared by 792 employers. A total of S$615,100 in absentee payroll grants was disbursed for these cases, of which S$393,700 could be overpayments due to the over-declaration of salaries.
AGO noted that SSG did not require employers to provide supporting documents, such as payslips for the salary declaration.
Grant eligibility was determined and payments were made based in part on declarations made by grant applicants and training providers, an SSG spokesperson said.
Some of these declarations were wrong or inaccurate, and not all were picked up by internal checks, said the spokesperson.
"Other errors also occurred during manual processing of grants, including those made by SSG’s service provider."
SSG said it has taken "immediate corrective action" and all cases highlighted by the AGO have been followed up on. For 93 per cent of the overpaid amount identified by AGO, SSG has reached out to the affected training providers, companies and individuals, to initiate reconciliation and recovery.
"Pending internal checks, we will reach out to the rest of the entities by the end of this month. All entities will be given enough time to check their own records and return any confirmed over-payment," said SSG.Â
The agency said it will also take more preventive measures to avoid future lapses.
Its new Training Grants System makes better use of government data, rather than declarations to determine grant eligibility, it said, adding that it will automate more manual processes.
It will also streamline business rules to rely less on conditions and criteria that need declarations and manual processing.Â
The spokesperson said that SSG has also strengthened its disbursement processes and controls.
SKILLS DEVELOPMENT LEVY
AGO also observed "laxity" in SSG’s enforcement of outstanding Skills Development Levy (SDL) collections and the estimated outstanding levies owed from 2015 to 2020 was S$43 million, as of April this year.
All employers are required to pay the levy every month for their local and foreign employees working in Singapore, and the funds are channelled to the Skills Development Fund to support workforce upgrading programmes.
The total amount of SDL collected from 2015 to 2020 was S$1.51 billion.
"SSG was tardy in its enforcement actions and did not put in adequate effort to conduct audits of employers which potentially owed significant amounts of SDL," the spokesperson said.
When employers do not pay the levies, SSG sends mailers to remind them and conducts audits, depending on the estimated outstanding amounts.
AGO noted that the sending of mailers was not effective in collecting the levies owed.
For employers which had an outstanding levy above a certain amount and did not respond to the mailers, SSG was supposed to send them reminder letters and calls.
But AGO found that there were "long gaps", as long as 17 months, between mailers, reminder letters and follow-up calls when each action should have been taken in 35 days, based on SSG’s standard operating procedure.
SSG did not put in adequate effort to conduct audits of employers which potentially owed significant amounts of levy, AGO said.
SSG was supposed to select new audit cases on a weekly basis. But from November 2016 to March 2020, a period of about four years, it only selected five employers for audit.
According to SSG, this was because it wanted to focus on completing its audit backlog of 55 employers.
By January this year, SSG had completed the audit of 37 of the 60 employers and collected a total of S$1.11 million. The remaining employers were eventually not audited due to various reasons such as being deregistered or becoming insolvent.
AGO also noted that SSG did not include public sector employers in its enforcement actions, a legacy from when it was under then Singapore Workforce Development Agency.
But AGO found that as of April 2022, the total outstanding levy for public sector employers for the period 2015 to 2020 was estimated at S$3 million.
SSG has since informed AGO that it now audits public sector employers and has tightened enforcement on them. The SSG spokesperson said on Wednesday that all public sector agencies have paid in full their estimated underpayments.
The variance between the estimated SDL payable and the actual payments has fallen from 18 per cent of levy collected in 2008, to the current 3 to 4 per cent, said SSG.
"However, SSG acknowledges that a more effective system is needed to follow up on variances between our estimates of SDL due, and what companies actually pay, and more needs to be done to reconcile the remaining gap," it said.
"We have taken immediate action to address the existing variances in our estimates of SDL due, and what companies had actually paid."
It added that the variances may not all be due to actual underpayments by employers. They may also be because of employers using an updated set of employee data at the point of SDL payment.
"SSG has initiated the reconciliation process with the affected employers," it said.
It highlighted improvements in its processes including more timely payment reminders to employers, and more decisive punitive action on "the few recalcitrant employers who do not pay the outstanding levies".
