Public Accounts Committee urges holistic solutions, stronger leadership to address lapses

WEAK governance that defeated existing processes and recurring lapses highlight the need for holistic remedies and the role of effective leadership in the management of public funds, the Public Accounts Committee said in its first report to Parliament on Wednesday.

In its review of the Auditor-General's reports for the two years ended March 2016, the eight-member committee also urged proper training for officers who handle public funds, and sharing of lessons and best practices across agencies.

The handling of changes to already contracted works appeared to be a recurring issue despite the existence of safeguards, the committee found.

For example, the Ministry of Culture, Community and Youth (MCCY) carried out changes to already contracted works before approvals were obtained in the fiscal year ended 2016. In the year ended 2015, the Jurong Town Corp (JTC) also failed to obtain approval for about 87 per cent of variations for the International Cruise Terminal before the variation works were carried out.

There was also a lack of assessment on whether costs were reasonable. The committee highlighted a consultancy fee related to the construction of the bin centre at the Victoria Theatre and Victoria Concert Hall redevelopment project, and fees related to the International Cruise Terminal.

There were also instances of inadequate financial controls, including oversight of external operators.

The Committee noted that the Land Transport Authority's (LTA) collection system at the Woodlands and Tuas checkpoints at the Malaysian border was not linked to the Immigration and Checkpoints Authority's (ICA) system, which may have resulted in undercollection of S$7 million, or 10 per cent, per year on average.

Nanyang Polytechnic was also highlighted as an instance in which a proper governance framework was not in place and in which there was a knowledge gap in understanding the proper rules and processes. For example, the school had allowed the Nanyang Polytechnic Education Fund's name to be used to solicit donations for a purpose that was not authorised under the fund and wrongly told donors that their gifts were tax-deductible.

The Ministry of Education also came under scrutiny for what was deemed to be inadequate monitoring of research progress at the universities.

The committee said that the agencies responsible for the lapses were taking steps to address the gaps, and urged the adoption of holistic solutions.

"Agencies should not introduce piecemeal measures that would result in more rules and procedures, which might increase bureaucracy and costs unnecessarily without addressing the fundamental causes of the lapses," the committee wrote.

The human factor was also addressed.

"Heads of agencies should set the tone at the top to ensure adherence to processes and controls as part of good governance," the committee wrote, and: "Public officers handling public funds need to be equipped with the relevant knowledge to carry out their duties effectively."

The committee also advised the Ministry of Finance (MOF) to improve the sharing of knowledge across the public sector.

"The Ministry of Finance has a key role to play in the sharing of learning points and best practices across public sector agencies, as well as providing guidance in the area of procurement and governance," the committee wrote.