The Business Times

Auditor-General lists govt agencies' lapses

Mismanagement of grants, wastage of resources among the sins report uncovers

Published Thu, Jul 17, 2014 · 10:00 PM
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[SINGAPORE] For more than two years, the Ministry of Health (MOH) doled out a total of S$64,000 in financial aid - to 99 dead Singaporeans.

The Inland Revenue Authority of Singapore (Iras) was hoodwinked by 11 "tourists" into paying them S$35,300 in Goods and Services Tax (GST) refunds.

These were among the lapses of government ministries and statutory boards in the 2013/2014 financial year, revealed yesterday in the latest report by the Auditor-General's Office (AGO).

Its mission is to audit and report on the accounting of public monies and use of public resources.

The 80-page report, the second by AG Willie Tan, was submitted to President Tony Tan Keng Yam on July 1 and presented to Parliament this week.

Many lapses were slip-ups in the administration of grants, schemes and programmes.

In MOH's case, the payments into the deceased persons' accounts arose from errors in death data, captured by an agent engaged to administer the Interim Disability Assistance Programme for the Elderly. The errors were rectified in December 2013; MOH has since sought a reimbursement from the agent.

As for the GST refund blunders, Iras said it will take action against the offenders and run more stringent checks in order to root out such fraudulent claims.

For FY2013/2014, Singapore's national auditor's inspections covered government financial statements, two government funds and 13 statutory boards, among others.

The Ministry of Defence (Mindef) was rapped for the improper management of land. It had sublet some land to a contractor for many years at a nominal rent of S$45 a year, instead of charging fair market value - even after the contractor was privatised in 2000, and had begun using the land for commercial activities beyond the sole purpose of providing services to Mindef. AGO said this meant Mindef was effectively providing a rental subsidy to the commercial entity.

The ministry has since inked a new agreement with the contractor for the use of the land for commercial activities at an annual rent of S$0.83 million.

The report also noted a few instances where the commitment of public funds was not justified or poorly managed, resulting in wastage.

One example came from the Agri-Food and Veterinary Authority (AVA), which was found to have spent S$152,800 on two projects in order to gain ISO (International Organization for Standardization) accreditation for its testing methods and facilities, only to realise later that the certification was unnecessary.

Mr Tan reserved his sternest rebuke for a National Parks Board (NParks) employee who had created and backdated documents to give the impression that they existed at the time certain transactions in question took place - when the documents were created essentially to satisfy audit queries.

Mr Tan said: "AGO takes a serious view of such actions, which hamper AGO in performing its statutory duties effectively and weaken the system of accountability." The Ministry of National Development, which oversees NParks, has said it will take disciplinary action against the officer.

The AGO report was not all name-and-shame; it also singled out five areas that public-sector entities could improve on - namely the administration of grants, commitment of public funds, administration of schemes and programmes, management of land and assets, and procurement.

Mr Tan said: "The irregularities and weaknesses do not necessarily reflect the general state of administration in the entities audited, but point to areas where improvement should be made in the accounting, management and use of public funds and resources."

Audit firm PwC Singapore agreed. Ng Siew Quan, its Internal Audit and Corporate Governance Leader, told The Business Times: "These irregularities and weaknesses may not be systemic, but more can always be done to tighten processes, systems, governance and regulations to ensure that public funds and resources are protected to the best of the government's ability.

"All systems are only as good as the people managing them, and while the tone at the top is crucial in setting the right risk culture of an organisation, this must be complemented by encouraging individuals at every level to do the right thing and raise concerns when they see standards breached. More often than not, the people in an organisation play a more important role than the hard controls and systems set up to govern them."

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