Grassroots leaders’ good intentions the root cause of financial lapses: Lim Swee Say

Grassroots leaders involved in financial irregularities were only trying to help, said the deputy chairman of the People’s Association (PA), Lim Swee Say, in Parliament on Monday.

“We can fault (grassroots volunteers) for their non-compliance of financial procedures, but please do not doubt them in their passion and commitment in always doing their best for the community,” Mr Lim said.

He was responding to questions from Workers’ Party (WP) Member of Parliament (MP), Png Eng Huat, and Non-constituency MP, Lina Chiam, on the findings by the Auditor General in its report which was released in July.

The AGO had found numerous incidents of non-compliance with financial rules among the ministries and statutory boards it audited.

Among the most notable were those involving Nparks, which had awarded contracts valued at more than S$20 million without calling for open tenders; and the PA, where the AGO had conducted test-checks on about 115 grassroots organisations (GROs) under the PA umbrella.

Out of the GROs test-checked by the AGO, 30 per cent were found to have financial or accounting irregularities.

Nonetheless, Mr Lim said, “I can say with confidence there is no irregularity at the system level.”

Instead, he said the root cause of these lapses were the “good intentions” of the grassroots leaders.

Mr Lim explained this by raising various examples of how grassroots leaders were “actually doing their best to serve the interests of the residents and meet the urgent needs of the community.”

Mr Lim, who is also the Minister of Manpower, related how grassroots leaders had gone “all around Singapore” to look for face masks when the haze hit the island in 2013.

This was after a community hospital had appealed to the GROs for air purifiers for patients who were being housed in the hospital’s non-airconditioned wards.

When they found a “small store which had limited stock”, the grassroots leaders decided to purchase the masks without first calling for three tenders, which is what is required by the rules.

“Madam Speaker, is this a case of non-compliance of financial procedures and rules? The answer is yes,” Mr Lim said. “Is this a case of grassroots leaders and volunteers compromising the interests of the community? The answer is certainly no.”

As for the chairman of the Admiralty Citizens’ Consultative Committee (CCC) who was found to have been involved in the award of a contract worth $32,000 to a company in which he was also a senior management executive, and also for writing and approving reimbursements cheques to himself worth $114,000, Mr Lim said, without identifying the chairman, Mr Tonic Oh:

“Although there was no evidence of dishonesty, the CCC chairman has taken personal responsibility for these lapses and resigned from his position.”

Mr Lim disclosed that the improprieties involving Mr Oh included money for a funeral wake which a needy family required immediately.

“There was no supporting documents for the claim but the amount given was witnessed by a few volunteers,” the Straits Times reported Mr Lim as having told the House.

Two other claims had receipts to justify the reimbursement, but out of another four claims by Mr Oh, only one had supporting documents.

Also, 13 tenancy contracts amounting to $3.67 million were awarded by the GROs without competition.

Despite their “good intentions”, Mr Lim said, this went against financial rules, which required them to obtain approvals, which the GROs involved did not.

Turning to the AGO report itself, Mr Lim said the last time the PA received an “adverse opinion” rating from its auditors was in 2012.

Previously, the PA’s own auditors had given it “adverse opinion” for at least 10 years prior to 2012, before the GROs’ accounts were included in the PA’s financial statements.

Since consolidation of the accounts of all the 1,800 GROs under the PA in 2013, the PA’s financial statements have received “clean opinions” in FY 2013 and FY2014, Mr Lim said.

He said, however, that the PA “cannot completely eradicate human error when it comes to financial governance.”

Mr Lim added that since the AGO report, the PA has set up a “Grassroots Finance Review Committee” to review its financial and procurement rules for grassroots organisations.

Mr Lim noted that the committee – made up of three grassroots leaders from the PA – “consists of members with standing and expertise.”

However, Mrs Chiam, who filed an Adjournment Motion on the AGO report, said an independent committee should be appointed to look into the matter instead.

She said “the litany of financial lapses committed by the [PA]” has raised many issues, among them were:

First, that it has been more than a decade since PA’s Grassroots Organisations (“GROs”) have been audited. This was because the PA has not produced the financial statements of the GROs for audit, and has only done so in the financial year 2013/2014.

She calls for these financial statements to be disclosed, and for them to be audited.

Second, the pervasiveness of such poor financial practices across the 1,800 GROs since the AGO had only test-checked a mere 6.5% of the GROs.

Third, that an independent review committee should be established instead of the Grassroots Finance Review Committee, chaired by three grassroots leaders, that was set up in the aftermath of the AGO report.

The chairman of the PA, Lee Hsien Loong, did not speak on the issue in Parliament on Monday.