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Auditor General’s Report – Millions Missing

TOC Exclusive

The original Auditor General Office’s (AGO) audit of 12 Ministries and associated statutory boards has revealed irregularities to an extent not fully revealed by the recent Public Accounts Committee (PAC).

According to the AGO, losses of public monies added up to $6.2 million, a substantial amount of which is still unaccounted for.

The Auditor General’s preface to the report states that ‘This audit approach is not intended to reveal all errors and irregularities.’

In the report, the Ministry of Law lost a potential $77,666.64 safety deposit because its computer system could only register sums to the nearest dollar. It appears under the header ‘No $77,666.64 security deposit because of 36 cents’.

The report details how these millions were lost in a detailed account of mistakes and dubious practices.

The Ministry of Home Affairs, for example, charged rental far below the market rate, forgoing $2.38 million that should have gone into state coffers. The Ministry of Law, in addition to the 36 cent mistake, left our public funds $386,829 poorer by failing to implement rental increase. This was described as an ‘oversight’.

The list goes on.

The Ministry of Manpower delayed collecting a $501,998 debt for a grand total of 15 years. When it decided to finally recover the sum of money, the company disputed the debt owed but the Ministry did not have the necessary paperwork to ‘substantiate the debt’. National Development lost us $228,000 in foregone rental, and Trade and Industry overpaid $1.87m in grants to a statutory board (since recovered).

The largest outstanding sum identified was the Ministry of Health: $136.2 million for Phase III of the National University Hospital development project has still not been recovered despite having been completed in 1996.

More questions than answers

The report raises more questions than it answers. Procurement irregularities are unexplained: a National Development contract was awarded for an eighth ranking bid (in terms of price) out of 11 without any justification. Further, the officers signing the contracts were not authorized to do so. Under the column ‘subsequent action’, all that is said is that the Ministry ‘streamlined procurement procedures…which would prevent such lapses from recurring’. Not even an ex post facto explanation about the dubious procurement.

The ‘subsequent action’ detailed for other irregularities and mistakes do not offer much elaboration. In the case of the Ministry of Manpower’s half a million dollar mistake that spanned 15 years, it gave assurances that ‘levy debts will be resolved within a much shorter time frame in future’ and that ‘future relevant documents’ would be retained.

TOC Opinion

Theonlinecitizen (TOC) recently reproduced in full the report by the Public Accounts Committee (here), convened by Parliament to scrutinize irregularities highlighted by the Auditor General’s report for financial year 05-06. It gave few concrete figures to highlight the irregularities it was pointing out.

TOC has obtained a copy of the original AGO report, which gives a far more comprehensive overview of the scope of the irregularities. This is reproduced in full (see below). We hope that members of the public will step forward to scrutinize the report and ask the necessary questions of our public servants.

In light of the limited scope of the Auditor-General’s report, we believe that the public deserves a more thorough audit of its public offices. Further, action needs to be taken to examine why these mistakes occurred in the first place: What are the fundamental causes of these lapses? Is it systemic or is it just incompetence on the part of the departments involved?

What were the consequences of these multi-million dollar mistakes?

This report can either be swept under the carpet to the further detriment of the credibility of the media and our government, or it can serve as a reference point for a new era in government transparency and accountability.

We hope the latter will prevail.

From the Auditor General Office's website:

“Non-compliances with procedures in the use of public funds are signs of weak internal controls. As audits are done on a test check basis, the weaknesses found could be an indication of more widespread problems. Many frauds, big or small, occurred because the weak controls were exploited. Weak controls involving small amounts could also be exploited resulting in larger losses. In the Report of the Auditor-General for the Financial Year 2005/06, individual cases of loss of public moneys were mostly small but these collectively amounted to $6.2 million. (Link)

You can view a copy of the Auditor General’s report as follows (pdf file):

Part 1 - The cover and content list
Part 2 - Introduction
Part 3 - Main report
Part 4 - Main report (cont'd)

Please visit also the Auditor General's Office website for some FAQs.

Please do send us your views/articles on this issue. Our email address is [email protected]

Choo Zheng Xi
Co-editor, theonlinecitizen

*Check out Mr Wang's entry on the EDB : EDB Under Scrutiny

 

Brief Summary Of Auditor General's Report

Ministry of Community, Youth & Sports
Signing contracts without authority

Ministry of Defence
Three cases of procurement irregularities Under-collection of Goods and Services Tax

Ministry of Finance
Weak access controls in computer systems

Ministry of Foreign Affairs
Exposure to fraudulent payments

Ministry of Health
Delay in recovering $136.2 million
Five-year delay in finalizing transfer of $40 million of assets

Ministry of Home Affairs
Government revenue not paid into consolidated fund

Ministry of Information, Communications and the Arts
Unfair payment practice Wrong information in government accounting system
Irregularities in procurement of video production services costing $90,000

Ministry of Law
No $77,666.64 security deposit because of 36 cents Certification by permanent secretary not accurate
Long delay in debt recovery

Ministry of National Development
Waiving fee without authority
Officers signing contracts not authorized to do so

Ministry of Environment and Water Resources
$527,819 written off in audited statement without authority

Ministry of Trade and Industry
Inaccurate records of unutilized grants
Recovery of $2mil paid from grants not promptly refunded to govt
$540,300 interest not promptly recovered and accounted for as govt revenue

Multi Ministry – Loss of public moneys

Defence
- Doubtful claims by staff
Finance
– Overpayment of bills
Health
– Overpayment for training programme
Health
– Overpayment of rental subsidy
Home Affairs
– Charging rental below market rate
MICA
– Fees not paid into consolidated fund
MICA
– Rental not charged
Law
– Under-collection of rental
Manpower
– Uncollectible foreign workers levy debt
National Devt
– Rental not charged
Trade & Industry
– Overpayment of grants to statutory board
ACRA
– Failure to bill $346,603
IRAS
– Weak access controls in computer systems
MAS
– 5 year delay in resolving inadequacies in investment accounting system
MAS
– Payment to wrong bank account
HSA
– Weak access controls in computer systems
HSA
– Weakness in financial controls
IDA
– Weak access controls in computer systems
CPF
– Undue delay in paying insurance claims
NPB
– Weakness in payroll control
NPB
– Undue delay in recovering liquidated damages
EDB
– Governance structure and practice
IE Singapore
– Missing fixed assets
SDC
– Deficiencies in procedures for land sales
SDC
– Weak access controls in computer systems
SDC
– Errors in accounting of govt grants