Government lapses: Missing the forest for the trees?

By Leong Sze Hian

Hundreds of lapses?

The Auditor-General Office’s (AGO) report talks about hundreds of procurement lapses in practically every Ministry.

For example, in one agency alone – the National Research Foundation, which is under the Prime Minister’s Office (PMO) – there were more than a hundred procurement lapses (108 lapses). The largest amounts involved were $5.99 million.

Millions of Dollars?

– “D. Contract Variation Instructions Issued Without Appropriate Approval

60. AGO test-checked 149 variation instructions issued to the contractor for
building works construction and found 108 instances (72.5 per cent) amounting
to $5.99 million, where there was no evidence that appropriate approval had been
obtained. In another 17 instances (amounting to $330,900), AGO observed that
retrospective approvals were obtained 29 to 260 days after variation instructions
were issued.”

More and more lapses?

The revelation of lapses from the AGO is almost an annual affair, with this year’s scale and magnitude being perhaps the largest ever from my livng memory.

Why – in a First World Country?

Whilst it shows that the AGO is doing a great job, it begs the perhaps obvious question as to why Singapore – much touted as one of the most efficient administrative and executive public sector systems in the world, continues to have apparently more and more lapses, particularly in the area of procurement.

“AIM” lapse?

The $2 AIM company affair may arguably also be considered as a “procurement” lapse, as it pertains to the procurement of software by the town councils.

Workers’ Party’s procurement lapses?

Of late, in the Parliamentary debate on “AIM” , the Workers’Party was also lamblasted for the way it did some of its town council’s procurement contracts.

Hawkers’centre cleaning also lapses?

And of course, arguably, all the recent ruckus in Parliament and all over Singapore in the coffeshops and on the internet about the cleaning of 2 hawker centres – are also related to procurement – town council’s cleaning contracts.

Holding politicians accountable?

On this note, since politicians are being taken to task over lapses, what about the lapses reported by the AGO? What action will be taken in respect of those who may be accountable? What action has been taken for the lapses in the AGO’s previous years’ reports?

Well, before we all get carried away with the numbers and the debate, I would like to suggest that we take a step back.

Missing the forest for the trees?

Try to think out of the box – and perhaps we may be “missing the forest for the trees”!

So, what am I thinking and what am I trying to drive at?

The biggest procurement contracts in Singapore?

What are arguably the biggest procurement contracts in Singapore? Could it be CPF, HDB and Healthcare?

CPF

Allow me to explain. CPF affects almost every Singaporean in a very big way – whether most of us will have enough to retire?

So, shouldn’t the CPF contract (provision of the services of CPF to achieve the retirement goals of Singaporeans) be tendered out like a procurement to the best contractor who can meet the objectives of the CPF system?

But then why tender out now in the first place? Because, arguably our CPF is doing a damn lousy job (pardon my language) – with estimates that only about 1 in 8 Singaporeans who turn 55 were able to meet the current CPF Minimum Sum (currently $148,000) entirely in cash (CPF account balance) without pledging property.

Even with the pledging of property, I estimate that only about 1 in 4 were able to meet the Minimum Sum. (Note: My estimates include inactive CPF account holders – in other words – all Singaporeans who turn 55).

Why are the statistics and outcomes so pathetic? The primary reason may be that we are simply paying too low an interest on the bulk of our CPF (over $200 billion), at just 2.5 per cent on the Ordinary Account.

Perhaps we should tender out our CPF funds to Temasek or the GIC as they achieved annualised returns of 16 per cent from inception and about 6 per cent (in US$ terms) for the last 20 years, respectively.

HDB

Now that you may have gotten the gist of what I’m trying to get at – let’s look at HDB.

Since we have arguably the most expensive by multiples of income to price (and therefore by this measure the most unaffordable public housing in the world), and the so called HDB Concessionary Loan at 2.6 per cent has always been higher than what the banks have been charging on HDB bank loans since they were allowed to offer HDB bank loans from 1 January 2003

– why not tender out the HDB system – maybe the successful tenderer can give us more affordable HDB flats and lower interest HDB housing loans (By the way, the word “Concessionary” does not make sense since it has always been higher than the banks!).

Healthcare

Finally, let me move on to Healthcare – since we have one of the most uaffordable healthcare systems in the world – if you measure the public versus private share of healthcare spending at about one-third to two-third, the number of successful applications to medifund at a whoppng 500,000 in a year, 8 per cent of people who do not have any form of medical insurance (not even Medishield), about more than $100 million owed by patients to public hospitals after they wrote off about $90 million, people being encouraged to send their aged parents to nursing homes in Malaysia, going to approved Malaysian hospitals for hospitalisation and being allowed to use one’s Medisave, but not claimable under Medishield or any of the private insurers’ CPF approved medical insurance plans, etc

– why not tender it out to a party that can provide a more universal coverage and affordable healthcare system?

In this connection, you may like to read “Others should learn from the Police co-op on how to help Singaporeans?” (Jul 24) – to give you some idea about how and why some Singaporeans end up being homeless because of medical bills?

Long waiting times and discrimination? 

The tender specifications and the winner of the Healthcare tender, must be able to improve upon the current system whereby subsidised patients (those who can’t pay more) with the same medical condition has typically to wait for months, whereas non-subsidised patients (those who can pay more) can be operated on or tested within a week,  where the waiting time at the polyclinics and A & E can be several hours (this year, the first dengue death person’s mother told the media that her son waited for more than 5 hours before giving up to leave), where walk-in dental treatment at the polyclinics at subsidised rates are non-existent, the frequent non-availability of beds when one needs to be hospitalised, etc.

Let’s focus on the real biggies of lapses?

Let’s focus on the forest, instead of the trees! We shouldn’t be sweating over the small stuff like some few thousand dollars hawker centre cleaning contract or a few dollars here and there of procurement lapses in practically every Ministry, which may have very little direct impact on ordinary Singaporeans, particularly the lower-income ones.

Let’s focus on the real biggies – CPF, HDB and Healthcare!