The Auditor-General Officer (AGO) has given a damning report in its audit of the People’s Association (PA).
The report was released to the public on Wednesday, 15 July.
The PA is a statutory board under the Ministry of Culture, Community and Youth (MCCY), headed by Minister Lawrence Wong.
The AGO found a litany of lapses which included sums amounting into the millions which were irregular.
35 CCMCs’ failure to obtain approvals for awarding contracts
Out of the 91 Community Club Management Committees (CCMCs) test checked by the AGO, 35 of them were found to have failed to obtain approvals from the relevant authorities for awarding 53 tenancy contracts worth a total of $17.78 million.
10 of the 35 CCMCs also did not obtain the relevant approvals for the direct award of 13 tenancy contracts worth a total of $3.67 million. These contracts were also given without competition, which can only be given under exceptional circumstances.
9 grassroots organisations (GROs) non-compliance with financial rules
The Ago found that nine GROs had failed to adhere to the PA’s own Financial Rules in the following areas:
- Five GROs had awarded nine contracts – worth a total of $152,000 – without first obtaining approvals.
- Five GROs obtained approvals for the award of 15 contracts totalling $565,000 from the wrong approving authorities.
- Four GROs did not seek approval for making 10 direct purchases from suppliers. These totalled $53,000.
- Three GROs did not invite quotations in writing 13 purchases totalling $187,000.
Failure to collect fees and lapses in engagement of training operators
The AGO found that:
- Four GROs had engaged operators directly without calling competitive bids for eight contracts worth a total of $311,000.
- One Residents Committee (RC) awarded a $1.1 million contract to an incumbent operator without calling for a tender, which was required.
- All four RCs tech-checked could not produce evidence showing that they had carried out audit checks on course fees collected by operators on behalf of the RCs – these totalled $1.26 million.
- One RC failed to take any action when an operator had repeatedly delayed handing over course fees collected on behalf of the PA – this totalled $414,700.
Procurement and payment irregularities at a CCC
The AGO report highlighted an unnamed Citizens Consultative Committee (CCC) involved in “party related transactions and payments.”
It found that a member of the CCC was involved in approving awards of two contracts totalling $32,000 to a company, and another member was involved in approving one of these contracts.
The two men held senior positions at the company at the time, and had failed to declare the conflict of interest, the AGO said.
“In addition, one of the members was involved in approving payments of the two contracts to the company as well as seven of his own claims amounting to $114,767.”
“As a result,” the AGO said, “there was no assurance that these transactions were conducted at arm’s length.”
The AGO also checks of 41 payments at the CCC revealed that the chairman was involved in approving his own claims, which amounted to $114,767.
“This is a clear conflict of roles as the approver of payments should not be approving his own claims,” the AGO sad. “Furthermore, AGO observed that there was no supporting document for three of the payments.”
It was later revealed that the CCC member involved is the chairman of the Admiralty branch.
He has since stepped down and investigations have been launched into the matter.
Inadequate controls
The AGO “noted numerous errors and omissions” in the updating of disbursements from the CCC ComCare Fund (CCF) by seven of eight CCCs checked. These affected the records of the actual amount of funds used.
The Ago also found that five of eight CCS did not take into account cheques that were cancelled or had expired. The actual CCF utilised was thus overstated.
The Ago therefore found an overstatement of $225,703 in some cases and an understatement of $120,210 in others for the financial year 2012/2013 and 2013/2014.
Adverse ratings
The latest AGO report on the PA follows the years of “adverse rating” given to it by the PA’s own auditors, as The Online Citizen (TOC) and TR Emeritus reported in 2014.
A check with its annual reports from 2001 to 2010 found that the PA’s auditors made some observations and noted that the financial statements of related organizations of the PA had omitted providing financial statements to the auditors.
Please see our earlier report here: “More than 10 years of omissions in financial statements submissions by PA”.
Read also TR Emeritus’ report: “Auditors give adverse ratings to PA’s financial reports”.
The chairman of the PA is Prime Minister Lee Hsien Loong, with its deputy chairman, Lim Swee Say, who is also the Minister of Manpower.
The board members include several ministers, such as Grace Fu, Lawrence Wong, Masagos Zulkifli, and MP Janil Puthcheary.