Failure by NUS and NTU to remind recipients of scholarship obligations and impose liquidated damages

In its audit report for Financial Year 2015/2016 published on 26 July, the Auditor-General Office (AGO) found that the Ministry of Education (MOE) did not maintain adequate oversight of the Nanyang Technological University (NTU) and the National University of Singapore (NUS) to ensure that recipients under a scholarship scheme who failed to serve their bonds were reminded of their scholarship obligations and liquidated damages were imposed, where warranted.

AGO noted that the total disbursements for the scholarship scheme were $36.52 million in the financial year 2014/15.

Records show that 30 scholars under the two universities, were not serving the required bond under the scholarship scheme. It is unknown how much is involved in the disbursements for the 30 cases, no mention of the composition of the scholars, whether they are local or international students.

AGO’s test checks of the two universities’ follow-up on the 30 cases, revealed the following two lapses.

Lack of follow up by universities

Out of the 30 cases, 14 cases showed a lack of follow-up by the universities. The universities did not send any letters to remind scholars of their bond obligations and the consequences of not fulfilling them, or Letters of Demand to impose liquidated damages where warranted. Based on MOE’s guidelines, at the time of audit in October 2015, these letters were already between 1 and 22 months late.

Lag between letter of demand and failure to fulfil bond

Of the 30 cases, 2 cases had the Letters of Demand sent after a lag of 17 and 26 months.

MOE should maintain oversight

AGO commented in its findings that MOE should maintain oversight of NTU’s and NUS’ monitoring and enforcement of the serving of bonds by the scholars.

It observed that the universities would submit reports on the bond status of scholars to MOE annually. As the reports would indicate whether the universities had issued reminder letters or Letters of Demand to scholars who were not serving bonds, MOE could have followed up with the universities on cases where actions had not been taken.

AGO also noted that without proper oversight of the monitoring and enforcement actions on fulfilment of the scholarship bonds, there was no assurance that the scholarship grants were used optimally for the intended purpose.

It is said that MOE had since informed AGO that it would put in place additional checks and work closely with NTU and NUS to further ensure that tracking and enforcement are carried out in a timely manner.