Ministry of Finance: “Majority of the lapses reported by the AG’s Office over the years are not criminal in nature”

In a forum letter published by The Straits Times on Wednesday (1 August), Mr Tan Soon Hock wrote a letter regarding latest Auditor-General’s Office (AGO) report which highlighted the same lapses and acts of non-transparency committed by the governmental and public-sector bodies particularly those from People’s Association found in 2015 and voiced his concern about how the positions in grassroots organisations, especially those in charge of tender and financial matters, appointed.

Here is what he wrote in full:

The latest Auditor-General’s Office (AGO) report has highlighted the same lapses and acts of non-transparency committed by our governmental and public-sector bodies that were seen in previous reports (Auditor-General flags lapses at ministries, govt agencies; July 18).

This is despite past assurances by the bodies audited to improve.

The People’s Association and a grassroots organisation were cited for, among other things, allowing a tender bid to be revised after tender closure and not evaluating tenders on an equal basis.

In 2015, the AGO flagged the case of a grassroots organisation chairman who had approved his own claims, three of which were without supporting documents, as well as payments made to a company in which he held a senior position (PA investigates lapses at grassroots organisations flagged by Auditor-General; July 15, 2015).

The obvious question is: How are those in senior positions in grassroots organisations, especially those in charge of tenders and financial matters, appointed?

Indeed, those helming the organisations audited are all highly qualified and capable, with many scholars among them. And yet, we are seeing recurring improper practices being highlighted in AGO reports.

Recently, a former Republic of Singapore Air Force (RSAF) engineer was convicted of cheating the Government over contracts worth more than $1.8 million (Ex-RSAF man jailed in $1.8m cheating case; July 28). The deputy public prosecutor said the man had “compromised the procurement process”.

Aren’t the improper practices involving tender exercises cited in the AGO reports also acts of having “compromised the procurement process”? Why, then, were those cases not brought to court?

More must be done by our governmental and public-sector bodies to clean house with respect to the findings in the AGO report.

Responding to Mr Tan’s letter, Director (Corporate Communications) Ministry of Finance, Mr Lim Yuin Chien, stated that the heads of agencies review every case highlighted in the Auditor-General’s (AG) Report and take the appropriate measures to address the findings, with particular attention to recurrent issues. However, he does not seem to answer Mr Tan’s question as to how “senior positions in grassroots organisations, especially those in charge of tenders and financial matters, appointed”.

Here is what he wrote in full:

We refer to Mr Tan Soon Hock’s letter (Public sector bodies must do more to clean up their act; Aug 1).

The heads of agencies review every case highlighted in the Auditor-General’s (AG) Report and take the appropriate measures to address the findings, with particular attention to recurrent issues.

The vast majority of the lapses reported by the AG’s Office over the years are not criminal in nature and do not warrant being brought to court. Most are administrative or procedural lapses, brought about mainly by a lack of awareness, carelessness or poor supervision.

In such cases, where appropriate, internal disciplinary actions are taken against officers found responsible.

However, in the event that there are suggestions of corruption, fraud or other criminal wrongdoing, these will be referred for police investigation.

If there is sufficient evidence against the officer, he/she will be charged in court.

If found guilty, the officer faces the full measure of the law.

The case of the former Republic of Singapore Air Force engineer highlighted by Mr Tan was detected through the Ministry of Defence’s internal audit, and was surfaced to the Corrupt Practices Investigation Bureau for investigation.

Improving the financial governance of public agencies is an ongoing effort. Given the size of the public service, human error and lapses occur from time to time.

When these occur, the Government addresses them openly and honestly, learns from them, and does its best to avoid recurrence.

In seeking to improve, we must continue to strike a sensible balance between strengthening controls and maintaining efficiency in providing services to Singaporeans.

Otherwise, our processes will be bogged down by ever-tightening rules and controls, which can ultimately affect the delivery of public services.

In the 2017/18 report, AGO’s test checked on some of the overseas purchases and payments for costumes and accessories used in the Chingay Parade 2017 event. It said that it has discovered “serious weaknesses” which could be exploited.

In particular, AGO has alluded to possible fraud been committed, “The weaknesses included not adhering to procurement principles and weak controls over payments. There were also tell-tale signs on some supporting documents submitted for reimbursement claims which indicated that they might not be authentic.”

While organizing the Chingay Parade 2017 event, PA had posted Invitations to Quote for costumes and accessories in the government procurement system, GeBIZ, and concurrently obtained manual quotations for the same items from overseas vendors not registered under GeBIZ.

PA subsequently posted “no award” announcements in GeBIZ for the Invitations to Quote even though it had awarded the contracts to overseas vendors. But AGO noted that conducting parallel manual quotation exercises was not allowed under the Government Instruction Manuals.

“As obtaining manual quotations from overseas suppliers were not subject to the more stringent controls for calling quotations via GeBIZ, PA could be exposed to the risks of manipulation of bids as well as allegations of discriminatory practice and lack of transparency,” AGO said.

In addition, AGO also found that PA had allowed an officer to make overseas purchases amounting to $142,200 and to pay for them in cash or through a remittance agent. This officer subsequently claimed reimbursements using cash sales receipts and AGO found that some of these receipts submitted by the officer had tell-tale signs, which cast doubts on their authenticity.

“Thus, there was no assurance that the amount of reimbursement claimed by the officer was the actual amount of cash that was paid by the officer to the overseas vendors,” AGO said, alluding to possible fraud.

And to add to the intrigue, although the officer was accompanied by at least one other staff during the sourcing and purchasing trips, AGO found that he had made two additional personal overseas trips at his own expense so as to make purchases, settle final payments for earlier purchases and obtain cash sales receipts.

“Allowing the officer to make purchases and payments unaccompanied by other staff exposed PA to the risks of duplicate and inflated claims,” AGO commented.