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Audits by AGO on People’s Association uncovers possible lapses and irregularities leading to police reports lodged

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The Auditor-General Office (AGO) has released its report auditing report on government ministries and statutory boards for FY2020/21.

It was presented to the President on 2 Jul and tabled in Parliament yesterday (21 Jul).

One of the statutory boards audited again was People’s Association (PA), chaired by Prime Minister Lee Hsien Loong. A sum of $796 million was allocated to PA in FY2020.

The AGO has found serious lapses in PA during its recent audit.

AGO found “weaknesses in management of contract variations” for 2 development projects (value totaling $623.96 million) which it test-checked.

The lapses indicated inadequate oversight of the consultants by PA, criticised AGO.

“The high number of cases with no evidence of approval also pointed to poor documentary trails, which increased the risk of irregularities not being detected,” AGO said.

“The lack of independent sources to assess the cost reasonableness of star rate items and the failure to properly account for variation works also did not provide assurance that PA had obtained full value for the public funds spent.”

AGO did a sampling test and found that of the 465 contract variations it checked. More than half (252 or 54%) amounting to $13.62 million were found to have lapses:

  1. No evidence of approval for the 109 out of 465 contract variations, amounting to $8.06 million.
  2. Approvals for 142 out of 356 contract variations amounting to $5.44 million were obtained from the approving authority 1 month to 5.5 years after works had commenced or were already completed.
  3. No evidence that approval was sought for the increase in variation cost for six contract variations from the total approved amount of about $500 to $800K. The increase for each variation ranged from 21.6 per cent to 226.6 per cent.

AGO also found that assessments of cost reasonableness of star rate items totaling $1.26 million were not based on independent sources for 8 out of 14 contract variations it has test-checked. “The quotations obtained for these star rate items were all provided either by the contractor or the sub-contractor involved in the project,” noted AGO.

There was an estimated over-payment of $621,700, it added. AGO further found two instances where the contract was not adjusted to account for contract variation. These involved works that were not carried out in accordance with contractual provisions and the estimated over-payments amounted to $279,300.

Alleged irregularities found relating to payments

For one of its development projects, PA engaged contractors to carry out minor building works at the facility with contract value totaling $6.50 million. PA had also engaged a managing agent to assist it in managing the facility. For star rate items, three quotations were to be obtained to assess price reasonableness.

AGO test-checked 36 payments (totalling $1.27 million) made between 1 April 2018 and 31 March 2020 to two contractors and found possible irregularities in the supporting documents for 34 payments (or 94.4 per cent).

The 34 payments (totalling $1.17 million) with possible irregularities had each involved one or more star rate items (star rate items totalling $1.06 million, or 83.5 per cent of the total payment amount test-checked).

The possible irregularities include possible falsification of quotations, alteration of hardcopy payment supporting documents and creation and backdating of documents to give the false impression that proper processes had been followed.

Further, AGO obtained independent quotations for selected star rate items under eight payments and noted that PA might have been overcharged between 1.2 and 19.3 times the market rates for those items.

Possible lapses and irregularities in management of term contracts

AGO’s test checks of the same 36 payments (totalling $1.27 million) revealed other possible lapses and irregularities in 35 payments16 (totalling $1.26 million).

The possible lapses and irregularities include:
a. Splitting of purchase orders (POs);
b. Works carried out before issuance of POs;
c. Winning quotations approved by PA officers retrospectively;
d. Star rate items formed bulk of payment and possible inflation of the price of star rate items; and
e. Inappropriate use of contract rates and/or inflated quantities.

As AGO had concerns over the authenticity of the documents provided and observations made, AGO recommended that PA carry out an investigation.

PA informed AGO that it had since completed its investigation and lodged a police report,” AGO said. PA informed that it had also initiated “disciplinary proceedings” against the staff involved.

It’s not known what PA Chief BG (NS) Lim would do.

Serious lapses in past checks conducted by AGO on PA

This is not the first time AGO has found faults in PA’s internal financial processes.

In 2015, 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.

These are just part of the damning report on PA by AGO in 2015.

In 2018, 13 of 18 PA grassroots organizations checked by AGO were found to have recurring problems in award of tender contracts.

189 purchases amounting to $6.03 million made by PA’s 18 GROs were test-checked during this audit. Out of the 18 GROs, 13 (or 72%) were found not to have obtained proper approvals for award of contracts and variation for some 25 purchases totalling $619,900.

AGO also noted that failure to obtain proper approvals for award of contracts is a “recurring lapse”. A similar observation was raised in the Report of the Auditor-General for the financial year 2014/15.

These are just part of the similarly damning report by AGO in 2018.

In any case, PA does enjoy a close relationship with the People’s Action Party (PAP). At a public forum, the late Mr Lee Kuan Yew once commented on what some PRC officials had observed when they visited Singapore years ago.

He said, “They (PRCs) discover that the People’s Action Party (PAP) has only a small office in Bedok. But everywhere they go, they see the PAP – in the RCs (residents’ committees), CCCs (citizens’ consultative committees), and the CCs (community clubs).”

The CEO of PA is currently Lim Hock Yu. Lim retired as a Brigadier General from the SAF before joining PA as its Deputy Chief Executive. He was appointed to head PA last year.

“In his distinguished military career, Mr Lim has held various key appointments, including Commander 9th Singapore Division/Chief Infantry Officer, Commander of Army Training and Doctrine Command, and Chief of Staff (General Staff),” PA said.

PA is currently chaired by PM Lee who is also the Secretary General of PAP and seconded by PAP minister Edwin Tong. 8 out of its 14 board of management are from PAP.

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Chee Soon Juan questions Shanmugam’s $88 million property sale amid silence from Mainstream Media

Dr Chee Soon Juan of the SDP raised concerns about the S$88 million sale of Mr K Shanmugam’s Good Class Bungalow at Astrid Hill, questioning transparency and the lack of mainstream media coverage. He called for clarity on the buyer, valuation, and potential conflicts of interest.

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On Sunday (22 Sep), Dr Chee Soon Juan, Secretary General of the Singapore Democratic Party (SDP), issued a public statement on Facebook, expressing concerns regarding the sale of Minister for Home Affairs and Law, Mr K Shanmugam’s Good Class Bungalow (GCB) at Astrid Hill.

Dr Chee questioned the transparency of the S$88 million transaction and the absence of mainstream media coverage despite widespread discussion online.

According to multiple reports cited by Dr Chee, Mr Shanmugam’s property was transferred in August 2023 to UBS Trustees (Singapore) Pte Ltd, which holds the property in trust under the Jasmine Villa Settlement.

Dr Chee’s statement focused on two primary concerns: the lack of response from Mr Shanmugam regarding the transaction and the silence of major media outlets, including Singapore Press Holdings and Mediacorp.

He argued that, given the ongoing public discourse and the relevance of property prices in Singapore, the sale of a high-value asset by a public official warranted further scrutiny.

In his Facebook post, Dr Chee posed several questions directed at Mr Shanmugam and the government:

  1. Who purchased the property, and is the buyer a Singaporean citizen?
  2. Who owns Jasmine Villa Settlement?
  3. Were former Prime Minister Lee Hsien Loong and current Prime Minister Lawrence Wong informed of the transaction, and what were their responses?
  4. How was it ensured that the funds were not linked to money laundering?
  5. How was the property’s valuation determined, and by whom?

The Astrid Hill property, originally purchased by Mr Shanmugam in 2003 for S$7.95 million, saw a significant increase in value, aligning with the high-end status of District 10, where it is located. The 3,170.7 square-meter property was sold for S$88 million in August 2023.

Dr Chee highlighted that, despite Mr Shanmugam’s detailed responses regarding the Ridout Road property, no such transparency had been offered in relation to the Astrid Hill sale.

He argued that the lack of mainstream media coverage was particularly concerning, as public interest in the sale is high. Dr Chee emphasized that property prices and housing affordability are critical issues in Singapore, and transparency from public officials is essential to maintain trust.

Dr Chee emphasized that the Ministerial Code of Conduct unambiguously states: “A Minister must scrupulously avoid any actual or apparent conflict of interest between his office and his private financial interests.”

He concluded his statement by reiterating the need for Mr Shanmugam to address the questions raised, as the matter involves not only the Minister himself but also the integrity of the government and its responsibility to the public.

The supposed sale of Mr Shamugam’s Astrid Hill property took place just a month after Mr Shanmugam spoke in Parliament over his rental of a state-owned bungalow at Ridout Road via a ministerial statement addressing potential conflicts of interest.

At that time, Mr Shanmugam explained that his decision to sell his home was due to concerns about over-investment in a single asset, noting that his financial planning prompted him to sell the property and move into rental accommodation.

The Ridout Road saga last year centred on concerns about Mr Shanmugam’s rental of a sprawling black-and-white colonial bungalow, occupying a massive plot of land, managed by the Singapore Land Authority (SLA), which he oversees in his capacity as Minister for Law. Minister for Foreign Affairs, Dr Vivian Balakrishnan, also rented a similarly expansive property nearby.

Mr Shanmugam is said to have recused himself from the decision-making process, and a subsequent investigation by the Corrupt Practices Investigation Bureau (CPIB) found no wrongdoing while Senior Minister Teo Chee Hean confirmed in Parliament that Mr Shanmugam had removed himself from any decisions involving the property.

As of now, Mr Shanmugam has not commented publicly on the sale of his Astrid Hill property.

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Redditors question support for PAP over perceived arrogance and authoritarian attitude

Despite Senior Minister Lee Hsien Loong’s warning that slimmer electoral margins would limit the government’s political space “to do the right things”, many Redditors questioned their support for the ruling PAP, criticising its perceived arrogance. They argued that SM Lee’s remarks show the party has ‘lost its ways’ and acts as if it alone can determine what is right. Others noted that the PAP’s supermajority allows for the passage of unfavourable policies without adequate scrutiny.

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In a recent speech, Senior Minister Lee Hsien Loong warned that “if electoral margins get slimmer, the government will have less political space to do the right things.”

Mr Lee, who served as Prime Minister for 20 years, highlighted the risks associated with increasingly competitive politics.

“It will become harder to disregard short-term considerations in decision-making. The political dynamics will become very different,” he stated during his speech at the Annual Public Service Leadership Ceremony 2024 on 17 September.

“Singaporeans must understand the dangers this creates, and so must the public service,” SM Lee stressed.

SM Lee pointed out that Singapore faces formidable internal and external challenges in the years ahead, with rising expectations and demands from citizens.

As growth becomes harder to achieve and politics becomes more fiercely contested, he warned, “Things can go wrong for Singapore too.”

He urged vigilance in preparing for an uncertain future, noting, “As the world changes, and as the generations change, we must do our best to renew our system – to ensure that it continues to work well for us, even as things change.”

Critique of PAP’s Arrogance and Disconnect from Singaporeans

The People’s Action Party (PAP) experienced a notable decline in its vote share during the 2020 General Election, securing 61.24% of the votes and winning 83 out of 93 seats, a drop from 69.9% in 2015.

A significant loss was in Sengkang GRC, where the PAP team, led by former Minister Ng Chee Meng, was defeated by the Workers’ Party (WP).

In discussions on Reddit, some users questioned why they should support the ruling PAP, criticising the party’s perceived arrogance.

They pointed out that SM Lee’s recent remarks illustrate that the party has strayed from effectively serving Singaporeans and seems to believe it has the sole authority to decide what is right.

Others highlighted that the PAP’s super-majority in Parliament enables the passage of unfavourable policies without sufficient scrutiny.

One comment acknowledged that while many older Singaporeans remain loyal to the PAP due to its past achievements, younger generations feel the party has failed to deliver similar results.

There is significant frustration that essentials like housing and the cost of living have become less affordable compared to previous generations.

The comment emphasised the importance of the 2011 election results, which they believe compelled the PAP to reassess its policies, especially concerning foreign labor and job security.

He suggested that to retain voter support, the PAP must continue to ensure a good material standard of living.

“Then, I ask you, vote PAP for what? They deserve to lose a supermajority. Or else why would they continue to deliver the same promises they delivered to our parents? What else would get a bunch of clueless bureaucrats to recognise their problems?”

Emphasising Government Accountability to the Public

Another Redditor argued that it is the government’s responsibility to be accountable to the people.

He further challenged SM Lee’s assertion about having less political space to do the right things, questioning his authority to define what is “right” for Singapore.

The comment criticised initiatives like the Founder’s Memorial and the NS Square, suggesting they may serve to boost the egos of a few rather than benefit the broader population. The Redditor also questioned the justification for GST hikes amid rising living costs.

“Policies should always be enacted to the benefit of the people, and it should always be the people who decide what is the best course of action for our country. No one should decide that other than us.”

The comment called for an end to narratives that present the PAP as the only party capable of rescuing Singapore from crises, stating that the country has moved past the existential challenges of its founding era and that innovative ideas can come from beyond a single political party.

Another comment echoed this sentiment, noting that by stating this, SM Lee seemingly expects Singaporeans to accept the PAP’s assumption that they—and by extension, the government and public service—will generally do the “right things.”

“What is conveniently overlooked is that the point of having elections is to have us examine for ourselves if we accept that very premise, and vote accordingly.”

A comment further argued that simply losing a supermajority does not equate to a lack of political space for the government to make the right decisions.

The Redditor express frustration with SM Lee’s rhetoric, suggesting that he is manipulating public perception to justify arbitrary changes to the constitution.

Concerns Over PAP’s Supermajority in Parliament

Another comment pointed out that the PAP’s supermajority in Parliament enables the passage of questionable and controversial policies, bypassing robust debate and discussion.

The comment highlighted the contentious constitutional amendments made in late 2016, which reserved the elected presidency for candidates from a specific racial group if no president from that group had served in the previous five terms.

A comment highlighted the contrast: in the past, the PAP enjoyed a wide electoral margin because citizens believed they governed effectively. Now, the PAP claims that without a substantial electoral margin, they cannot govern well.

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