Finance Ministry “disappointed” with instances of officers from MCCY and PA allegedly fabricating or altering documents, following AGO’s report

PA said in a separate statement that it has filed a police report over the alleged falsification of documents flagged by AGO

The Auditor-General’s Office’s (AGO)’s latest findings on serious lapses involving officers from the Ministry of Culture, Community and Youth (MCCY) and the People’s Association (PA) is disappointing, said the Ministry of Finance on Thursday.

In its audit report on government ministries and statutory boards for FY2020/21, the AGO found “weaknesses in management of contract variations” for two of PA’s development projects, with a total value of $623.96 million.

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

‘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.

It added: “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.”

MOF in its statement on Thursday said that it will “throw the book at officers involved in suspected fraud and corruption including lodging police reports for criminal investigations to be conducted”.

“Beyond that, the heads of our agencies will continue to strengthen governance and controls to ensure that our system of integrity is maintained. They will also prioritise and intensify our internal audits to look out for any such wrong-doing. When such issues are detected, we will deal with them decisively,” the ministry added.

PA files police report over alleged falsification of documents flagged by AGO

The two PA development projects audited by the AGO in its 2020/21 report are Our Tampines Hub (OTH) and [email protected] (HBB).

Regarding OTH, PA said in a statement that it “had engaged contractors to carry out minor building works” at the facilities and took on the services of a managing agent “to assist in managing the facilities and to supervise the contractors”.

“In reviewing the payments made to the contractors, AGO sampled 36 payments (totalling $1.27 million) made between 1 April 2018 and 31 March 2020. It found that there were possible irregularities in the supporting documents for 34 of such payments.

“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.

“Upon notification by AGO of the above in March 2021, PA immediately convened an internal investigation panel, led by senior officers from PA and MCCY, to conduct a thorough review of the related processes,” said PA.

Findings from the investigation, which concluded in May, had “confirmed AGO’s observations”, said the organisation.

Subsequently, PA said that it has lodged a police report regarding the above and has suspended its staff pending the outcome of the investigations.

PA said that it has also set up a taskforce led by senior officers to strengthen processes in procurement, contract and facility management, raise staff capabilities, and improve oversight of contractors and managing agents.

“In addition to the above, PA will be appointing an external consultant to conduct a thorough review of its governance system and oversight functions in relation to contract management of all development projects. The external consultant will be given a broad mandate to review the above matters and provide recommendations to strengthen PA’s oversight of contract management,” said PA.

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, 35 out of the 91 Community Club Management Committees (CCMCs) test checked by the AGO were found to have failed to obtain approvals from the relevant authorities for awarding 53 tenancy contracts worth a total of S$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 S$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 per cent — 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 the 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 the Secretary-General of PAP. He is seconded by PAP minister Edwin Tong. 8 out of its 14 board of management members are from PAP.

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