NParks, MOE possibly overpaid contractors, among other lapses: Auditor-General’s Office report
NParks said it is reviewing and updating its contracts to ensure that works carried out do not deviate from what is stated. ST PHOTO: KELVIN CHNG
Wong Pei Ting
Correspondent
Jul 18, 2024
SINGAPORE – The National Parks Board (NParks) possibly overpaid an estimated $1.93 million to contractors responsible for developing and upgrading parks and open spaces in Singapore, said the Auditor-General’s Office (AGO).
Separately, the Ministry of Education (MOE) could have overpaid its contractors a net amount of $317,100 for three school construction projects, the AGO said.
These were among the lapses flagged in its annual audit of government accounts, made public on July 17, a day after it was presented to Parliament.
The report for the 2023/2024 financial year covered the financial statements of three statutory boards, four government-owned companies, and two other accounts, as well as the government financial statements. The government financial statements incorporate the accounts of all 16 government ministries and eight organs of state.
The report highlighted three main areas in which lapses were uncovered: procurement and contract management, grant management, and revenue and collection management.
The AGO also conducted a thematic audit on several parenthood support measures administered by the Ministry of Social and Family Development and the Early Childhood Development Agency. The Government had disbursed $4.55 billion under these schemes during the audit period from April 2021 to end-June 2023.
NParks, MOE and Nanyang Polytechnic (NYP), meanwhile, filed police reports after the AGO detected possible irregularities in records provided by these institutions.
In a statement on the report, the Ministry of Finance (MOF) said the Government takes the AGO’s observations seriously.
“Where lapses have been identified, agency heads will review each case thoroughly to get to the root cause, and implement measures to address the issues promptly,” it said.
NParks’ contract management lapses
Test-checks on two NParks term contracts uncovered 42 lapses, including instances when full payment was made for work not done according to specifications, as well as shortfalls involving the valuation of work done and duplicate payments.
The possible overpayment to contractors for these works stood at $1.93 million, which translates to 18 per cent of the total value of the 60 work orders checked. The work orders were issued from April 2020 to March 2023, and totalled $10.56 million in value.
The AGO highlighted 18 instances where NParks made full payment for work that was not done according to requirements, resulting in possible overpayment of $1.27 million to contractors.
In one instance, NParks had ordered the construction of two grass and gravel tracks totalling a distance of 1.2km. The contractor used cheaper quarry dust instead, but NParks paid it according to the original contract rate. This resulted in a possible overpayment of $810,000.
The AGO cited another incident where a contractor had installed distance markers made of 3.2mm-thick steel, rather than 5mm-thick steel bollard markers as NParks had requested. Still, NParks paid the contractor using the rate for the thicker markers, resulting in a possible overpayment of $250,000.
The AGO said NParks has to improve its oversight and management of term contracts, adding that inadequate checks on works done and verification of payments “did not give assurance that NParks had obtained full value for the public funds spent”.
In a statement, NParks said it had recovered $290,000 as at May, and is working with contractors to claw back the remaining amount in the next few months.
It added that internal investigations found no indication of fraud or ill intention, although disciplinary action has been taken against the staff involved for the oversights.
NParks said it is reviewing and updating its contracts to ensure that works carried out do not deviate from what is stated. It has also engaged external consultants to check works and payment claims for higher-value projects.
NParks said it will put in place measures like staff checks throughout the period of works, and ensure it can accurately account for the final items delivered or completed.
Staff will undergo refresher training to uphold standards of project and contract management, and raise awareness of the checks required before payment is made, it added.
Payments for work not carried out at schools
The value of these contracts, for two primary schools and a junior college, totalled $171.8 million. PHOTO: LIANHE ZAOBAO
The AGO also flagged procurement and contract management-related lapses at MOE.
The ministry had failed to properly manage three consultant-managed school construction contracts test-checked by the AGO. The value of these contracts, for two primary schools and a junior college, totalled $171.8 million.
Of the $317,100 that could have been overpaid, AGO said $49,400 was for 900 student lockers that were not installed, and $28,700 for textured spray coating that was not applied to staircases. All in all, lapses of this nature made up $218,400 in possible overpayments, the AGO said.
The remaining $98,700 was tabulated from 55 other instances where AGO found that variation works were improperly valued.
“The lapses pointed to the need for MOE to improve its system of checks and oversight of consultants,” the AGO said in its report.
It added that while MOE had engaged consultants to manage such school development projects on its behalf, it remained responsible for the use of public funds and should not be overly reliant on the consultants.
In a statement, MOE said it had recovered $68,000 out of the estimated total overpaid, and aims to recover the rest by end-2024. It will check all other ongoing school development projects for possible overpayments and other contract management lapses, it said.
The ministry said it has issued stern warnings to the consultants of the audited projects for not following procedures. It also noted that these consultants’ chances of securing future tenders will be impacted, as their appraisals are shared with other public sector agencies.
MOE added that it will recruit more specialised officers to verify and assess the reasonableness of rates and computations used by consultants.
The AGO also flagged long delays in finalising accounts for 20 construction contracts under MOE, with delays ranging from two months to more than three years.
MOE said it had paid contractors for all work certified complete by appointed consultants prior to the audit. Of the outstanding balance of $6.41 million, the ministry has since paid up a further $1.8 million, and is in discussions with contractors on the valuation of work done for the rest.
On concerns raised over the authenticity of certain quotations provided for construction contracts, the ministry said the matter has been reported to the police.
“MOE has zero tolerance for improper quotations, and expects our consultants and contractors to adopt the same stance,” it said.
NYP’s billing issues
The sum was for 134 bills with amounts ranging from $50 to $1.24 million, issued to 40 sponsoring companies and 26 self-sponsored trainees. ST PHOTO: BRIAN TEO
NYP was flagged for not being prompt in issuing bills for Continuing Education and Training (CET) course fees amounting to $8.98 million.
The sum was for 134 bills with amounts ranging from $50 to $1.24 million, issued to 40 sponsoring companies and 26 self-sponsored trainees. They were issued as late as one year after the courses had begun, the AGO said.
It also said the polytechnic did not promptly follow up on outstanding course fees. This meant course fees totalling $240,000 for 304 bills had been outstanding for periods of time from six months to 3½ years as at Nov 15, 2023.
AGO’s test-check on 45 of the 304 bills also found that there was inadequate follow-up on 43 bills totalling $95,600.
NYP did not attempt to recover the debt via phone calls or reminder e-mails, though this was required by its procedures, AGO added.
NYP has since recovered some $110,000, or 46 per cent of the outstanding course fees, as at April 2024, while writing off another $30,000 from 62 bills. But the AGO said the school should put in place procedures for prompt billing and collection of CET course fees.
It should also ensure these procedures are consistently applied and enforced, as the longer the fees remain unpaid, the lower the likelihood of recovery, the AGO said.
MOF responds to Auditor-General’s findings
In its statement, MOF said the AGO audits are crucial for maintaining public trust, accountability and transparency in the management of public monies.
The Government will continuously undertake efforts to strengthen governance capabilities, processes and systems across agencies, MOF said. It added that good practices highlighted will be communicated across public agencies to raise governance standards.
MOF said the Government will continue to improve on the three main areas where lapses were uncovered, including by better using technology.
The Government is also committed to strengthening the capabilities of public officers and consultants involved in managing complex construction projects, said MOF.
MOF said it launched a built environment procurement competency framework with the Building and Construction Authority in 2023, and is working with the authority on a course to train public officers and consultants to administer a common contract form to be used for all public sector construction projects.
“The public service remains committed to upholding values of integrity, service and excellence,” MOF added.
“We continue to innovate and improve to respond to higher public expectations, higher complexities of our work, and rising work volumes. We will continue to improve our policies, processes and systems to serve Singapore and Singaporeans better.”