Public Accounts Committee: Excercise Greater Diligence When Using Public Funds

The Public Accounts Committee has responded to a report by the Auditor-General flagging irregularities in the use of public funds for the financial year 2013/14.

In a report submitted to Parliament yesterday (Feb 4), the committee – comprising eight Members of Parliament, and chaired by Mr Cedric Foo – urged government agencies to “exercise greater diligence in managing public resources and to review their usage regularly so as to optimise their use and minimise wastage”.

Released in July last year, the Auditor-General’s report highlighted lapses in the administration of grants, schemes and programmes, as well as instances of weak management of resources which resulted in wastage.


Among the ministries and statutory boards cited in the report was the Ministry of Defence (MINDEF), which entered into an agreement with its contractor in 1995 to sublet land at a nominal rate of S$45 a year to provide services solely to MINDEF. However, the ministry did not raise the rent even after the contractor was privatised in 2000 and used the land for commercial activities.

MINDEF clarified that the contractor was a wholly Government-owned company prior to 2000, and there was no clause in the 1995 agreement to state that the land leased was not to be used for commercial activities. MINDEF told the committee that it has since entered into a new agreement with the contractor and would be charging it annual rental for the land used for commercial activities.


The Agri-Food and Veterinary Authority of Singapore (AVA) was cited for the under-utilisation of land, buildings and facilities at two of its sites, as well as assets being under-utilised or left unused.

In response, the Ministry of National Development (MND), which oversees the AVA, said that the AVA will conduct a comprehensive review on the usage of all its land, buildings and facilities by early 2015. It has since completed a review of its Sembawang site and submitted a land return proposal to the Singapore Land Authority, the MND said.

The AVA has also identified under-utilised equipment and machinery, and reminded departments to dispose of those no longer required. In addition, its finance department plans to carry out annual independent checks on the assets, the MND said.


The Central Provident Fund Board (CPFB) was rapped for erroneous Medisave claims by medical institutions, and has since taken several remedy actions: Formalising and documenting procedures on the follow-up of erroneous claims, improving the tracking system, and sending reminders to all restructured hospitals to improve their medical classification of claim cases and to make the appropriate refunds to the claimants’ Medisave accounts.

As of January 2015, 90 per cent of erroneous claims have been settled, the Ministry of Manpower (MOM) said.

The CPFB has also been working with the Ministry of Health (MOH) since 2011 to explore various deterrent measures against medical institutions that made erroneous claims, such as the possibility of imposing administrative or penalty fees.

According to the MOM, the majority of the erroneous claims arose from misinterpretation of the surgical procedures and guidelines. The MOH has since stepped up efforts to educate clinical practitioners and providers, and will update the list of surgical procedures claimable under Medisave or MediShield more regularly, the MOM said.


The Health Sciences Authority (HSA) was cited for “lax controls” over the approval of applications for the import of medicinal products. Of 1,479 import applications checked, 386 contained errors.

The committee was told that the HSA has since conducted checks on the 386 applications and verified that the products had been licensed or approved for importation. The MOH added that the HSA would be enhancing the current trade declaration system to ensure that information in the application forms are verified electronically.


The HSA was also rapped for awarding contracts to five incumbent contractors even though their tender proposals did not fully meet tender requirements. The agency has since tightened its procurement process and amended its procurement guidelines, the MOH said.

The Public Accounts Committee said it was concerned that the instruction manual on procurement did not specify if agencies should invite a fresh tender if variation works exceeded a certain percentage of the approved original procurement value.

In response, the Ministry of Finance (MOF) said there are “complex and multi-dimensional considerations” in determining whether a contract variation is justifiable. Setting a threshold may drive agencies towards calling contract variations as long as it is within the threshold and not considering calling fresh tenders, even when it may be more appropriate to do so, it said.

However, the MOF said it has recently enhanced its guidelines on contract variations. Where additional works are necessary, and especially if the additional works are substantial, calling fresh tenders remains the default option, it said.


During the audit of the National Parks Board’s (NParks) development of the Gardens by the Bay, certain documents were found to have been created and backdated to give the impression that they existed when the transactions took place.

An internal inquiry by the Ministry of National Development (MND) confirmed that an NParks officer had created and backdated 16 letters, purportedly issued by NParks to its suppliers, to satisfy audit queries. The same officer also arranged for the suppliers to issue a further 11 backdated letters – five of which were created by the officer on their behalf.

According to MND, Gardens by the Bay has taken disciplinary actions against the officer for misconduct. It will also tighten its internal procurement, project management and contract management processes to prevent future recurrence, the MND told the committee.



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