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Auditor-General's Report: People's Association cited for multiple lapses
The issues flagged in the report, released on Jul 15, included procurement lapses, issues with the management of tenancy contracts, and a "clear conflict of roles" with a Citizens' Consultative Committee chairman involved in approving his own claims.
INGAPORE: The People's Association was flagged for various lapses in the Auditor-General's Report, released on Wednesday (Jul 15), including lapses in management of tenancy contracts in Community Club/Centre Management Committees (CCMCs) and procurement lapses.
LAPSES IN MANAGEMENT OF TENANCY CONTRACTS
Of the 91 CCMCs test-checked by the Auditor-General's Office (AGO), 35 did not obtain approvals from the relevant approving authorities for awarding 53 tenancy contracts, totalling S$17.78 million. Approvals were either obtained from committees which were not authorised to do so, or whose approval limits were below that of the contract values, the AGO said.
In addition, 10 of the 35 CCMCs did not obtain the relevant approvals for the direct award of 13 tenancy contracts without competition, worth a total of S$3.67 million.
"The number of lapses detected points to a weakness in the People's Association's monitoring of CCMCs' compliance with its financial rules with regard to tenancy contracts," said the AGO. PA has informed the AGO that is has since obtained covering approvals for the tenancy contracts.
LAPSES IN PROCUREMENT
Test-checks of nine grassroots organisations (GROs) - comprising four CCMCs, three Citizens' Consultative Committees (CCCs) and two Residents' Committees (RCs) - revealed non-compliance with PA's financial rules, including the award of nine contracts totalling S$152,600 prior to obtaining approvals; the award of 15 contracts worth S$565,300 from the wrong approving authorities; not seeking approval for 10 direct purchases from suppliers worth a total of S$53,700; and not inviting quotations in writing for 13 purchases totalling S$187,900.
"The common lapses found in most of the grassroots organisations test-checked indicate that they may not be familiar with PA's financial rules," the AGO said. "They also reflect a lack of oversight by PA."
The PA has since informed the AGO that it will review its procurement rules for GROs, to strike the right balance between competitive procurement and "expeditious decision-making" on the ground.
LAPSES IN ENGAGING TRAINING OPERATORS
According to the report, the AGO found common lapses in engagement of training operators and the collection of course fees across most of the seven grassroots organisations checked.
For example, four GROs engaged operators directly without calling competitive bids under eight contracts, totalling S$311,800. "Hence, there was no assurance that the GROs were able to obtain the most advantageous bids for the courses," the AGO said.
One RC awarded a contract for tuition services with an estimated revenue of S$1.11 million to the incumbent operator through a quotation exercise, when a tender was required. There was no evidence other operators were invited to quote, the AGO said.
Four RCs test-checked could not produce evidence that they had carried out audit checks on course fees - totalling S$1.26 million - collected by operators on the RCs' behalf, according to the report. The PA said that the RCs had conducted random checks on the collection of the fees, but these went undocumented. The course fees have been fully collected from the operator, PA added.
One RC did not take any action when an operator repeatedly delayed handing over course fees collected on behalf of the PA, totalling S$414,700, every month from April 2013 to July 2014. This exposed the RC to the risk of the operator defaulting on the payment of course fees, the AGO said.
LAPSES IN MANAGEMENT OF RELATED PARTY TRANSACTIONS
The AGO's checks found that the chairman of a CCC was involved in approving the award of two contracts worth a total of S$32,000 and corresponding payments to a company of which he was a member of the senior management. For one of the awards, another CCC member involved in the approval process was both a director and shareholder of the company, the AGO said.
The CCC chairman also approved payment for a purchase worth S$1,500 from another company where he was both a director and shareholder.
In these cases, the two CCC members involved did not declare their interests in the transactions, the AGO said. "As a result, there was no assurance that the transactions were conducted at arms' length."
PA acknowledged that the chairman should not have approved the payments, but checked and found that there was no irregularity in the payments as the amounts tallied with the quotations and the work tendered.
Test-checks revealed seven instances where the CCC chairman was involved in approving his own claims, totalling S$114,767 - a "clear conflict of roles", the AGO said. In three of these payments, no supporting documents were available.
The PA's response was that the chairman had inadvertently approved his own claims, and said that the vice-chairman and treasurer will endorse future payment vouchers instead.
MP for Sembawang GRC Khaw Boon Wan said the grassroots leader in question was from Admiralty CCC and that he has stepped down to facilitate a full investigation.
"I am glad that the Investigation Panel found no evidence of dishonesty. Nonetheless, it was a related party transaction that was not declared," Mr Khaw said in a statement. "The CCC will study the investigation report, and review its procedures to ensure that such lapses do not recur.”
Fellow MP for Sembawang GRC, Vikram Nair said he was saddened to learn of the findings by the AGO and that the grassroots leader concerned has "served with distinction for many years". The man is giving full cooperation in the investigation, Mr Nair said.
ISSUES WITH FUND UTILISATION REPORTS
The PA obtained excess funding from the Citizens' Consultative Committee ComCare Fund (CCF) from the MSF, amounting to S$84,394 over two years, due to errors and omissions in the updating of disbursements at seven CCCs checked.
The errors include duplicate entries of CCF disbursements, incorrect amounts recorded and inclusion of financial assistance that was not to be funded by the CCF. Disbursements were entered into the system by an officer without any independent checks, the AGO found.
These errors led to inaccurate CCF usage reports submitted by PA to MSF, ranging from an overstatement of S$225,703 in some cases to an understatement of S$120,210 for FY2012/13 and 2013/14.
In response, the PA said it was conducting a one-off reconciliation exercise for all CCCs to update and correct the CCF utilisation reports, meant to be completed by June this year.
Source: CNA/es