Addressing Lapses in the Auditor-General's Report for FY 2013/2014

Mr Seah Kian Peng asked the Deputy Prime Minister and Minister for Finance in view of the Report of the Auditor-General for FY 2013/2014, what further steps are being undertaken by the Civil Service and Statutory Boards to address the lapses as flagged out in the report.

The Auditor-General's Office (AGO) conducts annual checks of Ministries with regard to financial statements, as well as internal controls and processes that directly impact on the financial statements. On a less regular basis, AGO also selectively audits other aspects of internal controls in the Ministries, either based on its assessment of risks or arising from public feedback. Statutory Boards are required to be

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audited annually by internal and private external auditors. In addition, AGO conducts audits of internal controls of nearly all statutory boards at least once every five years.

AGO is an independent body under the Constitution. Together with the internal and external auditors of our agencies, they provide critical checks in our system of governance. All lapses highlighted by AGO are reviewed by the top management of the respective agencies. This includes the Permanent Secretary, Chief Executive or head of agency who is held responsible for ensuring that appropriate follow-up actions are taken to rectify the lapses. These officers must also assess if the lapses are indicative of systemic risks in their agencies and put in place measures to minimise recurrences. Where appropriate, disciplinary actions must be taken against those responsible, including supervisors. Any suggestion of corruption or fraud is investigated promptly and thoroughly and the officer faces the full measure of the law, regardless of who he is.

These long-standing practices, together with regular reviews of rules and procedures, have helped to ensure that we have a system of governance and that is, on the whole, working well. Singapore is thus widely recognised internationally as having one of the cleanest and most efficient systems of government anywhere. Nonetheless, we take each report of a lapse seriously and seek opportunities for improvement.

In its report this year, the Auditor-General highlighted several areas for further improvement, including the administration of grants, Government schemes and programmes; management of land and assets; and Government procurement. Let me share some examples of the follow-up actions in each of these areas.

In the administration of schemes and programmes, NEA had omitted to follow up on some hawker stalls that violated tenancy conditions, resulting in inconsistent enforcement of rules. Apart from reviewing its procedures, the NEA will enhance its Hawker Centres Management System to have more robust tracking of adherence to tenancy conditions. Monthly reports will also be generated and reviewed by staff in charge of supervising the hawker centre inspectors to ensure that possible breaches are promptly investigated and acted upon.

In the management of land and assets, AGO identified cases of under-utilisation of buildings and facilities in AVA. AVA has since reviewed its requirements for buildings and facilities and is working with SLA to put the under-utilised assets to better use.

With respect to the procurement related lapses identified in the Auditor-General's latest report, I should point out that the majority concerned transactions which took place in or before 2011. Members will recall that we have in recent years taken major steps to

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strengthen public sector procurement rules and capabilities. Among other improvements, we had, in 2012, extended the minimum opening period for suppliers to submit bids for quotations from four working days to seven, and introduced further checks to ensure that single bids offered competitive terms. Since the new rules kicked in, the percentage of quotations receiving single bids has decreased to about 4% in 2013 from 15% in 2012. The Auditor-General has also noted in his report the steps taken by public sector entities to improve the procurement process and to strengthen staff training in procurement.

To reinforce the importance of good internal controls across the Civil Service and Statutory Boards, MOF earlier this year instituted a new requirement for all agencies to report their internal control measures, including key internal and external audit findings, as well as follow-up actions. In addition, agencies were provided with new data analytical tools to improve their oversight of financial transactions.

In summary, we have a system of governance that is working well and continues to be strengthened through new or updated rules and requirements. As is the case in any large organisation with a high number of transactions, it is not possible to achieve zero lapses. The Government relies on audits that are regularly and properly carried out to identify shortcomings and areas for improvement while heads of agencies have clear responsibilities to see through follow-up actions. Members and the public can be reassured that the Auditor-General's findings, in this and previous years, are carefully reviewed and acted upon.