Causes for $1 million Overpayment to Scheme Supporting Companies in Aviation Industry during COVID-19 Pandemic

Mr Dennis Tan Lip Fong asked the Minister for Transport regarding the Auditor-General’s Office finding of $1 million overpayment by the Civil Aviation Authority of Singapore (CAAS) to a grant scheme supporting companies in the aviation industry during the COVID-19 pandemic (a) how did the lapses take place; (b) what are the new checks and control measures which CAAS has since required its staff to observe; and (c) what are the prospects of recovery of taxpayers’ monies wrongfully paid.

To support aviation companies and workers during the COVID-19 pandemic, the Singapore Government committed more than $2 billion to the aviation sector. One of these schemes was to provide wage support for key companies in the aviation sector to retain core capabilities. Under this scheme, $114.52 million was disbursed from 1 September 2020 to 31 March 2022. The Auditor-General’s Office’s (AGO) checks found that there was an over-disbursement amounting to $1 million or less than 1% under this scheme during that period.

The over-disbursements were due to erroneous claims made for employees who did not meet some eligibility criteria. In addition, some claims had incorrectly included non-qualifying amounts, such as employer CPF contributions.

The Civil Aviation Authority of Singapore (CAAS) had established checks and controls for the claims submitted by the companies to be in accordance with the grant agreements and only for the purposes for which the funds were provided for. In particular, CAAS had required each company receiving the grants from this scheme to appoint an external auditor to check and verify that its claims were in accordance with the criteria in the grant agreement, before submitting the claims to CAAS.

As explained in the Report of the Auditor-General, for the over-disbursements identified, CAAS had disbursed these claims after the respective companies’ external auditors had verified that the claims had been properly prepared in accordance with the criteria in the grant agreements. The errors were not picked up by the external auditors before the companies submitted their claims to CAAS.

CAAS has since raised these errors with the companies concerned and their respective external auditors. CAAS also appointed an independent external auditor to verify the claims, in addition to conducting its own checks. We expect to fully recover the total amount of over-disbursement within the next three months.

While there were controls and processes in place, including requiring grant claims to be verified by external auditors, CAAS agrees with AGO’s recommendations and has taken steps to further strengthen the grant disbursement process.