SINGAPORE: The Auditor-General’s Office (AGO) has published its audit report for the financial year 2023/24, covering government financial statements, including the accounts of all 16 ministries and eight organs of the state.
The comprehensive audit also included three government funds, eight statutory boards, four government-owned companies, and two other accounts.
The report highlighted significant lapses in the management of school development projects under the Ministry of Education (MOE), culminating in a police report being filed over possible falsifications.
Lapses in Contract Management
AGO’s audit of MOE’s school development projects revealed serious lapses in contract management for three construction contracts, with a total value of S$171.8 million, for two primary schools and a junior college. Key findings include:
1. Approvals Obtained After Variation Works Commenced
AGO found that approvals for 45 out of 71 contract variations, amounting to S$4.4 million, were obtained after the variation works had commenced or been completed. These delays, ranging from one month to over four years, undermined the role of approving authorities and compromised financial prudence and discipline.
2. Lapses in Valuations of Contract Variations
In test-checking 12 contract variations totaling S$3.35 million, AGO found 55 instances in nine variations where the works were not properly valued. Errors included using incorrect rates and quantities, failing to deduct costs for undone work, and making payments for non-installed items. The total net possible overpayment to contractors was estimated at S$98,700.
3. Payments for Works Not Carried Out or Not in Accordance with Contractual Requirements
AGO’s site visits and checks revealed payments for unperformed or non-compliant works. Examples include S$49,400 for uninstalled student lockers and S$28,700 for missing textured spray coating on staircases. The estimated net possible overpayment for two contracts was S$218,400, with the assessment for the third contract still in progress. The total net possible overpayment across all contracts was S$317,100.
Long Delays in Finalisation of Accounts
AGO found delays in finalising accounts for two of the audited contracts and extended its checks to 18 additional contracts completed between 1 April 2019 and 31 March 2023.
All 20 contracts experienced delays, affecting the cash flow of contractors. Delays ranged from two months to over three years. MOE committed to tying consultants’ progress payments to the timely finalisation of valuations and developing an IT system by end-2024 to improve tracking and reduce delays.
Possible Irregularities in Quotations for Star Rate Items
AGO’s audit of 512 star rate items under four construction contracts found possible irregularities in quotations for 230 items, totaling S$1.34 million. This raised concerns about the authenticity of the quotations and value for money. MOE has since lodged a police report and emphasized zero tolerance for document falsification, committing to raising awareness through training and regular sharing.
MOE’s Response and Improvements
MOE has acknowledged the lapses and committed to several improvements. The ministry plans to move towards more outcome-based project specifications to reduce the number of variations.
To enhance oversight, MOE will increase on-site supervision and conduct more frequent audits to verify works and ensure that variation approvals are obtained timely.
Additionally, MOE will allocate more resources to scrutinize the rates and computations used by consultants in their cost assessments of variations.
To hold consultants accountable, MOE will issue stern warnings to those who fail to seek timely approvals, perform proper valuations, or verify on-site works. These warnings will be taken into consideration during the appraisal of the consultants.
Furthermore, MOE is developing an IT system, expected to be completed by the end of 2024, to improve contract administration, including tracking variations and finalisation of accounts.
This system will enable officers to take action more promptly and help rectify any under or overpayments, said the ministry.