As Chairman and deputy chairman of the PA, ah Loong and Zorro should do what Khaw implicitly asked the WP leaders to do and what Lui may or not have done (I’ll blog one of these days on why the Ah Loong administrations sucks in comparison with that of his dad’s: never a clear message). I don’t know if Lui is willingly (or unwillingly) taking the rap for the failures of the MRT system, or he juz going MIA or AWOL to look at his monthly CPF statement and feel happy).
In the Budget earlier this year, the PA’s expenditure was increased 51.3% to over $1 billion.
Minister Lim Swee Say, Minister (Prime Minister’s Office) and Deputy Chairman of PA, said that the budget allocated to the PA “reflects a higher level of commitment by the Government towards promoting social cohesion and racial harmony.”*
Yet the management of the PA didn’t ensure that the systems were in place to ensure that the records on how this money (and earlier funds) were kept in accordance with the PA’s own internal rules.
The Auditor-General (AGO) is not happy. 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.**
The AGO had conducted audits on only 115 GROs out of the 1,800 over GROs, which as TOC points out “is only 6.39 percent of the total GROs which PA is in charge of”.
As TOC points out, with the recent findings by AGO on the GROs, one would have to be concerned or extremely concerned that public money may be misused or misappropriated due to the lack of understanding of proper accounting practices set by PA’s financial rules.
There are 1,800 grassroots organisations under the People’s Association’s umbrella.
That’s a mere 6.4% of all the GROs.The Auditor General audited only 115 of them.
And already, the AGO found almost 40% of them with financial irregularities.
So while PA has said that it would conduct internal investigations and audits of its GROs, a more prudent method to ensure public monies would be lawfully used, is to get AGO along with a 3rd party auditor to audit the whole group of GROs under the PA.
In the meantime, the Minister of Culture, Community and Youth, Lawrence Wong, who oversees the PA, should be accountable and freeze the funds that are meant to be given to PA until the auditors can be sure that proper accounting process can be put in place for the GROs – and that public funds are duly protected from misuse.
Now given that Khaw had recommended that the AHPETC commit hari kiri, and given that the PM is the chairman of the PA and Zorro Lim is the minister-in-charge of PA, why is Khaw silent on them performing hari kiri? At the very least, he should recommend that they do deep bows and apologies at the National Day rally next week.
But then the PAP believes that “All animals are equal but some animals are more equal than others”:
But to be fair to the PM, Zorro and the PA and the PAP, rather than challenging the AGO and throwing smoke as the WP would (think AHPETC: there is lousy record keeping, so lousy that no-one knows if money has been stolen or not, and Pritam and his Auntie mentor have to do a manual check to report the correct arreas situation), a review by a newly formed Grassroots Finance Review Committee, to prevent a recurrence of procurement lapses flagged in a report by the Auditor-General’s Office (AGO) will take three months, the People’s Association said.
“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 in its report on Wednesday (Jul 15).
A statement released by the PA on Thursday said the committee will be chaired by a member of the PA’s board of management, Timothy de Souza. “Mr de Souza is a trustee of the Eurasian Association of Singapore and an experienced grassroots leader”, the PA said. He is also the auditor of a Neighbourhood Committee.
The other members of the committee are chief financial officer and member of the Auditing and Assurance Standards Committee of the Institute of Singapore Chartered Accountants John Teo Woon Keng and Mr Chiang Heng Liang, director of wealth management at an international bank and chairman of Kolam Ayer Citizens’ Consultative Committee.
The committee will be supported by PA senior officers, and they will be able to tap on expertise from the Ministry of Finance for advice.
The committee will review and recommend refinements to financial and procurement rules and procedures, especially with regard to AGO observations, the PA said. It will also propose measures to enhance compliance of financial rules and recommend measures to strengthen monitoring by staff. And, it will enhance training for staff and grassroots leaders.***
I’m still wondering what the WP are going to fix its accounting systems? Can some cybernut enlighten me? I got rezoned into Marine Parade and me and the neighbours (they are accountants, lawyers etc), and the really real Marine Parade residents I talk to, are wondering if the bad record keeping will continue. We know WP can keep the area clean and tidy, but can it keep proper financial records?
And we want to know if the WP can assure us that the excellent bus links to the other parts of S’pore will continue. Rightly or wrongly, we attribute these links to one Goh Chok Tok who was once the MP of the real Marine Parade.
Finally, the WP kept saying that a vote for the WP is a vote to keep the PAP honest. Who is keeping the WP honest? I mean someone has to take the rap for an accounting system that isn’t fit for purpose?
Will PritamS or his mentor step up for a deep bow? Or both?
But Ah Loong should set a good example, and take a deep bow next weekend. pigs will fly first.
*He said that out of the $339.6 million or 51.3% increase in the estimated Financial Year (FY) 2015 expenditure of the PA, $239.3 million (70.5%) is meant for the development of facilities for residents’ use.
These include the building of the Tampines Town Hub, construction of nine new CCs and two Water-Venture outlets; as well as to upgrade 28 existing CCs under PA’s 15-year upgrading cycle.
The increase of $100.3 million or 29.5% in operating expenditure will go into implementing the Pioneer Generation Ambassador programme where staff and volunteers reach out to seniors where they live, as well as supporting the work of the grassroots organisations (GROs) and Community Development Councils (CDCs) in assisting the needy and in building and bonding our multi-racial and multi-cultural communities.
**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.
***The committee will strengthen the supervision of its 1,800 grassroots organisations (GROs). “The committee will also recommend suitable measures that would enable our 37,000 grassroots leaders and volunteers to continue to serve the community’s best interests while maintaining good governance and sound financial practices.”
Additionally, a hotline has been set up to help GROs with queries on correct procurement procedures. The number is now active and has been communicated to GROs internally.
(CNA, I think)