The People’s Association (PA) has been found to have “serious weaknesses” in its controls over overseas purchases and payments which could be exploited, said the Auditor-General’s Office (AGO) in its latest annual report.
According to the AGO report for the 2017/2018 financial year, lapses in the PA’s procurement for festive street light-ups and the management of welfare assistance schemes were also discovered.
AGO staff conducted test checks on 15 tenders amounting to $1.68 million for the Mid-Autumn Festival 2016 and Chinese New Year 2017, and six quotations amounting to $243,400 for the Chingay Parade 2017. These events were organised by PA and one of its grassroots organisations (GROs).
The checks found that the PA and one of its GROs had not adhered to the government’s procurement principles of open and fair competition, transparency and value for money for two tenders and four quotations, which amounted to a total of almost $630,000.
The tenders were for the manufacture of decorative items for street light-ups for the first two events. The two tenders were awarded to the same overseas manufacturer, which had been awarded the contracts each year since 2014.
In its proposal for the Mid-Autumn Festival, the company had listed additional costs such as accommodation for its workers during their stay in Singapore and transportation charges for materials. But the GRO did not consider these additional costs on top of the tender price in its evaluation when comparing the price for the proposals.
The same company was also the sole tenderer for the Chinese New Year light-up, whose bid also included additional cost items that the GRO did not mention when seeking approval for the tender.
Furthermore, the bid was accepted after the specific closing time and the company was allowed to submit two revised tender proposals in order to revise the quantity of and lighting effects on the lanterns and, consequently, the bid price after the tender had closed.
“Such lapses could lead to allegations of unfair practice,” said the AGO.
The PA attributed the procurement lapses to its procuring team’s “inadequate understanding of government procurement guidelines and operating under time constraints”. It also told the AGO that it would improve staff understanding and compliance with government procurement requirements, and work to ensure proper contract management documentation.
Lapses in overseas purchases
The AGO’s test checks on overseas purchases and payments for costumes and accessories for Chingay Parade 2017 also revealed potentially exploitable lapses.
The weaknesses included not adhering to procurement principles and weak controls over payments. There were also tell-tale signs on some supporting documents submitted for reimbursement claims which indicated that they might not be authentic.
For example, the PA allowed one of its officers to make overseas purchases amounting to $142,200, which were paid for in cash or through a remittance agent. The officer subsequently claimed reimbursements using cash sales receipts, some of which showed signs that left their authenticity in doubt.
Thus, there was no assurance that the amount of reimbursement claimed by the officer was the actual amount of cash paid to the vendors.
Lapses in welfare assistance schemes
In its test checks of welfare assistance schemes administered by GROs from April 2016 to June 2017, AGO found that cash gifts and assistance in-kind, which included supermarket vouchers, food vouchers and groceries given to needy residents, were not properly managed.
Consequently, there was no assurance that welfare assistance was given only to eligible applicants and that vouchers and groceries were properly accounted for.
The AGO’s test checks at nine GROs found that three GROs did not have documentary evidence of assessment to substantiate the eligibility of recipients for assistance in-kind – totalling $123,600 – and cash gifts – totalling $4,500 – given out at festive events to 48 of the 177 recipients who were test-checked.
This was not in compliance with the rules and regulations of the Citizens’ Consultative Committee Central Development Welfare Fund.
The PA explained that applicants were interviewed and assessed for welfare assistance but the assessments for eligibility were not documented. It also acknowledged the need to document the eligibility of recipients and will put in place procedures to standardise the evaluation process across GROs.
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