Singapore's arts council paid ‘exceptionally high’ $410,000 for a bin centre: Auditor-General’s Office

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(A bin centre near the Victoria Concert Hall and Victoria Theatre. Photo: Yahoo Singapore)

A bin centre for Victoria Theatre and Victoria Concert Hall cost the National Arts Council (NAC) an “exceptionally high” consultation fee of $410,000, said the Auditor-General’s Office (AGO) in its annual audit.

The amount was equivalent to 87 per cent of the construction cost of $470,00 for the bin centre.

This was one of the findings in the AGO’s audit of 16 ministries, 11 statutory boards and several government funds for financial year 2015/2016.

The likes of the Ministry of Education, the Ministry of Defence and the Land Transport Authority were all singled out for lapses.

The AGO’s report highlighted four key areas: inadequate financial controls, weak governance over management of public funds, lack of oversight of administration of schemes and programmes and lapses in management of contracts.

‘The construction…was more complex’

The Ministry of Culture, Community and Youth (MCCY), which oversees the NAC, said that the high consultation fee was down to the fact that “the construction of the bin centre for this project was more complex and required significantly more design expertise, technical consultancy services and effort to coordinate with multiple parties”.

But the AGO noted that these reasons were not cited in the approval paper for the drawdown of funds. It also found that NAC had directly engaged consultants without conducting due diligence by first conducting a cost assessment on the reasonableness of the fee. The NAC’s parent ministry failed to use the norm methodology – percentage of the quoted fee over the construction cost of the works – to assess the fee.

Instead, the ministry “benchmarked the fee for the construction of the bin centre against other more complex projects. Had the norm been used, it would have been clear that the consultancy fee quoted for the bin centre was exceptionally high,” said the AGO.

MCCY has said that it will adopt the norm for cost assessment of consultancy fees for future development projects.

(Revised 10:50pm 1 August 2016: The second paragraph was changed to reflect that the consultancy fee paid was equivalent to the bin centre’s construction cost of $470,000. An earlier version said the fee made up the total construction cost)

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