1. On behalf of ministries and public agencies, the Ministry of Finance (MOF) would like to thank the Auditor-General and his officers for the FY2017/18 audit report and recommendations. The Government has accepted all the recommendations, and agencies are working on the necessary follow-up actions.
2. The Government is firmly committed to ensuring accountability and transparency in its use of public resources. The regular and thorough audits by the Auditor-General’s Office (AGO), and open sharing of its findings, reflect this commitment.
3. AGO plays a vital role in the overall system to ensure the proper use of public funds. The system comprises rules and processes that govern the use of funds, supported by audits to verify that good internal controls and risk management are practiced by agencies. These rules and processes that guide actions by our agencies, as well as the efforts of AGO and internal auditors, and the commitment by public officers and agencies to act on their findings, have enabled Singapore to remain one of the cleanest and most reputable administrations in the world.
4. AGO has provided an independent verification that the Government’s accounts for FY2017/18 are reliable and prepared in accordance with the law. Public funds have been properly accounted for.
5. We note that AGO’s in-depth thematic audit of Research & Development (R&D) grant programmes has found that adequate processes are in place for the application, evaluation and award of grants, although there remains room for improvement in the post-award management of grants.
6. AGO’s findings related to contract management, IT controls and financial controls in some of the agencies help us to focus our efforts to do better in these areas. The heads of agencies have reviewed each case and are taking steps to address the findings. Close attention will be paid particularly to recurrent issues. Where warranted, investigations have been convened to go deeper into the issues raised, and disciplinary actions taken against officers found responsible for wrong-doing. In cases where there have been overpayments, these have either been recovered or recovery action has been initiated. Agencies have also verified that no confidential data has been compromised as a result of the lapses in IT controls.
7. We are committed to stepping up efforts to address the issues identified by AGO. For instance, the Ministry of Home Affairs and People’s Association (PA) have taken steps to address the financial controls lapses highlighted by AGO, and ensure that their officers comply with the rules. Other efforts include:
a) Improving the Management of Grants
Last year, the Accountant-General’s Department (AGD) developed a reference guide on grant administration to help agencies. Building on these efforts, MOF and AGD are currently working with agencies to improve grant management policies and processes, and facilitate the sharing of good practices. We will complete the review by this year.
NRF and A*STAR are working with key R&D grant administering agencies to develop an Integrated Grant Management System (IGMS) which will facilitate the monitoring of R&D projects funded by them, and improve the productivity of grant administration. The IGMS has been rolled out to several agencies and will be fully implemented by early 2019. NRF is also reviewing its grant management processes to address the gaps identified.
b) Improving Contract Management
We agree with AGO that it is important for public agencies to exercise due diligence in managing their contracts. The total value of contracts managed by the Public Service today is two and a half times what it was 10 years ago, and growing. Improving contract management is a continuing effort, as public officers strive to meet growing demands, innovate in procurement models, and meet timelines. Agencies are improving on two broad fronts.
i) The first is to review current processes and harness technology.
For example, PA is enhancing its systems to strengthen its procurement and contract management functions. The Singapore Civil Defence Force is implementing a new logistics system which will improve its management of vehicle maintenance. These will be ready within the next 2 years.
ii) The second is to continually uplift the capabilities of public officers.
For example, the Civil Service College introduced a specialised programme on public sector contract management in 2016 and the Defence Science and Technology Agency rolled out a project management course in April 2018 to share its expertise with public officers.
We are building up specialised expertise in centres of excellence. For example, JTC Corporation was designated as the Building and Infrastructure Centre of Excellence in 2016 to provide project management and advisory services to agencies that require assistance in managing construction projects. As at July 2018, JTC is lending its expertise to help 10 agencies to project manage 28 projects worth more than $4 billion in total and is building up its capacity to help more agencies.
c) Strengthening IT Controls
We agree that it is critical to ensure proper safeguards for the integrity of IT systems and the data within. The Smart Nation and Digital Government Group (SNDGG) has stepped up efforts to strengthen IT governance across the public sector and increased the number and types of internal IT audits conducted. SNDGG has moved beyond compliance checks to include risk and impact-based assessments to help agencies strengthen their IT systems. Internal audits were also enhanced to move beyond process checks towards conducting tests to assess the effectiveness of the IT controls of critical systems. SNDGG has also worked with agencies to use automation to more efficiently track and manage access rights. At least 23 agencies have implemented such automated solutions, which notify system administrators to remove user access rights that are no longer required.
Given the increased use of IT across the public sector, there will inevitably be higher risks of IT lapses. To further mitigate such risks, SNDGG will step up efforts to educate the wider public service on good ICT management practices through regular engagements. In addition, SNDGG will continue to work with suitable partners to provide training to familiarise public officers with the Government’s ICT management policies.
A Journey of Continuous Improvement
8. Improving the financial governance of public agencies is an ongoing effort. Given the size of the Public Service, human error and lapses will occur from time to time. What is important is that when these issues occur, we address them honestly, learn from them and do our best to ensure no recurrence. In seeking to make improvements, we must continue to strike a sensible balance between strengthening controls and maintaining efficiency in providing services to Singaporeans. Otherwise our processes will be bogged down by ever tightening rules and controls, which can ultimately affect our service delivery. Singaporeans are best served by public officers who can do their work effectively and also efficiently.
Ministry of Finance
17 July 2018