Government's Actions following Auditor-General's Findings of Document Alterations and Irregularities for FY2020/202113 Sep 2021
Parliamentary Question by Mr Pritam Singh:
To ask the Minister for Finance (a) what action does the Government intend to take with respect to irregularities found in audited documents reported in the Report of the Auditor-General for FY 20/21 where documents were altered, backdated, artificially created and falsified by officers across three Ministries and two Statutory Boards; (b) how many investigations have been undertaken arising from these irregularities; (c) how many individuals are involved for each Ministry and Statutory Board; and (d) what specific action has been taken against officers in cases where investigations have concluded.
Parliamentary Question by Mr Yip Hon Weng:
To ask the Minister for Finance (a) in the past five years, what are the types of recurring themes for issues flagged out by the AGO; (b) which are the Ministries and agencies that are repeatedly flagged out by the AGO; (c) why do these lapses and violations keep recurring; and (d) what action is taken to prevent their recurrence.
Parliamentary Reply by Second Minister for Finance, Ms Indranee Rajah:
Mr Speaker, Sir, may I have your permission to answer questions 4 and 5 together?
Members have asked questions about various lapses and irregularities highlighted in the AGO report. Let me first provide an overview, before I address the specific questions by Mr Singh and Mr Yip.
The government’s approach to governance is one of responsibility, transparency and accountability. To that end we have put in place governance structures at the Whole-of-Government (WOG) and agency levels to ensure proper accountability for the use of public funds.
At the WOG level, we have rules and guidelines on financial controls for public agencies carrying out finance functions. Central agencies such as the Smart Nation and Digital Government Group (SNDGG) and Grants Governance Office in the Ministry of Finance oversee common functional areas and work with agencies to ensure robust internal controls. MOF has recently set up the Government Procurement Function Office. There are also ongoing efforts to review policies and processes and strengthen capabilities, particularly for more complex areas such as IT and construction.
At the agency level, enterprise risk management and system controls are in place. Regular internal audits are conducted. The management of development projects and facility management are specialised areas requiring deeper technical expertise and experience. In addition to raising the capabilities of our officers, agencies are enhancing supervision of contractors and managing agents.
The AGO is an important part of our system of checks to uncover weaknesses and shortcomings. AGO adopts a risk-based approach in determining which areas to cover in an audit. AGO takes into consideration factors such as materiality and potential impact. Areas selected for audit could include areas with higher value expenditure, higher volume of transactions and key IT systems that deal with financial transactions. For example, as part of AGO’s annual audit of the Government Financial Statements, it examines the controls in place for payments to government suppliers and also audits the key IT systems used to process financial transactions, including those administered by MOF.
Given the scale and complexity of government operations it would be unrealistic to expect zero lapses. With 150,000 officers in the Public Service handling hundreds of thousands of transactions each year and more than 2,000 government IT systems built over the years by different vendors and using different technologies, human errors and process gaps will occur from time to time .
Given this, what is important therefore is that we must have the means to pick up such lapses and address them in an upfront and transparent manner. The annual AGO report, and other elements of our governance system outlined earlier function as regular “health checks” for the Public Service, and allows it to take corrective and preventive actions as may be necessary.
Mr Yip asked about the types of recurring lapses.
These have typically been in the areas of procurement and contracts management, IT controls and grants management, which share common factors like the scale and complexity of operations, a constantly changing operating environment, high volume of transactions and multiple touchpoints.
In the past five years, six agencies have been mentioned in the Auditor-General’s reports for recurring lapses, mainly in the areas of procurement and contract management, and IT controls. These are the Accounting and Corporate Regulatory Authority, the Ministry of Defence, the Ministry of Education, the Ministry of Finance, the Ministry of Health and the People’s Association. The lapses arose from gaps in agency processes and human factors. Let me share the actions we are taking to improve our processes and our officers’ capabilities.
First, on process improvements. To mitigate the risks associated with IT and our digitalisation efforts, we are deploying more central IT infrastructure and common services, which facilitate regular reviews at the WOG level. SNDGG is implementing central tools to automate agencies’ review of privileged users’ activities and management of user accounts. The former will be implemented for about 800 high priority systems by December 2022, and all applicable systems by December 2023, while the latter will be implemented for all applicable systems by December 2023.
Agencies regularly review and strengthen their own processes and systems to mitigate agency-level risks. For example, the Accountant-General’s Department has taken steps to enhance IT security and will be adopting the central tools to automate the review of privileged users’ activities.
Second, we are strengthening our officers’ capabilities. For example,
a. the Ministry of Finance has established the Finance and Procurement Academy, in partnership with the Civil Service College, to better equip public officers with relevant competencies. Officers involved in finance, procurement and contract management receive refreshers and updates on policies and practices. We will step up our efforts as the recent audit findings pertain to more complex types of procurement and contract management, particularly in the areas of IT and development projects.
b. Officers involved in IT roles are actively engaged on audit findings as well as learning points and ways to prevent lapses. Agencies have also stepped up the training of these officers to strengthen IT governance and security processes.
Irregularities in Audit Documentation
Mr Singh asked what actions are being taken in respect of the irregularities in the records furnished for audit. The Government takes a serious view of such irregularities. Every case is thoroughly investigated. Public officers found guilty of misconduct face disciplinary actions, depending on the nature, extent and circumstances of the breaches.
Five agencies were highlighted by AGO for possible irregularities in records furnished for audit.
a. Public officers from two agencies, MCCY and PA, were investigated for the fabrication of records.
b. MCCY’s internal investigation has concluded. Two MCCY officers admitted to fabricating claims records for services rendered by external parties as the officers could not locate the records when requested by AGO. However, the investigation verified that the claims were valid and the services were in fact rendered. While the claims were real, the conduct of the officers in fabricating the claims records was wrong. The officers were issued official warnings and their performance assessments were affected.
c. In the PA case, investigations are on-going. The officers involved have been suspended from duties pending the outcome of the investigations.
MHA had three cases of possible irregularities in records furnished by contractors. In two cases, police reports were lodged and the investigations have been completed. One contractor was charged in court; the other was given a 12-month conditional warning. In the third case, action has been taken against the contractor for non-compliance of contractual requirements. There was no fabrication of records by public officers in any of these three cases. However, two officers are undergoing internal investigations for the lack of due diligence.
For the remaining two agencies, MOE and HDB, investigations are ongoing. Appropriate action will be taken depending on the outcome of the investigations.
Integrity is a core value of the Public Service. We will continue to uphold strict standards in ensuring accountability in the use of public funds.