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Parliamentary Replies

Measures to Ensure Accurate Disbursement of Funds for Support Schemes

10 May 2021
Parliamentary Question by Miss Cheryl Chan Wei Ling:

To ask the Deputy Prime Minister and Minister for Finance (a) what measures are in place to ensure that different support schemes for the COVID-19 pandemic are properly disbursed; (b) how are the lessons learnt from overpayments under the Jobs Support Scheme being applied to other areas to ensure similar issues do not arise; and (c) whether more audits can be conducted in the post-pandemic period for sanity checks on emergency funds used in Budgets 2020 and 2021.

Parliamentary Question by Ms He Ting Ru:

To ask the Deputy Prime Minister and Minister for Finance (a) what processes are in place to ensure that any large-scale disbursement of funds to companies or citizens under the various Government schemes are done so accurately; (b) which individuals are accountable for and provide oversight over the accurate disbursement of funds whether at the relevant Ministry or within the Ministry of Finance; and (c) why those processes failed to proactively catch the error in the recent Jobs Support Scheme, levy waiver and rebate over-payments

Parliamentary Reply by Deputy Prime Minister, and Minister for Finance Mr Heng Swee Keat: 

The COVID-19 pandemic led to unprecedented disruptions to the global economy and to Singapore. The Government responded swiftly and effectively through many different schemes to support households, businesses and workers, with a primary goal to protect lives and livelihoods.

For all government measures including COVID-19 support measures, there are a series of checks to ensure that the grants are designed for and disbursed to the intended beneficiaries.

a. At the design stage, the scheme owner sets clear policy guidance on the target beneficiaries of the grant, the benefits they will receive, and the framework for assessing appeals.

b. At the implementation stage, the implementing agency ensures correct payout computation for each beneficiary and oversees the accurate and timely disbursement of funds. For the Job Support Scheme (JSS), the two implementing agencies are the Inland Revenue Authority of Singapore (IRAS) and the Central Provident Fund Board (CPFB). CPFB computes the payouts using information from its own sources and other agencies like the Ministry of Trade and Industry (MTI) for firm re-opening dates and the Immigration and Checkpoints Authority (ICA) for citizenship date. IRAS then disburses the payouts and handles the appeals. Before each JSS payout, IRAS performs internal checks on its computational logic and engages an external auditor to verify the computed JSS quantum for each beneficiary. IRAS also has an anti-gaming system to detect fraud and erroneous claims. For cases suspected of higher fraud risks, IRAS withholds the JSS payouts until the employers verify and confirm the authenticity and accuracy of their CPF contributions.

c. Post-disbursement, independent audits and data analytics are also performed to detect any anomalies and verify that funds were channelled appropriately to the intended beneficiaries. For instance, IRAS conducted post-disbursement checks, comparing the amount of JSS disbursed against past payout quantum to check for any anomalies. It was during this process that the errors in reopening dates were first detected. MSF also made use of data analytics to conduct post-disbursement checks on over 550,000 Temporary Relief Fund and COVID-19 Support Grant applications to detect false declarations.

d. The Auditor-General’s Office (AGO) also conducts regular audits on grant disbursements to ensure proper accounting and use of public funds.

The erroneous JSS payments and foreign worker levy waiver and rebate amounts arose from source data errors in the firm reopening dates. MTI had run sampling checks before passing the data to CPFB for the computation of the payout. But these sampling checks did not pick up the error, which affected about 4% of beneficiary firms.

The error was eventually detected by the processes that we had put in place to flag out anomalies for investigation and rectification. Specifically, IRAS first detected anomalies in end-November 2020 as part of its post-disbursement checks. At the same time, IRAS also received queries from some businesses about the quantum of the payouts they had received in the October 2020 JSS payouts. After thorough investigations, IRAS managed to trace the cause of the anomalies to errors in the reopening dates. MOM was also alerted to take remedial action as the same reopening dates were used for the computation of foreign worker levy waiver and rebates.

Since the incident, MTI has worked with MOF, MOM and IRAS to carefully examine and rectify the processes. Additional checks and steps have been instituted to prevent similar occurrences. The compilation of reopening dates is no longer done manually and is now coded with rules that have been reviewed and tested. An external auditor has also been engaged to thoroughly check and verify the reopening dates.

In addition to the checks and audits put in place by the scheme owners, the implementing agencies will also pay specific attention to the various COVID-19 support schemes as part of their internal audit.

The Government and our public officers are committed to doing our best, even in a crisis. In this case, the officers were working hard to disburse the funds quickly to businesses that were facing tremendous stresses during the Circuit Breaker.

Given the unprecedented nature of the pandemic and the sudden imposition of the Circuit Breaker, there was not enough time to put in place an enterprise IT system to manage the reopening process. Agencies had to manually process, at short notice, more than 1.8 million applications from businesses to resume operations. Unfortunately, mistakes were made in the process, resulting in the overpayments.

Nevertheless, our existing processes and checks enabled us to detect the lapse. Once detected, the agencies acted responsibly to put things right, and were upfront and transparent about what happened. We have learnt from this incident and will spare no effort to strengthen our processes, and to ensure that similar issues do not arise.