Statement by the Ministry of Finance on The Auditor-General's Report FY2019/202007 Sep 2020
On behalf of Ministries and public agencies, the Ministry of Finance (MOF) would like to thank the Auditor-General and her officers for the FY2019/20 audit report and recommendations. The Government has accepted all the recommendations, and agencies are working on the necessary follow-up actions.
2 The Auditor-General has issued an unmodified audit opinion on the Government Financial Statements. This is an independent verification that the Government’s accounts are reliable and prepared in accordance with the law. Public funds have been properly accounted for.
3 The report highlights areas for improvement in IT controls, procurement and contract management, operations management and grant management. Continuing with its thematic audit of grants, AGO’s in-depth thematic audit for this report focused on business grant programmes. AGO noted that Workforce Singapore (WSG) and Enterprise Singapore (ESG) had put in place policies and procedures to manage the grant programmes. Nevertheless, there was room for improvement, such as in applying evaluation practices more consistently, improving checks to ensure disbursements are in line with guidelines, and strengthening the oversight of programme partners which administer the grant programmes on WSG and ESG’s behalf.
4 Public accountability remains a top priority for the Government. Heads of the agencies concerned have reviewed each case and are taking active steps to address the lapses. Where relevant, remedial actions have been taken at a Whole-of-Government (WOG) level, to prevent recurrence of these lapses.
5 Agencies have verified that no confidential data has been compromised and no unauthorised activities have resulted from the lapses in IT controls. Agencies have also taken recovery actions for lapses involving overpayments.
6 WSG and ESG are working to address the observations raised in the thematic audit, by enhancing their guidelines, strengthening compliance and supervision, and leveraging on digital solutions, while taking into consideration the operating needs of the grant programmes and recipients.
7 For serious cases, investigations have been conducted or are ongoing. Action such as penalties, enforcement actions and disciplinary actions will be taken. The Government takes a zero-tolerance approach to fraud and corruption. There were five reports made to the Police arising from the Auditor-General’s observations this year. We will not hesitate to take action against cases of wrong-doing or fraud involving public monies by anyone, including public officers.
8 Additionally, we will continue with the following efforts to address the main audit findings.
9 IT Controls: The areas of weakness include: (i) review of privileged users’ activities, and (ii) management of account and user access rights. The Smart Nation and Digital Government Group (SNDGG) is addressing these areas systemically at the WOG level. We will implement technical systems to reliably automate the IT tasks relating to the review of privileged users’ activities and management of account and user access rights. This will minimise human error and focus attention on higher-order security tasks.
10 SNDGG has started the pilot phase for the system addressing the lapse in the review of privileged users’ activities. SNDGG has also introduced an interim solution that automatically detects and notifies agencies of changes in employee records, such as when someone has left the organisation or changed appointments. However, the agency would still have to manually check which systems the employee had access to and remove the user accounts. The long-term solution would be fully automated end-to-end. We are on track to fully implement these systems by December 2022 (for the review of privileged users’ activities) and December 2023 (for management of account and user access rights) for 800 high priority systems, and one year later for all other systems.
11 Beyond these technical safeguards, we are also tightening the WOG IT audit regime, and instituting regular engagement and training of public officers to raise their awareness of IT governance and security controls.
12 Procurement and Contract Management: We will continue to enhance capability development and further strengthen procurement and contract management processes. In particular, we will emphasise the roles and responsibilities of approving officers and staffing officers to scrutinise proposals carefully. All procurement officers are required to undergo mandatory training. We are also enhancing our data analytics capabilities to better detect anomalies and lapses.
13 To improve the management of construction contracts, we have streamlined the approval process for variation orders and star rate items. MOF issued a good practice guide in 2019 to educate officers on the proper management of variation orders, including the use of in-principle approvals and assessment of star rate items. We will ensure that agencies and officers at different levels adopt these good practices. Agencies will also monitor governance indicators for contract management to track their performance.
14 Grant management: To provide central guidance and strengthen grant management, MOF issued a new Grants Governance framework and rules to all agencies this year. This is supplemented by a good practice guide that will raise the standard of grant administration across all agencies. The framework covers the different stages of the grant life-cycle, and will help agencies to ensure that grant schemes are effective and efficient in achieving their objectives, with adequate safeguards to prevent fraud and abuse.
15 We have grouped agencies with similar grant types together to coordinate information sharing, harmonise processes and develop system solutions to improve grant management. We will also deepen capabilities in data analytics, fraud detection and investigation.
16 Operations Management: Agencies will improve the governance and controls over their operations. This includes expanding the scope and frequency of inspections and audits. They are also strengthening their operations management capabilities, tapping on a wider range of surveillance and investigative methods. For example, PUB has installed additional online sensors at the NEWater plant to enhance its real-time monitoring capabilities of parameters used for payment, and JTC will reinforce its current investigative checks on unauthorised subletting and the illegal storage and sale of diesel.
Our Commitment to Good Governance
17 The Public Service is committed to upholding high standards of governance. Regular audits such as those by the Auditor-General play a key role in providing an independent assessment and highlighting areas for improvement. We will continue to take active steps to strengthen our structures, processes and systems to serve Singaporeans effectively and efficiently.
Ministry of Finance
7 September 2020