Statement by the Ministry of Finance on the Auditor-General’s Report FY2020/2122 Jul 2021
On behalf of Ministries and public agencies, the Ministry of Finance (MOF) would like to thank the Auditor-General and her officers for the Auditor-General’s Report FY2020/21.
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.
3 The regular and thorough audits by the Auditor-General’s Office (AGO) contribute to an effective and accountable Public Service. The Government takes AGO’s observations seriously. Where there are lapses, we undertake corrective actions and learn from them. Where AGO has affirmed good practices, we share these positive practices so that all public agencies can raise their standards of performance.
Procurement and Contract Management, IT Controls and Operations Management
4 The Auditor-General’s Report identified lapses in the areas of procurement and contract management, IT controls and operations management. AGO also raised three areas that public agencies should pay greater attention to – viz. outsourcing of services, straight-through processing, and records management. We acknowledge the need to make improvements in these areas. The heads of the agencies concerned have reviewed each case carefully and are taking steps to address the lapses identified and enhance their agencies’ systems and processes. At the systemic level, we are implementing Whole-of-Government (WOG) measures in the following areas:
a. Procurement and contract management: MOF has recently set up the Government Procurement Function Office to strengthen WOG procurement and contract management. There are on-going efforts to review policies and processes and strengthen capabilities. For example, we will be reducing reliance on star rate items in contract variations, which are prone to lapses. Updated policies will be issued by end of this year. The Building and Infrastructure Centre of Excellence has consolidated procurement of construction services and project management for about $7 billion of projects from 27 agencies. This has improved procurement and contract management outcomes. In addition, MOF will enhance the contract management skills training for officers.
b. IT controls: The Smart Nation and Digital Government Group (SNDGG) and agencies are on track to implement technical systems to automate the review of privileged users’ activities for 800 high priority systems by December 2022, and all systems by December 2023. The implementation of the system to manage account and user access rights has been expedited from December 2024, which was the timeline announced last year, to December 2023. Half of the findings observed will be addressed by the solutions but at the time of the audit, these technical solutions had not yet been put in place. For the remaining findings, agencies have stepped up the training of officers with IT roles to raise their awareness of the fundamentals of IT governance and security processes. Over 3,000 or 60% of such identified officers have been trained, with the remaining officers to undergo training by March 2022.
c. Operations management: To manage the risks associated with straight-through processing of claims, we will ensure that regular post-payment analytics are conducted. A new human resource and payroll system with better controls will be rolled out later this year. We will also emphasise to public agencies the importance of strengthening processes for the management of inventory and records.
5 AGO conducted a thematic audit on facility management contracts under the Ministry of Education and the Ministry of Home Affairs. AGO noted that both Ministries have policies and procedures in place to manage their facility management contracts. AGO also observed a number of good practices by both Ministries, including the use of smart technologies to improve productivity and developing officers’ capabilities in facility management. At the same time, AGO suggested areas for improvement, such as strengthening the controls and supervision of contractors’ compliance with contractual requirements.
6 MOF has embarked on measures to consolidate facility management to drive the sharing and adoption of good practices, standardise processes and deepen capabilities across public agencies. By 2025, about 70 per cent of public agencies will have consolidated their facility management to achieve economies of scale and better outcomes. The Building and Infrastructure Centre of Excellence led by JTC is supporting these efforts by providing advisory services and training on facility management.
Strengthening Risk Management and Internal Audit
7 As the Public Service subjects its operations to the regular and independent scrutiny by AGO, it will continue to build up organisational and human capabilities to strengthen internal controls and manage risks – existing and emerging.
8 Two key WOG efforts are Enterprise Risk Management and Internal Audit:
a. WOG Enterprise Risk Management (ERM): Public agencies are strengthening their risk management framework and culture. The WOG Risk Management team (comprising officers from MOF, the Accountant-General’s Department and the Strategy Group in the Prime Minister’s Office) has been supporting public agencies to implement baseline ERM practices consistently and integrate risk management into policy planning and day-to-day operations. For example, in the design of grant schemes, public agencies are required to put in place safeguards to manage the risks of outsourcing grant administration to external partners. MOF will review public agencies’ ERM practices at regular intervals, with the next review in 2022.
b. Professional and collaborative Internal Audit (IA): Efforts are also ongoing to strengthen IA capabilities for greater effectiveness and productivity, as well as to further facilitate knowledge sharing and collaboration across the IA function. For example, public agencies are expanding the use of data analytics in conducting audits such as post-disbursement checks on payments and grants. Central resources such as the WOG IA manual, provide guidance and ensure consistency in audit approach and practices across the Public Service.
9 People are at the heart of our Public Service enterprise. We are disappointed with the instances of public officers fabricating or altering documents for audit that AGO had flagged, such as in the Ministry of Culture, Community and Youth and the People's Association. We take a serious view of irregularities in records furnished for audit. Such actions weaken the system of public accountability.
10 The Government takes a zero-tolerance approach to fraud and corruption. Every case will be thoroughly investigated. We will throw the book at officers involved in suspected fraud and corruption including lodging police reports for criminal investigations to be conducted. Beyond that, the heads of our agencies will continue to strengthen governance and controls to ensure that our system of integrity is maintained. They will also prioritise and intensify our internal audits to look out for any such wrong-doing. When such issues are detected, we will deal with them decisively.
11 Integrity is a core value of the Public Service. Our public officers are expected to conduct themselves properly. The standards of behaviour of public officers are outlined in the Public Service’s Code of Conduct and there are established whistle-blowing channels to report suspected offences. We will not waver in ensuring public accountability in the use of public funds as we continue to serve Singaporeans to the best of our efforts.
Ministry of Finance
22 July 2021