Public Funds Accountability

Date: 19 August 2009

Question No. 127 (by Mdm Ho Geok Choo, MP for West Coast GRC):

To ask the Minister for Finance in light of the latest Auditor-General's Report on lapses in the Civil Service, how can prudence and accountability in the use of public money be further nurtured.

Reply by Finance Minister Tharman Shanmugaratnam:

The Auditor-General’s Report indicates the need to continually enhance prudence and accountability in the use of public monies. MOF is addressing this through a Whole-of-Government framework for use of public monies. The framework comprises five main thrusts:

First, Instituting Controls. MOF puts in place expenditure policies, rules, procedures, limits and norms to ensure budgetary prudence and accountability. These policies and rules are issued to all government agencies for compliance.

Second, Encouraging Best Practices. MOF promotes Best Practices at the Whole-of-Government level to drive better usage of resources. Best Sourcing and Public-Private Partnerships are examples of such initiatives. Advisories such as on advertising and public relations expenditures are also issued to provide guidance for agencies.

Third, Promoting a Mindset of Thrift. Efforts are made to raise awareness of public servants on the need to be prudent in expenditure and ensure value for money through the Economy Drive, and the Cut Waste Panel, which is chaired by public sector leaders.

Fourth, Developing Capabilities. MOF has established a competency and training framework to systematically develop officers across government agencies with the necessary skills to undertake budgeting and procurement work proficiently.

Fifth, Monitoring Performance. MOF works closely with the Ministries to identify and review their strategic outcomes, outcome and performance indicators annually to ensure accountability.

In line with these five strategic thrusts, MOF has launched a number of important initiatives in recent years to further promote prudence and accountability:

A Value-for-Money (VFM) Office, established in 2007, enables MOF to systematically examine whether Government expenditures are achieving their intended outcomes and doing so in a cost-efficient way. What VFM amounts to is a selective, ex-post review of Ministries’ budgeting decisions - either for an individual Ministry or at a Whole-Of-Government level. VFM audits hence provide an important complement to the system of block budgeting, which gives Ministries autonomy over the internal allocation of their block budgets.

We are also making progress in ensuring effective land and building usage and management. Among other measures, MOF has revised the office space norms for public agencies last year to ensure more efficient use of space.

MOF will continually review our framework and will be following up with agencies identified in the AGO report to further enhance prudence and accountability. Even with a rigorous framework of rules and guidelines, there will unfortunately be instances of lapses. What is important is to have such lapses picked up in time and thereafter distilled as lessons. By doing so, we minimize the chances of bigger or more systemic problems occurring.

To specifically address the lapses in Procurement and Contract Management, MOF is implementing a new Procurement Competency and Training Framework that is aimed at raising the capability of public officers in procurement and contract management. A forum would also be conducted in Oct 2009 to cover lessons learnt from AGO’s observations.