The irregularities were discovered in the contract management for the development of Ng Teng Fong General Hospital, when the MOH had already engaged a contractor to provide site supervisory services for the project which commenced in October 2011.
During the audit, AGO found that MOH had paid up to SGD2.83 million by March 2015 for site supervisory staff separately engaged by its agent without having any contractual agreement for such services. MOH did not seek approval from its approving authority to bear the cost of this expenditure either, AGO added.
The 700-bed hospital in Jurong was completed in 2015 ̶ about half a year behind schedule.
MOH insists no wrongdoing
When the AGO investigated, the MOH said it was "not aware" its agent had separately hired site supervisory staff. It also told the AGO that there was no duplication as the contractor's staff number fell by five, which corresponded with the five the ministry hired.
However, the AGO found the contractor had only let go of three – not five – workers and hired six – instead of five people s– resulting in a net increase of three workers.
It also said that the MOH had not assessed the need and "cost reasonableness" of the service after it became aware of the engagement.
The MOH also continued paying one of the three people, who was "supposedly reduced" from the contract for approximately two years. It was also uncertain if it had to pay for the supervisory services after March 2015. As of 9 November 2016, this expense amounted to approximately SGD4.08 million.
Nonetheless, the MOH insists that there is no wrongdoing.
"There was no indication of fraud or corrupt practices which warrant further investigation, or deliberate wrongdoing by the persons involved in the projects," it said. It however, agreed that it will strengthen its project oversight processes and management controls.
Lapses in approvals for projects flag risk of fraud
The AGO flagged the irregularities in the approval-seeking process when changes were made to the hospital contract. The changes involved SGD30.09 million. "The lack of the required level of checks increased the risk of fraud," it stated.
There was "no assurance that MOH had exercised financial prudence in the use of public funds" or that the changes in the contract were scrutinised before approval was given, said the report.
Lapses in approvals for 40 changes to contracts of 10 other projects that involve SGD3.76 million were also discovered. Approvals were either not obtained, sought after work was commenced or were submitted to the wrong authorities.
In some cases, approvals were obtained "before the relevant assessment and recommendations were made," the AGO said.
Therefore, the AGO doubted on whether the changes were properly assessed.
The MOH asserted that it will work to "improve the competencies of our officers through more structured training on public procurement procedures." MIMS
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