The AGO reported that 35 of the 91 CCMCs that were checked did not obtain approval from the relevant authorities for awarding 53 tenancy contracts amounting to $17.78 million.
Among the 35 CCMCs - which oversee activities and operations at their respective community centres and clubs across the island - 10 did not seek the relevant approvals for the direct award of 13 tenancy contracts without competition.
"This undermined the role of the approving authorities and the CCMCs did not adhere to controls that ensure competition was waived only under exception circumstances," the AGO noted.
Furthermore, test checks of procurement by nine grassroots organisations revealed that they have flouted PA's financial rules. They either did not seek approval for direct purchases from suppliers, or had obtained approval after the contracts were awarded or did not invite quotations for purchases. Together, these lapses involved contracts with a total value of nearly $960,000.
The AGO said that the common lapses in procurement found in most of the grassroots organisations that were checked indicate that they may not be familiar with PA's financial rules and "reflect a lack of oversight" by PA on the grassroots organisations' compliance with its financial rules.
Adding to the list of lapses and irregularities, the AGO also found "numerous errors and omissions in the updating of disbursements" from the Citizens' Consultative Committee (CCC) ComCare Fund (CCF) by seven of the eight CCCs checked.
In addition, it noted that five CCCs did not take into account cancelled and expired cheques to reflect the actual CCF used. As a result, these errors led to the submission of inaccurate CCF utilisation reports to the Ministry of Social and Family Development, which in turn led to PA obtaining excess CCF funding amounting to $84,394 over a two-year period.
Addressing each case in the AGO report, PA said it has since obtained covering approval for awards of the tenancy contracts in question, and would review its procurement and financial rules.
"The PA takes the findings of the AGO seriously," it said. "We have taken immediate action to rectify the lapses observed."
This article was first published on July 16, 2015.
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