SINGAPORE — The National Environment Agency (NEA) overpaid a project partner by $0.53 million for the operation of a waste-to-energy plant from December 2021 to January 2025.
This occurred as NEA did not check with the partner on an update of the project's financial model, which would have included necessary adjustments to costs. It only did so when the Auditor-General's Office (AGO) asked about it in August 2024.
This was noted in the AGO's annual report released on Sept 9 that highlighted key lapses by various ministries and public agencies for the 2024 to 2025 financial year.
NEA's project partner was required to provide waste incineration services to NEA for a period of 25 years from 2021 to 2046. It had to submit a financial model incorporating the cost, funding, operating and technical assumptions, and update it within 30 days when it found out certain costs like the land lease premium and grid connection costs — which AGO found the partner had known since 2018.
With the eventual update of the financial model, NEA estimated that it would pay $1.73 million less for the remaining contract period from February 2025 onward.
In addition, in 2022, NEA consented to the partner's restructuring on the premise that there would be no increase in payment arising from its change in shareholding. However, AGO estimated that NEA would be paying $8.09 million more post-restructuring.
The report said NEA has requested the partner to engage an independent auditor to verify the revised financial models. It would further review the financial models, before using them to adjust future payments and recover any overpayments.
It also stated that NEA said it had strengthened oversight of the partner by ensuring that more complex issues were adequately supported by in-house or professional legal and finance expertise when necessary, among other measures.
The AGO report also found these other lapses among these entities:
Home Team Science and Technology Agency (HTX)
HTX appointed a contractor for the renovation of its office space at $13.01 million, and a consultant to manage this project. HTX subsequently ordered 87 contract variations totalling $0.71 million.
AGO's checks on 16 of the contract variations that amounted to $0.60 million found lapses in their management.
It found three instances where works related to contract variations totalling $0.31 million began without approvals from the approving authority. In addition, the cost estimates were only provided to HTX after the work began.
There was also inadequate assurance that reasonable prices were charged to HTX for items that did not have rates listed in the contract. AGO found 14 such items amounting to $0.28 million in five contract variations where the consultant did not follow the required procedures when assessing the cost reasonableness of the items.
Other weaknesses identified included no proper verification of a contractor's claims before making payment, and delay in action taken to terminate a contract with a contractor who failed to fulfil its obligations.
AGO said that there was inadequate assurance that payments were made for services rendered and that public funds were well spent on this project. Although HTX had appointed a consultant to manage the renovation contract, HTX remained overall responsible, it added.
HTX said it would rectify the lapses and weaknesses, improve its contract management process and document all key decisions and assessments made.
Maritime and Port Authority of Singapore (MPA)
AGO checked five tenders called by MPA and found two instances of errors in evaluation scoring of a tender for vessel management services.
One of the errors could have affected the award of the tender worth $30.75 million for vessel management services for patrol craft, noted AGO.
In evaluating the tender, MPA used a method that assigned weightages to different criteria, and the highest scorer would be awarded the tender.
AGO found that the successful tenderer had submitted certificates awarded to its subsidiary, not itself, as documentation of its quality management system. It was then awarded four points by MPA. This was not in line with the evaluation criteria, as submitted documentation should not be from subsidiaries and points should not have been given.
Without the four points, another tenderer would have had the highest score. It had also put forth a $2.43 million lower bid price.
AGO also checked 37 payments — totalling $5.95 million — under seven contracts. It noted that there were inadequate checks to ensure that payments made were correct, and for services provided in accordance with the contract for 18 payments totalling $1.27 million under six contracts.
MPA said in a statement that it has since updated its evaluation protocols and put in place measures to ensure proper checks and verification of supporting documentation are done before future payments are approved.
AGO also found that MPA had collected $115.88 million in dumping and monitoring fees for the financial years from 2020 to 2023 as well as $0.70 million in two port dues concessions from January 2021 to March 2024. Both these fees had been imposed for decades, MPA said.
Such fees should be prescribed in legislation, noted the AGO. MPA said in a statement that it would amend legislation for the dumping and monitoring fees and review it for the concessions if they were continued.
Economic Development Board (EDB)
AGO's checks of 15 grant disbursements totalling $73,900 between April 1, 2021 and March 31, 2024 under the Singapore Global Network Funding Programme found lapses in the administration and weaknesses in the design of the programme.
The programme funds ground-up events to help grow and strengthen Singapore's global network of family and friends. The events engage overseas communities of Singaporeans and non-Singaporeans who have studied, worked and lived in Singapore.
During the audit period, reimbursements totalling $1.60 million were made to 370 applicants for 605 applications.
Of the 15 disbursements it looked at, AGO found no evidence that EDB had checked on the funding eligibility. It added that there was no requirement for applicants to declare any conflict of interest when submitting their reimbursement claims.
EDB said in a media statement that it has since tightened its reimbursement framework with additional checks. It did not elaborate on what these checks are.
Separately, AGO also checked five procurements made by EDB during the same period and found a lack of robustness in tender evaluation and award of contract for global media agency services.
As part of each tender proposal, tenderers had to quote retainer fees as well as submit remuneration data for any job roles specified.
AGO found that the awarded tenderer only submitted the remuneration data after close of tender. The total retainer fee of $9.45 million was quoted by the tenderer in its proposal at close of tender, but the retainer fee derived later using the remuneration data was $11.54 million. EDB accepted the remuneration data submitted after the close of tender without clarifying the discrepancy.
EDB said it has taken immediate steps to rectify lapses as flagged by the AGO, and will step up efforts to strengthen its workflow and systems.
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This article was first published in The Straits Times. Permission required for reproduction.
