Internal Probe into PUB's Contract Irregularities Reported in AGO's FY2024/2025 Audit and Interim Governance Measures Implemented

18 Ms Nadia Ahmad Samdin asked the Minister for Sustainability and the Environment (a) whether the Ministry can provide details of its internal investigation that was conducted in relation to the irregularities discovered in PUB contracts; and (b) what are the interim measures being taken to strengthen the governance process.

The Minister for Sustainability and the Environment (Ms Grace Fu Hai Yien): Mr Speaker, may I seek your permission to take Question No 18 together with the two related Parliamentary Questions (PQs) by Mr Xie Yao Quan¹ and Ms Poh Li San that are scheduled for later Sittings? In addition, I will address two written PQs filed by Mr Foo Cexiang and Mr Shawn Loh for the 22 and 25 September 2025 Sittings, respectively. These five PQs relate to the Public Utilities Board's (PUB's) lapses highlighted in the recent Auditor-General's Office (AGO) report. I will respond to these questions together so that I can give a comprehensive reply.

If the Members are satisfied with the reply given, they may wish to withdraw their PQs.

Mr Speaker: Please proceed.

Ms Grace Fu Hai Yien: Thank you. My Ministry takes the AGO findings seriously and has conducted comprehensive internal investigations into the contract management lapses contained in the report.

AGO raised concerns over the authenticity of quotations provided for 23 items of variation works, or star rate items, under a construction contract for waterscape works, which amounted to a total value of $148,900. PUB has reported the matter to the Police to investigate if there were any fraudulent practices involved. It has also conducted a thorough review of similar contracts and did not find such irregularities. It will follow up with its own disciplinary actions should the Police investigations uncover any wrongdoing.

As for the case of documentation falsification for the contract on supply of biocide, PUB has completed its internal investigation and found this to be the fault of an individual officer. The Certificates of Analysis (COAs) were altered to include required information which has been omitted. The alterations were done to cover up the incompleteness of the original documents to be provided to the AGO auditors, but the contents were factual. It has issued a formal reprimand to the officer and will be downgrading the officer's performance grade.

On the AGO findings on the lack of comprehensive coverage of maintenance contracts for PUB's water quality analysers at private sector plants, it was already working on addressing the gap before the AGO audit.

It has since addressed the issue by using its other contracts to cover the scope of work. It installed water quality analysers as additional precautionary checks over and above the analysers installed by the private sector operators, the results of the analysers cross-checked daily with water sampling tests.

I would like to assure the House that PUB has instituted adequate checks to ensure the delivery of clean water that is safe to drink.

On the lapses related to supply of stocks, PUB has identified the root causes to be individual officers not being diligent in carrying out the required checks and inadequate supervision to enforce the requirements stipulated under the contracts, including verification of documents submitted by the contractors. It has taken appropriate disciplinary action against the six officers involved.

PUB has taken the following steps to strengthen its processes. First, it has increased the scope of its internal audits on procurement and contract management. This includes additional checks on star rates in contract variations and use of digital tools, including artificial intelligence (AI), to improve checks on contractual requirements and detect fraud.

Second, PUB has tightened the standard operating procedures (SOPs) for contract management, to ensure alignment with contractual requirements, such as requiring the submission of the original COAs. PUB has also tightened its SOPs for checks on the quality of the stocks used in its operations. It has confirmed that the quality of the stocks that it has received earlier met its requirements. It will take appropriate action against contractors who fail to meet their obligations, including those who submit non-compliant COAs. Where feasible, it is automating processes to reduce reliance on manual monitoring and the risk of human error.

Finally, PUB will continue to share the lessons arising from AGO's findings with all staff, as part of the regular staff training and communications on procurement and contract management.

Mr Speaker: Ms Nadia Samdin.

Ms Nadia Ahmad Samdin (Ang Mo Kio): I thank the Minister for the reply as well. I have two follow-up supplementary questions. The first is, I note that there were several individual officers involved. Other than the disciplinary action taken against these individual officers, will the Ministry also consider moving upstream to conduct, for example, refresher training across the board, as well as employing a digital automated or AI means upstream, beyond just on the audit.

The second supplementary question I have is whether any of this impact the speed and projects that are under these contracts.

Ms Grace Fu Hai Yien: Speaker, the short answer to the first question is no. I think the question has two parts. One is whether there will be training involved on other officers, including those that are more senior. The answer is yes, and will there be automation, yes. As I have mentioned in my reply, we will look at where technology is helpful, to help staff manage the contract requirements.

And as to the speed of implementation, that is definitely not something that we want to compromise on. This audit and this report have given PUB many good lessons and we would like to implement and run a tighter ship without affecting the effectiveness of the agency.

Mr Speaker: Mr Xie Yao Quan.

Mr Xie Yao Quan (Jurong Central): Thank you, Mr Speaker. I wish to state that PUB, as our national water agency, has a critical mission of ensuring Singapore's water security. I think it is also important to state for the record that, in my view, PUB has excelled in this mission by boldly innovating.

So, my question really is in the wake of the AGO's findings and PUB's response to tighten processes. How will PUB also ensure that it preserves and indeed, continues to grow this spirit of innovation, of boldness, of mission focus?

Ms Grace Fu Hai Yien: Thank you very much. I thank Member Xie Yao Quan for giving PUB an endorsement of its performance. I would like to assure Members that PUB will continue to do its work, being the water agency, and take pride in what it does for the country in terms of assuring our water safety and security. In fact, this report has told us that innovation can be undertaken in areas, such as operations, in procurement. And I think with more application of appropriate technology, our officers can be more effective and therefore, relieve themselves from the mundane work so that they can focus on more strategic and more important functions.

Mr Speaker: Mr Foo Cexiang.

Mr Foo Cexiang (Tanjong Pagar): Thank you, Mr Speaker. I would like to ask the Minister whether in view of the lapses, whether the Ministry has considered if the workload of the officers is a contributing factor to the lapses. As we understand it, the number of contracts that each officer does have to deal with could be very copious, so I would like to check the Minister's response.

Ms Grace Fu Hai Yien: Indeed, thank you very much to the Member for his questions and the care and concern for officers in PUB. I would like to say that the findings that have shown up in this audit reflected lapses, not so much because there is a voluminous amount of work, but rather in some of the processes that have been unclear and not properly carried forward.

In any case, if there are crunches in terms of resources, I have been told that officers are able to raise these issues with their supervisors. But more importantly, I go back to my point. I think there are technologies that can help us to make our operations a lot more automated and also less prone to human errors.

Mr Speaker: Last supplementary question, Mr Shawn Loh.

Mr Shawn Loh (Jalan Besar): Thank you, Mr Speaker. There were two types of errors here that were discovered by the AGO. One was human error, but the other one was more serious, which was a lack of integrity, resulting in the falsification of documents.

So, my question to the Minister is whether in the reprimand framework of PUB, is there a difference between the two? Because in her reply, both officers were reprimanded. And if there is a difference, do we then treat a lack of integrity with more seriousness?

Ms Grace Fu Hai Yien: I think that it may not be clear as to in which of the findings was there a lack of integrity. I think there is one that is being mentioned in the report about accuracy in the rates that is being used in the variation order – that is being investigated. We have been holding our assessment at this point in time, pending the outcome of the investigation.

The other issue with falsification, actually, it is an alteration. A staff had basically altered a document, in order to provide completeness of information on that document. We have found that the facts were not misrepresented. The documents were factual, so there was an error of judgement on the staff's part to use alteration as a way of providing the information that is required by AGO. There was not any suffering in terms of financial or operational issues that the agency has received.

So, on that note, and in reviewing the guidelines and the regulations that the Public Service have adopted, we have decided that reprimanding and downgrading of his performance grade is the right outcome for him.

Mr Speaker: Ms Poh Li San, last one.

Ms Poh Li San (Sembawang West): Thank you, Speaker. I thank the Minister. May I know if PUB or the Ministry of Sustainability and the Environment will be relooking at the panel of contractors that PUB typically uses, particularly the very specialised ones especially, and also the star rate contractors, in view of these findings?

Ms Grace Fu Hai Yien: As I said, the investigation is ongoing. There is no ground for us to doubt the integrity of parties that is involved, but should the outcome of the investigation show that there has been intention to defraud the agency, we will definitely do the appropriate action with regard to the contractor that is involved.

Having said that, PUB will always review the contractors from time to time, looking at its ability to supply and support the operations of the agencies.