Root Causes of Repeated Lapses Highlighted Auditor-General's Report for FY2020/2021 and Measures to Strengthen Governance

34 Mr Liang Eng Hwa asked the Minister for Finance (a) what are the root causes of the repeated incidents of weak controls, lapses and waste of public funds that were highlighted in the Report of the Auditor-General for FY2020/21; and (b) whether the governance and control culture within the public agencies can be further strengthened.

Mr Lawrence Wong: The Report of the Auditor-General’s Office (AGO) is an important element of the system of governance that we have put in place to ensure good internal controls and effective use of public funds. The public service takes corrective and preventive actions in response to the findings of the AGO report and other “health checks”, including internal audits and continuous improvement projects.

Even with these various checks in place, we cannot expect zero lapses given the scale and complexity of Government operations. We have more than 150,000 officers in the Public Service handling hundreds of thousands of transactions each year. There are more than 2,000 Government IT systems built over the years by different vendors and using different technologies.

The repeated lapses highlighted in the Report of the Auditor-General this year were in the areas of IT controls, procurement and contract management. In general, these lapses can be attributed to gaps in public agencies’ processes and human factors.

The lapses in IT controls were related to weaknesses in the review of privileged users’ activities and management of user accounts and access rights. Currently, many of these procedures have manual steps which are prone to human error. Agencies are implementing technical solutions to reliably automate these IT tasks. However, there will be scenarios that cannot be fully automated and may require human intervention.

Many of the lapses in procurement and contract management were related to inadequate control and monitoring of contractors and managing agents, and lack of documentation of decisions made or work done. This is more challenging in complex construction projects where there can be hundreds of contract variations due to changing circumstances as the project progresses.

The Government takes these audit findings seriously. The relevant agencies have reviewed each case carefully and are taking steps to enhance their systems and processes. At the whole-of-Government (WOG) level, we are implementing measures to strengthen governance across our agencies. For example:

(a) the WOG Risk Management team supports public agencies in implementing Enterprise Risk Management practices and integrating risk management into policy planning and operations.

(b) public agencies are strengthening internal audit capabilities through expanded use of data analytics in conducting audits such as post-disbursement checks on payments and grants. Central guidance and resources ensure consistency in audit approach and practices across the Public Service.

(c) to consolidate construction procurement and contract management, the Building and Infrastructure Centre of Excellence now oversees project management for about $7 billion worth of projects from 27 agencies. We are similarly embarking on efforts to consolidate the facilities management of government offices.

The Public Service is committed to upholding high standards of governance. The leadership sets the tone and culture for the whole Public Service, pays attention to governance issues, acts decisively when problems are detected and takes disciplinary action, where needed.

The Public Service leadership will continue to leverage on different platforms and channels to communicate expectations and share learning points, besides taking active steps to strengthen structures, processes, capabilities and systems.