Special Review of Controls and Checks for COVID-19 Pandemic-related Procurement and Expenditure

3 Ms Foo Mee Har asked the Deputy Prime Minister and Minister for Finance whether the Government will consider commissioning a special review to comprehensively review controls and checks in relation to the COVID-19 pandemic-related procurement and expenditure.

The Second Minister for Finance (Ms Indranee Rajah) (for the Deputy Prime Minister and Minister for Finance): Mr Speaker, MOF has started its review of the controls and checks in relation to COVID-19 pandemic-related procurement and expenditure since earlier this year. Respective agencies are conducting their audits on COVID-19 pandemic-related procurement and expenditure to ensure transactions are bona fide and that there is no erroneous payment. This is on top of the Auditor-General’s thematic audit of the COVID-19-related procurement and expenditure. The AGO’s findings on HPB, MOM and SLA were published in its report for FY2021/2022.

Drawing lessons from our COVID-19 experience and from the Auditor-General’s report, MOF is reviewing our guidelines on procurement, contract management and payment, to ensure our control measures are appropriate for future emergencies. MOF will also be issuing an advisory to agencies to strengthen the adoption of good practices and minimise financial risks during emergencies.

Mr Speaker: Ms Foo Mee Har.

Ms Foo Mee Har (West Coast): Thank you, Speaker. I thank the Minister for her response. I have two supplementary questions. First, to enhance the preparedness for future emergencies, I would like to ask the Minister what are the key measures the Government intends to put in place to minimise financial risks and better manage contracts and payments during emergencies.

The second supplementary question is, I note that in the Minister's reply just now, MOF has started its review of controls and checks for COVID-19 procurement and expenditure. We are now in FY2022. I wonder if the Minister can give us an update of the actual total COVID-19 expenditure for FY2020 to FY2021, the period that has passed.

Ms Indranee Rajah: Mr Speaker, I thank the Member for her supplementary questions. With respect to the first supplementary question, for COVID-19, the Government had put in place a number of measures to mitigate fraud risks, such as pre-disbursement checks, anti-gaming framework, ex post analytics and post-disbursement audit checks, to identify potential abuse or conflicts of interest. These measures have been effective in managing the risks involved in large-scale crisis operations.

As mentioned in my main reply, drawing from the lessons learnt, MOF is working with agencies to strengthen the adoption of good practices and minimise financial risks during emergencies. These measures include:

(a) adopting system checks on grant eligibility, including data verification at-source, to reduce the risk of errors from manual processing;

(b) using practical methods to assess price reasonableness for crisis buys, such as applying a percentage mark-up from non-crisis prices or actual costs incurred by suppliers;

(c) ensuring proper documentation of key decisions, such as policy changes and approvals across the lifecycle of a transaction; and

(d) conducting ex post checks, for example, through the use of data analytics, to detect potential irregularities.

With respect to her second supplementary question on what is the actual total COVID-19 expenditure for FY2020 to FY2021, our actual COVID-19 expenditure in FY2020 and 2021 was $72.3 billion. Of this, $13.4 billion was for our public health measures; $50.6 billion was to protect jobs through support for workers and businesses; and $8.3 billion was for direct household and social support. The total amount was lower than the $100 billion committed earlier due to two main reasons.

First, the Government had initially set aside the loan capital in FY2020 in anticipation of a tight credit market. But, eventually, the loan capital was not needed as MAS provided low interest capital to participating financial institutions for ESG loans through its Singapore dollar facility.

Second, we had some under-utilisation in public health spending. We had set aside resources for public health capacity to cater for potential downside scenarios but did not have to fully utilise these resources. The safe management measures and the cooperation of Singaporeans helped to avert severe public health outcomes. These under-utilisations were offset, however, by additional funding for the various support packages rolled out to support Singaporeans and businesses over the heightened alerts and stabilisation phases from May to November 2021. With these resources, we were able to save lives and livelihoods. Members can refer to MOF's occasional paper titled "Assessment of the Impact of Key COVID-19 Budget Measures" which was published in February this year. An interim assessment was also published in February 2021.