GROs should be fully audited, as AGO report shows

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Are the grassroots organisations (GROs) the most secretive organisations in Singapore? They would be, if you are looking for information about their finances or who their leaders are.

It is a strange question to ask, nonetheless, given that their armies of volunteers are ubiquitous in all housing estates. But it is a legitimate question, if you consider certain aspects of the organisations.

For example, there is little known about who the leaders of the various committees which make up the grassroots movement are; how and why these grassroots leaders are appointed to their positions; and how these organisations spend their funds or what their annual budgets are.

Also, who audits their financial accounts? Indeed, where are these records published?

These are questions which would shed light on the workings of the GROs, which are under the aegis of the People’s Association (PA).

There are about 15 different kinds of GROs in Singapore, with a total of 37,000 grassroots leaders and volunteers in the 1,800 GROs under the PA umbrella.

These GROs include the Citizens’ Consultative Committees (CCCs) which are at the very apex of the GRO pyramid, Residents’ Committees (RCs), Neighbourhood Committees, Community Club Management Committees (CCMCs), Youth Executive Committees, among others. (See here.) The government has just announced a new Residents Network (RN) organisation which will reach out to residents of both private and public housing.

So, who are the people involved in these organisations?

To find answers to the abovementioned questions would require some effort, as the now defunct website The Middle Ground (TMG) found out in 2015.

Looking for the leaders

The MIddle Ground

Looking for the names of the chairmen of the CCCs, for example, took almost Herculean efforts.

TMG had to comb through official websites such as those of community centres and town councils, and looked in the newspapers among the names of National Day award recipients, and then cross-referenced these with names on LinkedIn and Bloomberg Business profiles.

To confirm the names were accurate, TMG called the community clubs.

“It took us two entire days, when we thought we’d be done within two hours,” said the eventual report by TMG’s Bertha Henson, Arin Fong and Anna Fernandez. “Some willingly provided us with names, some lines were engaged for the whole day, some promised to get back to us later on in the day but never did and some CC numbers on the PA website were no longer in operation or changed.”

Even after 2 weeks of investigation, TMG still drew 18 blanks, and 20 names whose titles were unconfirmed.

TMG had to then approach the PA itself to ascertain the accuracy of what they had, and also to ask the PA to fill in the blanks.

“The PA confirmed the list and filled in all the blanks but declined to say more,” TMG said. “Instead it referred us to the rules and regulations governing CCCs and a book on CCCs published 10 years ago.”

And that is only to know the names of the chairmen of the GROs.

What then about the finances of the GROs?

Very little is known about this, despite questions having been raised in the recent past. The only information about the finances of these GROs is that they receive grants from the government.

The GROs receive funding from the PA, which comes under the Ministry of Culture, Community and Youth (MCCY). The ministry is headed by Grace Fu, who is also a member of the management board of the PA.

A litany of financial discrepancies

In 2015, the Auditor General’s Office (AGO) conducted a test audit of the PA and found numerous financial discrepancies among the GROs it spot-checked.

The AGO found 35 CCMCs had failed to get the appropriate approvals in awarding contracts, and nine GROs did not comply with PA’s financial rules. There were also “numerous errors and omissions” in the updating of disbursements from the CCC ComCare Fund (CCF) by seven of eight CCCs checked.

One of the irregularities involved 13 tenancy contracts, amounting to $3.67 million, which the management committees of community centres or clubs awarded without competition.

Another involved a CCC chairman who had approved his own claims, totalling $114,767, with 3 of the claims made without supporting documents. This, the AGO said, exposed the CCC to the risk of paying for “invalid expenditure.”

The chairman had also approved two other contracts, worth $32,000, to a company where he held a senior management position.

Additionally, he approved payment of $1,500 to another company where he held a directorship and was a shareholder.

Ownself Check Ownself

Straits Times

Following the AGO report, the PA appointed a 3-men panel to review the internal processes of the GROs, “especially those highlighted by the AGO.”

Curiously, the three members of the panel were grassroots leaders themselves, with two of them also CCC chairmen. (See here.)

Subsequently, the panel found no wrongdoing on the part of the accused CCC chairman.

Minister Lim Swee Say told Parliament that “there was no evidence of dishonesty”, and that the “irregularities” were actually borne out of “good intentions”. (See here.)

3 years later, in 2018, the AGO once again conducted a test check on the PA and its GROs, and once again it found “serious weaknesses” in its finances and procurement processes involving purchases and contracts worth millions of dollars.

Among the slew of failings were lapses in procurement and contract management for major events such as Chingay 2017 as well as Chinese New Year 2017. The AGO also found that welfare assistance schemes which included vouchers and groceries to needy residents were not properly managed.

The AGO noted that this was the second time it had found lapses involving the PA’s awarding of contracts.

People’s Association & GROs never fully audited by AGO

The PA and its GROs have never been fully audited by the AGO, although the PA is audited by its own auditors.

However, it was revealed in 2015 that its own auditors had given the PA accounts an “adverse opinion” for 10 years, from 2008 to 2011.

An “adverse opinion” is the most negative among audit ratings.

The PA explained that this was because the financial statements of related organizations of the PA, such as community clubs and community centres, were not provided to the auditors.

The PA said the accounts of the GROs belonged to the GROs, which were “operationally self funding”, according to a Straits Times report.

The PA claimed that all government grants and cost of staff support “were fully accounted for” in its financial statements.

A check with its website, however, shows no detailed financial statements available.

Its Annual Reports, for example, provide only a brief, graphical, one-page breakdown of its “financial highlights”, on the last page of the report.

PA Annual Report FY2016/17

Increased budgets despite AGO findings

The PA’s budget has been increased substantially in recent years. It has totalled almost $4b in the last 4 to 5 years. Yet, there seems to be no published, detailed information on how this is spent (although in its 2018 budget estimates, the MCCY did provide a breakdown of the PA’s budget, which mostly consisted of upgrading costs for community clubs.)

As for the GROs under the PA’s umbrella, problems come to light only when the AGO reports them, or when investigations are carried out following the AGO report, or when questions are raised following controversies.

An example of this is the funding provided by the PA to GROs for year-end overseas work plan trips.

2014: Sengkang West GROs retreat in Taipei

While the PA itself has premises at its National Community Leadership Institute (NCLI) for such events, some GROs prefer to hold their meetings overseas instead, in countries such as China, Taiwan, Indonesia, Sri Lanka, Thailand and Malaysia. 

The retreats are also sometimes held here in Singapore at venues such as Resorts World Sentosa.

2010: Braddell Heights retreat in RWS

In 2006, a member of the public wrote to the Straits Times forum page to question the money spent on one such trip.

An earlier report that year had said that 100 grassroots leaders in Aljunied would be going to Pattaya in Thailand for its work plan retreat.

The trip, the letter writer said, would cost an estimated $10,000.

“Is it really necessary to conduct the discussion at a foreign resort in the first place?”, he asked. He added that holding such events in Singapore would not only help support local businesses but also saved taxpayers’ money.

“The money saved could be used to help needy residents, students, the elderly and unemployed,” he said.

Letter by Ang, Straits Times

In its response, the PA revealed that for local and overseas venues for such retreats, “the GRO can subsidise 50 per cent per grassroots leader up to a maximum of $100.”

“Above that, they bear the remaining cost,” it said, and added that “all our GROs have set aside funds they had raised themselves to help needy residents.”

PA & GRO respond to Ang’s letter, Straits Times

The chairman of the CCC also responded and disclosed that “the volunteers decided to pay $260 each to have the retreat in Bangkok.”

Be that as it may, questions remain: how frequent are the overseas subsidised trips among the GROs, how many volunteers and grassroots leaders go on them, and how many of them are subsidised to the full $100? (And incidentally, is it fair for volunteers to pay for work-related trips, keeping in mind that they already do free work, as it were, in volunteering with the PA?)

A $100 subsidy may seem little by itself, but given that there are 37,000 grassroots leaders, the total could potentially be as much as $3.7m.

There is hardly any information on the costs of such trips published anywhere, and the details or outcome of the work plan meetings. One would have hoped that the town’s newsletters, or the publications of the PA would provide some details of these meetings.

The scarce information provided comes from non-official sources and mostly only include photos of the retreats, such as the following ones:

2014: Sengkang West retreat in Taiwan
2014: Punggol South retreat in Beijing, China

For such a large organisation, one would have thought that more information of its finances and processes would be made easily available to the public, in the name of transparency.

The latest AGO report on the lapses and irregularities of the PA and its GROs once again cry out for a full audit to be conducted by the AGO on them, like any other government department.

Why are the two audits carried out by the AGO only “test checks”, and not full audits? What are the reasons for not holding full audits especially when the PA’s budget is quite substantial, and serious failings have already been found both times?

Are the GROs the most secretive public organisations when it comes to who their leaders are and how they spend public funds?