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Government declines to further investigate improper payments made by MOH amounting to $4.08 million

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Senior Minister of State for Law and Finance Indranee Rajah extinguished talk of further investigation into improper payments made by the Ministry of Health (MOH) amounting to S$4.08 million, in Parliament yesterday.

The Auditor-General’s Office (AGO) had flagged MOH for spending S$4.08 million dollars on “supervisory staff” for the construction of Ng Teng Fong Hospital without verifying the need or reasonableness for this expenditure, in July. MOH also did not seek appropriate approval from its approval authority for this expenditure.

Acknowledging that the audit can trigger a forensic investigation, if there is reason to do so, the Minister stated that there will not be a forensic probe into this case since proper procedures were in place and the lapses were due to human error.

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Rajah was responding to Workers’ Party Member of Parliament, Png Eng Huat, who had questioned whether government agencies found to have lapses will be instructed by the AGO to investigate improper payments and recover the money.

Png also questioned the basis upon which the MOH had concluded that there fraud was not committed, despite the lapses discovered by the AGO.

Rajah asserted that the rules and processes instated at the MOH are adequate but were just not complied with. She also made a jibe at Png’s expense, that he “may have misunderstood the nature of an audit.”

The Minister was perhaps alluding to the lawsuit the only opposition party in Parliament was recently slapped with, over improper payments and town council governance lapses discovered in an audit.

Rajah further elaborated that the AGO selects samples from the accounts to determine if  the system as a whole is robust. She added:

“And if it picks up a point that the system in itself has got inefficiencies or deficiencies, it will highlight it.”

Interestingly, the improper payments amounting to S$4.08 was not the only thing the AGO flagged in its report in July.

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MOH’s payment of another S$30.09 million to hospital contractors made for contract variations was also marked by the AGO in the same audit report, for being inadequately scrutinised by the appropriate authorities.

It had been revealed that the agent employed by MOH had not complied by the Ministry’s requirements that payments under S$80,000 be approved by two signatories and that payments over S$80,000 be approved by three signatories when the agent sought approval by only one staff.

The AGO said, “The lack of required level of checks increased the risk of fraud. The fact that MOH was not aware of the agent’s non-compliance indicated that it did not exercise adequate oversight on the agent.”

The AGO also faulted MOH for irregularities in managing 40 variation works in 10 other projects. Again, approval for these works was not sought from the appropriate authorities and in many instances, work commenced before formal approval was given. The variation works amount to S$3.76 million.

Besides this, the Ministry was flagged for wrongful payments made under the ElderCare Fund which is meant for subsiding nursing homes run by Voluntary Welfare Organisations. MOH had overpaid S$48,000 to two service providers and underpaid two other service providers by S$12,300.

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