AGO found purchasing lapses inside CPF Board

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AGO found purchasing lapses inside CPF Board

July 24th, 2014 | Author: Editorial

The Auditor-General’s Office (AGO) released the Auditor-General’s Report for the Financial Year 2013/14 last week (17 Jul).

This year’s report which was submitted by Auditor-General Willie Tan Yoke Meng to President Tony Tan on 1 Jul and presented to Parliament on (15 Jul), highlighted lapses in the administration of grants, schemes and programmes, as well as instances of weak management of resources which resulted in wastage.

Among the ministries and statutory boards cited were the Ministry of Defence, Central Provident Fund Board, National Library Board, Media Development Agency, National Parks Board and National Environment Agency.
In the case of Central Provident Fund Board (CPFB), AGO reported that its test checks had revealed lapses in the CPFB’s procurement.

It test-checked 59 purchases made by CPFB without competition and found that more than half (32 cases) did not have compelling reasons for waiving competition.

The civil service procurement procedures do allow for waiver of competition when sourcing for products or services but the reasons given must be compelling such as the product or service is unique.

AGO said that in those 32 cases (totaling $604,000), reasons given included saving time and effort in procurement, preference for a particular supplier and the supplier being the incumbent or past supplier are insufficient to warrant a waiver of competition.

“Other suppliers might be able to meet the requirements and offer better value for money,” AGO said.

It added, “It is also important to ensure that Government procurement principles of transparency as well as open and fair competition are upheld.”

AGO also observed that CPFB deliberately split large purchases into smaller number of purchases with lower values so as to circumvent purchasing controls.

It noted that 40 small value purchases (totaling $77,900) and 18 quotations (totaling $591,300) appeared to have been split from 15 higher value purchases.

For each of the 15 cases, the split purchases were for renovation works which could be provided by a single supplier. In addition, for each case, the services were requested on the same day or within a very short period, which indicated that CPFB would have known upfront that similar services were needed.

“The splitting of purchases had resulted in CPFB bypassing the stricter controls imposed on higher value purchases, such as the more stringent processes for quotations and tenders, and higher approving authority for awards,” AGO said.

AGO also found that for adhoc repairs (totaling $84,200) carried out from Jan 2012 to May 2013, the approval to invite a sole supplier to quote and the approval for award of contracts were obtained after the works had been completed.

“For these cases, the role of the approving authority, which was to ensure that competition was waived only under exceptional circumstances and that contracts were awarded which gave the best offers, was undermined (by CPFB),” said AGO.

CPFB said it would ensure the approvals are sought before adhoc repairs are carried from now on.


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