Measures Taken by the Ministry of Education to Address Lapses Observed in the Report of the Auditor-General for FY2023/24

1.The Ministry of Education (MOE) acknowledges and takes a serious view of the lapses observed in the Auditor-General Office (AGO)'s report on the management of school development projects. We have taken immediate steps to rectify them as flagged by AGO, and will step up efforts to strengthen our processes to avoid recurrence.

2.MOE has recovered $68,000 out of the estimated total net overpayment of $317,000 to contractors, and targets to complete the recovery of remaining funds by end-2024. Besides the projects audited by AGO, MOE will also check through all other ongoing school development projects for possible overpayments and other contract management lapses.

3.On the 20 construction contracts with delays in finalisation of accounts flagged by AGO, MOE had paid our contractors for all work certified complete by our appointed consultants prior to the audit¹. This amounted to 98.3% of the total contract sum. Of the outstanding balance of $6.41 million (equivalent to 1.7% of the total contract sum), MOE has since paid a further $1.8 million to the contractors. Our appointed consultants were unable to recommend MOE to pay the remaining sum as discussions with the contractors on the valuation of work done was still ongoing. We will engage the respective consultants and contractors directly, and pay the remaining balance by end-2024. To avoid a recurrence, payments to MOE's newly appointed consultants may be withheld if they are tardy in surfacing and closing variation orders.

4.MOE will expand the list of items under our contracts' Schedule of Rates, which spells out the contracted rates for specific works. This will minimise the need for additional quotations to substantiate cost assessments for items not in the current Schedule.

5.MOE has issued stern warnings to the consultants of the audited projects for not adhering to MOE's procedures. As an added deterrent, the lapses by these consultants will be taken into consideration in the Building and Construction Authority's Consultants Performance Appraisal System. As these appraisals are shared with other public sector agencies, it would impact the consultants' chances of securing future tenders.

6.To strengthen our oversight of consultants, MOE will step up on-site supervision and reviews for all our projects as well as recruit more specialised officers to verify and assess the reasonableness of rates and computations used by consultants.

7.On potential irregularities involving possible falsification of quotations submitted by appointed consultants and contractors, MOE has reported the matter to the police for investigation. MOE has zero tolerance for improper quotations, and expects our consultants and contractors to adopt the same stance. MOE will continue to train our officers to detect potential irregularities in quotations by consultants and contractors, through regular sharing sessions and attending relevant courses.

8.By end-2024, an IT system to improve contract administration will be put in place to reduce manual tracking of contract variations and account finalisation, and send timely reminders to all parties for unclosed variations processing.

9.MOE will continue to review and strengthen our management of processes and procedures, exercise greater oversight over consultants, and raise officers' competency in audit and procurement to prevent recurrence of the lapses highlighted and inculcate a stronger compliance mindset.

Footnotes

1. MOE appoints contractors for construction contracts and engages consultants to manage the construction contracts on our behalf.

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