Estimated Loss of Public Funds from Lapses in Grant Disbursements in Auditor-General's Report for FY2023/2024

Parliamentary Question by Ms Foo Mee Har:

To ask the Prime Minister and Minister for Finance in light of the lapses identified in the Auditor-General's Office report for FY 2023/24 regarding grants disbursement (a) what is the estimated amount of loss of public funds as a result of these lapses and overpayments; and (b) how can Government agencies enhance their capabilities to improve their oversight of disbursements so as to detect anomalies and suspicious claims.

Parliamentary Reply by Second Minister for Finance, Ms Indranee Rajah:

Each year, the Auditor-General's Office (AGO) conducts thematic audits in specific domains, including grants management. For FY2023/24, the focus was on selected parenthood support measures¹ managed by Ministry of Social and Family Development (MSF) and Early Childhood Development Agency (ECDA), where a total of $4.55 billion was disbursed from 1 April 2021 to 30 June 2023.

The AGO thematic audit is in addition to existing proactive measures put in place by government agencies, which include internal audit checks, risk management, leveraging data analytics to flag suspicious transactions and designing effective controls. These help to ensure good governance, reduce recurrence of lapses or human error, and minimise fraud.

AGO's audit found that in general, MSF and ECDA had put in place processes and controls across the various grant stages to ensure proper management of the schemes. Based on test-checks conducted, AGO noted over-disbursements of $446,000 in grants and subsidies. There were also indications of possible abuse of Government-Paid Leave Schemes (GPLS) for disbursements amounting to $1.16 million, and potential irregularities in withdrawals from Child Development Accounts (CDA).

MSF and ECDA have commenced reviews on cases with indications of possible abuse or potential irregularities. Where over-disbursement is established, MSF and ECDA will seek to recover the amounts in full to prevent loss of public funds. MSF has blocked further GPLS claims from employers suspected to have abused the system while pending investigations.

The Government remains committed to ensuring good governance and processes in our grants administration. The Ministry of Finance (MOF) issued a grants governance framework to all agencies in 2020. The framework sets out clear rules and guidance on the grants management process, from grant design, approval and disbursement, to monitoring and anomaly detection. This is part of the same 5-stage process that was referenced in the AGO report. MOF, in collaboration with the Civil Service College, will continue to strengthen capabilities in grants administration and knowledge of the grants governance framework.

MOF is also working with agencies responsible for grants management to uplift capabilities in data analytics, fraud detection and investigation. These capability building efforts include providing practical resources to agencies. For instance, a fraud risk management checklist has been developed by MOF and Commercial Affairs Department to help agencies better prevent and detect fraud or abuse through improved grant design, administration, and audit.