By Claire Huang, Channel NewsAsia, 12 Apr 2012
A Public Accounts Committee, comprising eight Members of Parliament (MPs), said it is concerned about the lapses related to procurement and contract management in four government ministries and some of the statutory boards under their charge.
In a report released on Thursday, the committee said the lapses undermine the government's procurement principles of open and fair competition, transparency and value for money and could erode public confidence in public sector procurement.
A number of these lapses have resulted in the government being overcharged and, in some cases, with no recourse for recovering the money, the committee noted.
The committee recommended that the Ministry of Finance (MOF) consider setting up a central procurement agency to improve public sector procurement practices.
The committee had sought the views of MOF on the matter as it is responsible for government procurement policies and rules.
The committee said that with such a central agency, smaller ministries and statutory boards can opt in to use the services it offers.
In addition, the committee feels that specialist career development and institutional knowledge on procurement and project management can be developed and retained in such a central procurement agency.
The committee had sought written explanations from four ministries on the procurement and contract management lapses.
The ministries concerned are the Ministry of Home Affairs (MHA), the Ministry of Information, Communications and the Arts, the Ministry of Trade and Industry, and the Ministry of Transport.
Two other ministries, the Ministry of Defence and Ministry of National Development, were queried on other irregularities.
In the case of MHA, the committee also called upon the ministry's permanent secretary to present oral evidence.
The committee said this was because serious lapses in procurement in the Singapore Police Force (SPF) had been reported in the last two Reports of the Auditor-General.
The committee said these suggest underlying broad-based weaknesses in procurement management in some departments of SPF.
In financial year 2010/2011, the Auditor-General observed irregularities at every stage of the management of two projects undertaken by the Police Coast Guard (PCG) which resulted in SPF being grossly overcharged.
The two PCG projects had a total contract value of S$6.86 million.
In financial year 2009/10, lapses were found in the management of a contract for the maintenance of surveillance camera systems of the Traffic Police resulting in SPF paying, over many years, for maintenance work which was not done.
MHA informed the committee that SPF has since recovered S$1.18 million from the contractors and S$53,154 from the project management company in respect of work items overcharged.
MHA is also seeking to recover an additional overcharged amount, estimated by the Auditor-General's Office (AGO) to be S$700,000, from the contractors.
MHA informed the committee that it would be implementing several measures to strengthen financial control, contract administration and project management across all departments in the ministry.
The committee also noted that falsified documents could have been provided to AGO by the project manager engaged by PCG for the two projects.
MHA said it had referred the matter to the Commercial Affairs Department (CAD) for investigation.
CAD has since referred the case to the Attorney-General's Chambers (AGC) for evaluation.
The Ministry of Finance (MOF) has attributed most of the procurement irregularities reported by the Auditor-General in the past five years to procurement officers' poor understanding of procurement principles and their lack of familiarity with procurement rules.
MOF has since changed existing rules and guidelines to make clearer the roles of key officers in the procurement process.
MOF would also be implementing several measures. They are: providing an online resource centre for procurement officers and pilot-testing a business intelligence tool for procurement planning and monitoring; informing every officer vested with approval authority of his responsibilities upon appointment to the role; and developing a checklist to help approving officers understand and better discharge their responsibilities.
The Public Accounts Committee comprised Mr Cedric Foo, Mr Ang Hin Kee, Mr Christopher De Souza, Ms Foo Mee Har, Mr Desmond Lee, Ms Jessica Tan, Dr Teo Ho Pin and Mr Zaqy Mohamad.
Central procurement agency a good idea but...
Specialised needs of govt bodies may be better served with two or three centralised units: Expert
By Yasmine Yahya, The Straits Times, 14 Apr 2012
HAVING a central procurement agency to handle all the Government's purchasing needs is a good idea, but there are hurdles to overcome, experts said.
A watchdog body mooted the idea on Thursday, saying a central agency could help smaller ministries and statutory boards that lacked expertise in managing large projects and procurement.
The Public Accounts Committee (PAC), which consists of MPs, made the suggestion in a report that focused on financial lapses by various ministries and statutory boards.
The committee noted that, in some cases, the Government had been overcharged for purchases and projects, and there were instances where it could not recover the money. In other cases, tenders were awarded and bills paid, even though the projects did not meet the requirements set out.
Singapore used to have a Central Supplies Office, which coordinated and purchased goods and services, including office supplies and furniture, for ministries and departments, said a Ministry of Finance (MOF) spokesman.
'However, in 1995, the Government decided to decentralise procurement functions to individual ministries and departments, to give them greater autonomy and flexibility, as well as increase efficiency.'
Then, the move might have been appropriate, but now, perhaps it is time to consider a move back towards centralisation, said Nominated MP Eugene Tan.
'This central agency would be able to reap economies of scale with bulk purchasing and, more importantly, we would have a pool of procurement experts who would be better able to do the job,' he noted.
A central agency would also be able to adopt a standardised set of policies and contracts with suppliers.
Associate Professor Sia Siew Kien from the Nanyang Business School said many multinational corporations are moving to centralise their global procurement units for the same reasons. Such moves are often supported by robust IT systems and careful management of procurement policies, he noted.
However, having just one central body to handle all government procurement and purchasing might not be the best answer for Singapore, he said.
Think about the sprawling complexity of an agency that has to order materials and supplies for both the Ministry of Defence and the National Parks Board, he noted.
' A military organisation would need very specialised knowledge and expertise to procure its unique equipment and supplies.'
It would be better to classify the ministries into several groups based on how similar their purchasing needs are. Instead of having just one centralised procurement unit, it may make better sense to have two or three centralised procurement units, one to support each group of ministries, he suggested.
Indeed, most major companies have more than one centralised procurement unit to handle global purchasing, Prof Sia noted.
Another challenge that the Government might have to deal with if it sets up a central procurement agency is redundancy of existing staff.
A central agency might not have the capacity to employ all of the procurement staff currently working at the various ministries and statutory boards, Prof Sia said.
Dr Tan said that one solution could be to retrain these workers and then redeploy them to other divisions within the civil service.
The MOF has said it will consider all options, including further centralisation of procurement, to address the issues raised by the PAC.
Last year, the ministry set up a Centre for Public Project Management (CP2M) to provide project management guidance to agencies, especially those that do not have in-house capabilities.
'CP2M works with public agencies to define the scope and key requirements of public building and infrastructure projects, to achieve value for money design and procurement,' an MOF spokesman said.
'CP2M also serves as a central repository of knowledge, and helps to build up project management capabilities in agencies.'
No comments:
Post a Comment