Lapses Flagged by AGO Include Over-Disbursement of $1 Million Grants for COVID-19 Support by CAAS

By
Valerie Chua
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While the Covid-19 pandemic has given us many memories we wish to repress, some may still remember the momentary joy they received from the numerous stimulus grants they received from the government. 

However, while distributing an excess in grants may seem like a good thing (after all, nobody is really against the idea of monetary support), such over-disbursement implies an inefficient allocation of funds to individuals who may not require them. 

Furthermore, it also suggests that the people in charge of distributing those funds were not thorough with the disbursement process and that control over where the money goes needs to be tightened.

In the 2022/2023 audit report by the Auditor-General’s Office (AGO), which focused on Covid-19 Grants provided to public agencies by the government, CAAS was found to have over-disbursed S$1 million in grants.

AGO Report Finds CAAS’s Checks And Controls To Be Lacking: Funds Were Distributed To Employees Who Were Not Eligible For Grants

Image: https://www.caas.gov.sg/

Covid-19 posed significant challenges for those employed in the aviation industry due to the closing of borders and increased travel restrictions. 

CAAS administered several grant schemes throughout the pandemic to support those in the aviation workforce. From 1 September 2020 to 31 May 2022, CAAS disbursed S$114.52 million in funds. 

However, the test checks of disbursements made by AGO for the grant scheme during that period found an over-disbursement of S$1 million.

The lapse meant that the checks and controls administered by CAAS were inefficient in ensuring that the money was disbursed according to the terms and conditions stated for the grant. 

For the same grant, AGO also found that the eligibility criteria were either stated inaccurately or not stated in the grant agreements with the two companies. The lack of accuracy in the eligibility criteria called into question whether the grant was disbursed appropriately according to the intended eligibility criteria.

Upon further investigation, the over-disbursement was found to have been caused by erroneous claims made by companies, which either listed employees who were not eligible for grants or had stated non-qualifying amounts for their grant claims.

Out of the S$1 million, S$0.65 million was disbursed to five companies for 74 employees who were not eligible for the grant.

The other S$0.35 million were made to four companies for 447 employees, which had included non-qualifying amounts in their claims. 

That’s the equivalent of asking a parent for extra pocket money even though you didn’t need it.

CAAS clarified that they had hired an external auditor to check if the claims were following the criteria listed in the terms and conditions of the grant. Still, the auditor did not identify the errors AGO observed.

People’s Association Were Also Found To Have Several Lapses in Procurement Processes

The audit report by AGO also identified lapses in procurement and weakness in controls concerning the People’s Association (PA).

An example of such lapses was PA’s evaluation and awarding process to three of its tenders. 

The tender evaluation committee gave scores for certain sub-criteria that could not be substantiated or were incorrectly assessed. 

For two of the tenders, the evaluation sub-criteria and scoring methodology were only determined after the tenders had closed. (In simpler terms, it’s like a teacher only marking the student’s work after they have already received a passing grade)

This meant that the tenders were awarded despite potentially not meeting the sub-criteria to qualify.

Three grassroots organisations were also found to have renewed contracts with two previously disbarred or disqualified contractors.

AGO also found 53 instances of inappropriate money management practices for welfare assistance schemes at two grassroots organisations.

In the first grassroots organisation mentioned, funds were first transferred to staff members’ personal bank accounts before withdrawing them for cash disbursements to welfare assistance recipients at festive events. 

The second organisation also had a case where a staff member used their bank account to reimburse hawkers and merchants for their claims under a voucher assistance scheme.

However, those cases did not call for a big CPIB scandal, as AGO has reported that PA needed this procedure due to operational needs.

While AGO’s test checks did not find any misappropriation of funds in those two cases, transferring funds meant for grant schemes to a personal bank account is still a big no-no since it still poses an unfair risk for staff who have to bear the consequences if the money is unaccounted for. 

One good thing to have come out of this is that PA has made measures to improve its governance, procurement and oversight processes and implement significant structural changes to mitigate future risks.

These measures include rolling out a new payment option via PayNow to reduce the need for cash transactions during welfare assistance disbursements and setting up 17 field governance offices to strengthen compliance for ground operations.

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Valerie Chua
Email: [email protected]