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Media Release: Response by State Courts to audit observations in the Auditor-General’s Office Report 2022
- The Auditor-General’s Office (AGO) recently conducted an audit of the State Courts Towers development project and made audit findings relating to:
a. Possible irregularities in quotations for “star rate” Items
b. Development project savings not promptly declared
Possible irregularities in quotations for “star rate” Items
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AGO’s test checks found possible irregularities in quotations provided for 110 (out of 295) star rate items (totalling $2.19 million) under the main construction contract (with a contract value of $450.91 million). As a result, AGO assessed that there may be inadequate assurance that value for money had been obtained for the star rate items. As AGO had concerns over the authenticity of the quotations provided, AGO recommended that the State Courts carry out internal investigations.
- As there could potentially be a conflict of interest if such investigations disclosed any criminal offence(s), which may subsequently have to be dealt with by the Courts, the State Courts lodged a police report. Police investigations are ongoing.
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The goods and services that were the subject of this observation have been delivered. As a precautionary measure, additional protocols have been established to strengthen the management of star rate items, including the strict implementation of guidance from MOF on good practices in detecting irregularities in quotations that was issued in 2021.
Development project savings not promptly declared
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AGO observed that the State Courts did not declare project savings which had arisen from lower tender rates, to the Ministry of Finance (MOF) in a timely manner as required by MOF Finance Circular Minute issued in 2014. AGO highlighted that the purpose of the MOF Finance Circular Minute was to ensure fiscal prudence and discipline in the use of public funds, to enable MOF to redirect the savings towards other projects.
- For the State Courts Towers project, AGO highlighted an estimated savings of $40.17 million. These savings arose from lower tender rates as well as exercising strict fiscal prudence and discipline. Throughout the duration of the project, none of these project savings were drawn down by the State Courts. Proper oversight and financial controls were in place, which enabled the development project to be completed within budget and project timeline. A finance sub-committee closely monitored and regularly reported project budget utilisation and expenditure to a Project Steering Committee.
- The State Courts have acknowledged the observation of not complying with the requirement of the MOF Finance Circular Minute to declare the project savings to MOF within the stipulated timeframe after award of the tender. Going forward, the State Courts will ensure that project savings are reported to MOF within the stipulated timeframe through the enhancement of processes for future development projects. The State Courts will closely monitor implementation of the tightened protocols and financial governance and review it to ensure relevance and effectiveness.
ISSUED BY:
State Courts of Singapore
2023/07/19
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