The Audit Office (AGO) has published on Thursday (July 22) its audit report on government ministries and statutory councils for the year 2020/2021 and has noted several shortcomings relating to the Housing Board and Promotion (HDB).
The first lapse that stood out was the distribution of housing subsidies to ineligible applications. The report explained that CPF housing subsidies, which include family subsidies, individual subsidies, CPF housing improvements, and community housing subsidies, are distributed to households eligible for the purchase of HDB flats.
However, AGO conducted data analysis on resale applications with family grant and single grant from April 1, 2018 to September 30, 2020 and found that 1,152 applicants “may not be eligible ”For grants.
“Of the 1,152 applicants, AGO checked 97 applicants and found that HDB had distributed family grants or individual grants for a total (US $ 405,000) to 13 ineligible applicants (or 13.4 percent) , ”he said, adding that these applicants did not meet the eligibility criteria requirements such as non-ownership of private property and income ceiling.
Therefore, HDB told AGO that it will “improve controls on the processing and evaluations of CPF housing subsidies.”
He added that he will recover the grants awarded to the 13 ineligible applicants and will take enforcement action against those who had deleted material information.
Going forward, AGO also found falls in the reasonable price of individual offers. He explained that four limited bids (an acquisition value of US $ 18.47 million) of the 13 limited bids awarded from April 1, 2017 to March 31, 2020 were “inappropriate”.
For the three limited tenders (a purchase value of US $ 16.3 million) with a scope of work and similar requirements, AGO found that, although HDB had compared the single bid received for each tender with the its own estimates, but HDB did not take into account the volume of services that the bidder was expected to manage ”, which is an important factor that may affect the bid price.
If that’s not all, HDB also did not make any assessment to determine the good reasons why two of the individual bids were priced much higher than the third bid.
“HDB explained that its estimates were calculated using another factor that would indirectly take into account the expected volume of services. HDB also informed AGO that there were limitations when trying to make detailed price comparisons between individual bids due to differences such as the operating environment of each tender, ”the report stated.
With regard to the fourth limited tender, HDB issued a contractor with a tender document with details such as the drawings drawn and the technical requirements for the works to improve the roof installations, and has also requested a second contractor who provides a quote for a comparison quote.
However, it did not provide the second contractor with any written specification on the requirement for the improved works, which resulted in an “inadequate guarantee” of the price quoted by the second contractor, which is used to assess the reasonableness of the price given by the only offer.
Therefore, HDB noted that it could not give the written specifications due to the “urgency of the works”.
“AGO recognized the operating restrictions faced by HDB. However, a proper evaluation should be made to ensure that individual bids received from limited tenders are reasonably priced. HDB should ensure a sound assessment of the reasonableness of the price of individual bids, based on a similar comparison, ”he said.
Irregularities in quotations
AGO test-checks 194 budgets of 53 contract variations and a work order approved between July 2017 and November 2020, which include star items worth $ 3.88 million in nine construction contracts.
Of this fact, possible irregularities were observed in 40 appointments.
Star rate items refer to items where rates do not appear in the contract.
HDB had appointed consultants to manage its construction contracts and supervise the contractors.
For contract variations and work orders involving star rate items, consultants were assumed to assess the “reasonableness of the price” of the rates listed on contractors ’invoices or budgets using different methods, such as checking one or more budgets from other sources, according to the report. .
However, AGO controls found that “40 modifications or modifications to quotations could have been created to give the impression that they were obtained from other suppliers and that they reflected fair market rates.”
AGO then recommended that HDB investigate this matter. To that end, HDB said it has conducted an investigation and submitted a police report, adding that it will improve its control over the management of star fare items.
Inadequate monitoring of car park operations
There are 2,048 residential car parks in Singapore that HDB managed in February this year, with 1,894 car parks using the electronic parking system (EPS).
Test controls for four HDB residential EPS parking lots found that the monthly exception reports received by HDB were “inadequate” to monitor parking operations, according to the report.
In fact, AGO had detected similar observations about the inadequate supervision of parking operations and their implementation by HDB five years ago.
HDB informed AGO that it would continue to explore the use of the technology to improve its parking operations.
Unauthorized subletting of rented commercial premises
The last lapse highlighted by the AGO report is the unauthorized subletting where HDB commercial premises could have been subleased to some 7,800 commercial entities without their approval. This runs the risk of unauthorized activities at HDB facilities and financial loss due to insufficient collection of administrative fees.
“AGO’s test controls found that some 7,800 business entities had registered their addresses with the Accounting and Corporate Regulatory Authority through the address of the HDB premises, even though these entities were neither tenants nor sub-tenants of “This could mean an unauthorized sublease by tenants without HDB approval,” the report said.
He added: “AGO’s visits to 184 premises between December 2020 and April 2021 found 22 potential unauthorized sub-tenants in 20 premises. HDB monitored these cases and informed AGO that it would advise tenants to obtain HDB approval accordingly.
HDB also informed AGO that it will remind tenants who are not sub-tenants until it receives HDB approval.
In addition, HDB would also review and improve its inspection regime to better detect unauthorized subleases, ”the report said.