SINGAPORE – The Audit Office (AGO) has marked several slips and possible irregularities related to the management of two major development projects of the People’s Association (PA), Our Tampines Hub (OTH) and Heartbeat @ Bedok (HBB).
In a statement on Thursday (July 22), the PA said it has taken immediate steps to review contract management in both developments, address the shortcomings identified and initiate rectification of any overpayment or underpayment. He also made a police report on the irregularities observed in OTH, including possible forgery of documents.
The PA had hired contractors to do small building works at OTH and a managing agent to manage the facilities and supervise the contractors.
The AGO checked a sample of payments totaling $ 1.27 million made between April 2018 and March 2020 and found possible irregularities in the supporting documents for 34 of the 36 payments.
The irregularities included the possible falsification of budgets, the alteration of supporting documents for payment on paper and the creation and updating of documents to give the false impression that the appropriate processes had been followed.
“Because the deficiencies are related to serious allegations involving forgery of documents, including third-party claims, PA has filed a police report and investigations are ongoing,” the PA said, adding that it had suspended staff involved pending the outcome of the investigation.
The PA also said it would establish a working group led by senior officials to strengthen procurement processes, contract and facility management, increase staff capacity and improve supervision of contractors and managing agents.
It will also appoint an external consultant to conduct a thorough review of its system of governance and oversee functions related to contract management of all development projects, the PA added.
The external consultant will have a “broad mandate” to review these issues and provide recommendations to strengthen PA oversight of contract management.
Other issues highlighted by the AGO include failures in the calculation of adjustments for price fluctuations of the main construction contract in OTH and weaknesses in the management and supervision of contract variations for the main construction contracts, both for OTH and for HBB.
This means PA could have overpaid its contractors about $ 2 million for building materials for OTH, such as concrete and steel reinforcements.
The AGO also checked 465 contract variations worth $ 26.48 million and found deficiencies in 252 or 54.2 percent of them. Contract variations are mutually agreed changes to the terms of contracts that are already in effect.
No proof of approval was found for 109 variations of the contract, while approvals for 142 of them were obtained only from one month to five and a half years after the start of the works or already completed. . There were also other issues, such as the use of incorrect rates, which led to excessive and insufficient payments.
The PA said it would work with consultants to determine the amount of overpayments or underpayments and take appropriate action.
The AGO also noted that two critical bidding requirements were not explicitly incorporated into the leases at HBB.
For one of these agreements related to the provision of childcare services, the PA had stipulated a limit on full-day childcare rates in the first two years of operation, from August 2017 until August 2019, in order to provide residents in the vicinity of the HBB with lower rates.
But the PA did not ensure that this requirement was made explicit in the lease. This caused tenants to charge rates 23% above the specified limit during the first two years of operation.
The PA said it was a “single agreement” and that the condition was not part of its standard rental agreement template for development projects.
He added that the tenant had agreed to return the difference to the affected parents in late July.
Another bidding requirement related to rent adjustments and service and maintenance costs due to a review of the tenant’s area. This caused the tenants to charge incorrect amounts.
The PA said it has since made the appropriate adjustments and returned the affected tenants.