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Auditor-General (AGO) has just released its report for the Financial Year 2014/15 [Link]. It was submitted to the President Tony Tan on 1 Jul 2015.
AGO conducts its audits on a test check basis. As such, they do not necessary reveal all irregularities and weaknesses. However, they should help to uncover some of the serious lapses.
In the audit of the National Library Board (NLB), AGO found that it had procured electronic resources (e-resources) directly from specific vendors without any evidence of having considered other e-resources of similar nature.
NLB also did not have a robust system to verify that the vendors selected were sole distributors of the e-resources. In addition, NLB had renewed subscriptions to e-resources based on weak justifications.
“These weaknesses could lead to bias, unfair and inappropriate procurement practices,” AGO said.
In the financial year 2012/13, NLB spent about $7.3 million to acquire and maintain its e-resources collection which included electronic books and databases.
For all seven cases of procurement test-checked, AGO observed that there was no documentary evidence to show how NLB had selected those e-resources over other e-resources of similar nature. The procurement officer merely stated the merits of the proposed e-resource in the paper submitted to the approving authority.
NLB had procured all its e-resources directly from various vendors on the grounds that they were sole distributors of these e-resources. But AGO observed that NLB’s standard operating procedures required NLB officers to obtain, through the vendor, a letter from the e-resource owner to confirm that the vendor had been appointed as the sole distributor.
AGO test-checked 29 procurement cases and found 13 cases where NLB relied on scanned copies of letters provided by the vendors to confirm their sole distributorships of the e-resources. As the vendors would have vested interests in the procurement, NLB should confirm the sole distributorships directly with the e-resource owners, AGO said.
“By procuring the e-resources without going through a proper process of sourcing, selection, evaluation and justification, NLB may not have availed itself of the best offer from the market and may be subject to allegations of bias, unfair and inappropriate procurement practices,” it added.
AGO’s test checks also revealed that NLB had renewed the annual subscription of an e-resource for two consecutive years, although the usage rates had deteriorated over the years. AGO noted that for the first renewal, all three evaluators in the user group had recommended termination of this e-resource and for the second renewal, based on the usage rates, the subscription should have been terminated under NLB’s guidelines.
“AGO found that the justification put forth by NLB in the approval paper for subscription renewal for both years (despite the recommendation by the evaluators and the poor usage rates) was weak. Both renewals were justified on grounds that the vendor would implement initiatives to improve usage,” AGO said.
“There should be greater scrutiny by NLB to ensure that renewal of e-resources subscription is justified and that there is no wastage of public monies.”
Possible Wrongdoings in Procurement of Certain Electronic Resources
The most damaging is that AGO found indications that the above control weaknesses could have been exploited and there were possible wrongdoings in relation to procurement of certain e-resources.
“Following AGO’s recommendation, the Ministry of Communications and Information has referred the matter to the Police for further investigation,” AGO said.
NLB comes under the purview of the Minister of Communications and Information, Dr Yaacob Ibrahim.
NLB informed AGO that it has since established guidelines to ensure that the principles of open and fair competition, transparency and value for money are adhered to when procuring e-resources, such as using open tender as the default procurement method.
NLB also informed AGO that it had conducted two open tenders in 2014 which fulfilled 88 per cent of NLB’s e-resource requirements and that the rest were procured in compliance with Government procurement procedures.
In addition, NLB has enhanced its procedures to require its officers to obtain confirmation letters directly from e-resource owners regarding their sole distributorships and has tightened the evaluation process for subscription renewals.
http://www.tremeritus.com/2015/07/16/police-to-investigate-procurement-irregularities-at-nlb/
AGO conducts its audits on a test check basis. As such, they do not necessary reveal all irregularities and weaknesses. However, they should help to uncover some of the serious lapses.
In the audit of the National Library Board (NLB), AGO found that it had procured electronic resources (e-resources) directly from specific vendors without any evidence of having considered other e-resources of similar nature.
NLB also did not have a robust system to verify that the vendors selected were sole distributors of the e-resources. In addition, NLB had renewed subscriptions to e-resources based on weak justifications.
“These weaknesses could lead to bias, unfair and inappropriate procurement practices,” AGO said.
In the financial year 2012/13, NLB spent about $7.3 million to acquire and maintain its e-resources collection which included electronic books and databases.
For all seven cases of procurement test-checked, AGO observed that there was no documentary evidence to show how NLB had selected those e-resources over other e-resources of similar nature. The procurement officer merely stated the merits of the proposed e-resource in the paper submitted to the approving authority.
NLB had procured all its e-resources directly from various vendors on the grounds that they were sole distributors of these e-resources. But AGO observed that NLB’s standard operating procedures required NLB officers to obtain, through the vendor, a letter from the e-resource owner to confirm that the vendor had been appointed as the sole distributor.
AGO test-checked 29 procurement cases and found 13 cases where NLB relied on scanned copies of letters provided by the vendors to confirm their sole distributorships of the e-resources. As the vendors would have vested interests in the procurement, NLB should confirm the sole distributorships directly with the e-resource owners, AGO said.
“By procuring the e-resources without going through a proper process of sourcing, selection, evaluation and justification, NLB may not have availed itself of the best offer from the market and may be subject to allegations of bias, unfair and inappropriate procurement practices,” it added.
AGO’s test checks also revealed that NLB had renewed the annual subscription of an e-resource for two consecutive years, although the usage rates had deteriorated over the years. AGO noted that for the first renewal, all three evaluators in the user group had recommended termination of this e-resource and for the second renewal, based on the usage rates, the subscription should have been terminated under NLB’s guidelines.
“AGO found that the justification put forth by NLB in the approval paper for subscription renewal for both years (despite the recommendation by the evaluators and the poor usage rates) was weak. Both renewals were justified on grounds that the vendor would implement initiatives to improve usage,” AGO said.
“There should be greater scrutiny by NLB to ensure that renewal of e-resources subscription is justified and that there is no wastage of public monies.”
Possible Wrongdoings in Procurement of Certain Electronic Resources
The most damaging is that AGO found indications that the above control weaknesses could have been exploited and there were possible wrongdoings in relation to procurement of certain e-resources.
“Following AGO’s recommendation, the Ministry of Communications and Information has referred the matter to the Police for further investigation,” AGO said.
NLB comes under the purview of the Minister of Communications and Information, Dr Yaacob Ibrahim.
NLB informed AGO that it has since established guidelines to ensure that the principles of open and fair competition, transparency and value for money are adhered to when procuring e-resources, such as using open tender as the default procurement method.
NLB also informed AGO that it had conducted two open tenders in 2014 which fulfilled 88 per cent of NLB’s e-resource requirements and that the rest were procured in compliance with Government procurement procedures.
In addition, NLB has enhanced its procedures to require its officers to obtain confirmation letters directly from e-resource owners regarding their sole distributorships and has tightened the evaluation process for subscription renewals.
http://www.tremeritus.com/2015/07/16/police-to-investigate-procurement-irregularities-at-nlb/
