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'Human failure' behind SLA fraud
Balance needed between efficiency and checks and balances: Ministers
By Rachel Lin
THE alleged fraud case at the Singapore Land Authority (SLA) was not the result of lax public sector financial rules but human failure, two ministers said yesterday.
Investigations have revealed that the root cause was a lack of vigilant supervision over the two former SLA executives charged with cheating the statutory board of $12.18 million.
The authorities have since recovered $10 million in cash and assets.
Koh Seah Wee, 40, and Christopher Lim Chai Meng, 37, are said to have conspired with several businesses to win IT contracts from SLA, and then submitted false invoices for goods and services that were not delivered.
Koh may also have cheated the Intellectual Property Office of Singapore (Ipos) of $286,000, using similar methods.
'Certain officers at SLA and Ipos did not exercise sufficient supervision over Koh and Lim and had not carried out their audit responsibilities thoroughly,' said Law and Home Affairs Minister K. Shanmugam in Parliament yesterday.
Both he and Finance Minister Tharman Shanmugaratnam were fielding questions raised by four Members of Parliament on the alleged fraud case.
Mr Shanmugam told the House that disciplinary action had been taken against two SLA officers whose oversight contributed to the alleged fraud. Investigations are still under way at Ipos.
Mr Tharman said that the Government had undertaken a review of its procurement practices after the alleged fraud was uncovered.
The review found that public sector procurement rules were fundamentally sound and in line with best practices in the private sector.
'I do not think we have a systemic problem,' he said. 'The rules and guidelines are not what explain what happened at SLA and Ipos. It was human failure.'
The Finance Ministry has reminded all government agencies of the importance of vigilant supervision to minimise the potential for fraud, he said. It has provided a checklist of questions that have to be asked on matters of procurement.
Both ministers stressed that Koh and Lim had allegedly worked within the existing rules.
Even the most stringent financial audit might not have picked up the . if, as in the case of Koh and Lim, all the documentation was in place, Mr Shanmugam said.
Nevertheless, both ministers acknowledged that SLA and Ipos had weaknesses in their internal audit processes.
The agencies have been working to rectify this. SLA has undertaken some reforms, including centralising procurement in one department and lowering the financial limit on transactions which certain levels of officers can approve.
The Government is looking into ways to improve the system, Mr Tharman added. It has encouraged the periodic rotation of officers with procurement responsibilities.
In fact, it was after one such rotation that the alleged fraud at SLA was uncovered, he said.
The Infocomm Development Authority will also help agencies better monitor IT maintenance and draw up guidelines for IT procurement.
The Auditor-General will pay more attention to IT procurement in its next audit cycle. At the time of the alleged frauds, the financial accounts of SLA and Ipos were not audited by the Auditor-General but by external auditors.
The Auditor-General's office cannot audit all 64 statutory boards in all areas of their operations each year, Mr Tharman explained. It had last audited SLA in the financial year 2007-2008.
The Government is scrutinising all transactions carried out by Koh and Lim, and those involving the vendors that Koh and Lim are said to have colluded with.
Mr Tharman assured the House that channels were open for whistle-blowers to report irregularities. The Auditor-General receives around 50 complaints each year.
Mr Lim Biow Chuan (Marine Parade GRC) wondered why officers at the SLA had not noticed Koh's and Lim's luxury cars. Koh had bought a $1.6 million Lamborghini and Lim, a $780,000 Ferrari.
Mr Shanmugam replied that Koh and Lim had been careful to conceal their purchases and did not drive their luxury cars to work.
Both ministers stressed that a balance had to be struck between efficiency and a beefed-up set of checks and balances.
'We must guard against tightening up the system so much that the vast majority of legitimate transactions are hindered on a day-to-day basis,' Mr Shanmugam said.
More checks would slow things down without making it easier to detect fraud, he added.
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Balance needed between efficiency and checks and balances: Ministers
By Rachel Lin
THE alleged fraud case at the Singapore Land Authority (SLA) was not the result of lax public sector financial rules but human failure, two ministers said yesterday.
Investigations have revealed that the root cause was a lack of vigilant supervision over the two former SLA executives charged with cheating the statutory board of $12.18 million.
The authorities have since recovered $10 million in cash and assets.
Koh Seah Wee, 40, and Christopher Lim Chai Meng, 37, are said to have conspired with several businesses to win IT contracts from SLA, and then submitted false invoices for goods and services that were not delivered.
Koh may also have cheated the Intellectual Property Office of Singapore (Ipos) of $286,000, using similar methods.
'Certain officers at SLA and Ipos did not exercise sufficient supervision over Koh and Lim and had not carried out their audit responsibilities thoroughly,' said Law and Home Affairs Minister K. Shanmugam in Parliament yesterday.
Both he and Finance Minister Tharman Shanmugaratnam were fielding questions raised by four Members of Parliament on the alleged fraud case.
Mr Shanmugam told the House that disciplinary action had been taken against two SLA officers whose oversight contributed to the alleged fraud. Investigations are still under way at Ipos.
Mr Tharman said that the Government had undertaken a review of its procurement practices after the alleged fraud was uncovered.
The review found that public sector procurement rules were fundamentally sound and in line with best practices in the private sector.
'I do not think we have a systemic problem,' he said. 'The rules and guidelines are not what explain what happened at SLA and Ipos. It was human failure.'
The Finance Ministry has reminded all government agencies of the importance of vigilant supervision to minimise the potential for fraud, he said. It has provided a checklist of questions that have to be asked on matters of procurement.
Both ministers stressed that Koh and Lim had allegedly worked within the existing rules.
Even the most stringent financial audit might not have picked up the . if, as in the case of Koh and Lim, all the documentation was in place, Mr Shanmugam said.
Nevertheless, both ministers acknowledged that SLA and Ipos had weaknesses in their internal audit processes.
The agencies have been working to rectify this. SLA has undertaken some reforms, including centralising procurement in one department and lowering the financial limit on transactions which certain levels of officers can approve.
The Government is looking into ways to improve the system, Mr Tharman added. It has encouraged the periodic rotation of officers with procurement responsibilities.
In fact, it was after one such rotation that the alleged fraud at SLA was uncovered, he said.
The Infocomm Development Authority will also help agencies better monitor IT maintenance and draw up guidelines for IT procurement.
The Auditor-General will pay more attention to IT procurement in its next audit cycle. At the time of the alleged frauds, the financial accounts of SLA and Ipos were not audited by the Auditor-General but by external auditors.
The Auditor-General's office cannot audit all 64 statutory boards in all areas of their operations each year, Mr Tharman explained. It had last audited SLA in the financial year 2007-2008.
The Government is scrutinising all transactions carried out by Koh and Lim, and those involving the vendors that Koh and Lim are said to have colluded with.
Mr Tharman assured the House that channels were open for whistle-blowers to report irregularities. The Auditor-General receives around 50 complaints each year.
Mr Lim Biow Chuan (Marine Parade GRC) wondered why officers at the SLA had not noticed Koh's and Lim's luxury cars. Koh had bought a $1.6 million Lamborghini and Lim, a $780,000 Ferrari.
Mr Shanmugam replied that Koh and Lim had been careful to conceal their purchases and did not drive their luxury cars to work.
Both ministers stressed that a balance had to be struck between efficiency and a beefed-up set of checks and balances.
'We must guard against tightening up the system so much that the vast majority of legitimate transactions are hindered on a day-to-day basis,' Mr Shanmugam said.
More checks would slow things down without making it easier to detect fraud, he added.
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