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Joint Statement on Findings in Auditor-General’s Office’s Thematic Audit on Selected COVID-19 Procurement and Expenditure Contracts for FY2021 / FY2022


The Ministry of Manpower (MOM), Health Promotion Board (HPB) and Singapore Land Authority (SLA) acknowledge the observations made by the Auditor-General’s Office (AGO) in its audit on selected COVID-19 related procurement and expenditure contracts.


2 The COVID-19 pandemic was unprecedented in the scale and speed of its spread. The agencies had to act decisively to protect Singaporeans, and had to quickly pivot from business-as-usual operations to crisis mode, including taking on new and additional responsibilities, amid a highly uncertain operating environment. For example:


  • MOM contained the outbreak in the migrant worker dormitories and took care of the well-being of over 200,000 migrant workers living there. Within days, MOM stepped up to support dormitory operations, which were previously managed by the private sector. We procured more than 70 million meals over four months, and rapidly set up medical outposts to provide migrant workers with convenient access to medical consultations and swab testing services. The number of new contracts for goods and services MOM had to procure within five months surged nearly ten-fold to 607, while the total value of these new contracts surged thirteen-fold to $700 million, reflecting the unprecedented scale of what we were dealing with.
  • HPB took on the responsibility to oversee the delivery of COVID-19 tests nationally. Testing was then the foundation of Singapore’s pandemic response. 5,100 swab personnel had to be hired and trained within three months. This workforce represents more than six times HPB’s total pre-COVID staff strength. At its peak, the extensive testing operations spanned over 60 sites, including migrant worker dormitories, community testing centres and regional swab centres.
  • On top of its usual functions, SLA quickly adapted to its additional role to procure, prepare, administer and manage premises to be used mainly as quarantine, isolation, recovery or temporary dormitory facilities for individuals affected by COVID-19. SLA procured and managed two main types of accommodation facilities, namely hotels (including hostels and serviced apartments) and State properties that were retrofitted and used as temporary dormitories. As the number of COVID-19 cases rose rapidly, the stock of accommodation facilities needed increased in tandem, and SLA reacted quickly within tight timelines, to deliver the required accommodation facilities on time to support Whole-of-Government (WOG) COVID-19 operations. SLA was able to ramp up supply to more than 12,000 bed spaces in 18 State properties within 4 months. SLA also assisted in contracting more than 150 hotels in Singapore for use as Government Quarantine Facilities, Stay-Home-Notice Dedicated Facilities for returning and overseas Singaporean residents, Swab Isolation Facilities, and Migrant Workers Decant Hotels.


3 The AGO report noted that the three agencies generally had in place processes and controls, as well as the good practices that had been implemented by agencies to facilitate timely responses to the pandemic situation and reduce costs for the Government. For example:


  • As the situation stabilised and requirements evolved, MOM conducted reviews of contracts to reduce the scope of services. This resulted in savings of $4.63 million for dormitory inspections and $2.19 million for the deployment of safe distancing ambassadors at recreation centres for migrant workers.
  • To better manage operations and costs, HPB established the Testing Operations Tasking Group to start up operations and engage swab personnel to provide nationwide swabbing and testing. The use of an IT system was also adopted to manage the deployment and work schedules of the large number of swab personnel, and facilitate communication among the swab workforce. A training standards and compliance framework was also established to ensure that safety and standards were maintained.
  • The AGO noted that SLA had implemented good practices to better manage the uncertainty in demand, reduce costs and maintain the integrity of the procurement process. Despite working under compressed timelines, SLA had put in place structured processes for checks on conflict-of-interest and contractor debarment. SLA also took the initiative to review rates, which resulted in savings of $86 million through:
    • Contract rates between 6% to 50% lower than initial contract rates;
    • Monthly management fees for stepped down sites that were reduced by between 28% to 74%; and
    • The implementation of a flexible retainer basis model to contract with hotels to manage fluctuations in demand.


Improving Processes for Procurement and Contract Management  


4 The AGO had also highlighted instances of inadequate controls and checks, and recommended areas where controls and processes could be strengthened. We have since taken immediate steps to rectify the lapses and prevent recurrence. 


5 AGO has found that there were areas where controls could be improved in procurement and contracting processes, such as in the evaluation of proposals and documentation of assessments carried out. To strengthen our ability to manage a surge in the volume of procurement during emergencies, agencies will review our Emergency Procurement (EP) procedures. These will have strengthened controls and processes to cater for urgent operations, while adhering to the Government’s procurement principles.


6 AGO found that there was a lack of documentation pertaining to external partners who had volunteered to assist HPB to hire swab personnel at no charge. HPB agrees with AGO’s observation on the need to improve documentation and has now formalised the need for written agreements with all external partners as good practice, even in times of extreme urgency and for services provided at no charge. HPB will strengthen its processes and oversight in this regard.


7 To strengthen our ability to manage a surge in the volume of procurement during emergencies, MOM and SLA have also identified officers to be trained in improved EP procedures from end-to-end. These officers will augment the agencies’ core procurement teams in the event of future crises of similar scale.


8 AGO noted instances where payment controls should be improved such as in payment processes which involve checks on payment validity, supporting documents for payments and payment claims.


9 Agencies have also taken measures to rectify instances of payment lapses made to contractors:  


  • MOM has fully recovered approximately $150,000 of overpayments and made good on about $51,000 of underpayments.
  • AGO found that HPB had overpaid 51 staff $580,000, due to delays in the keying in of termination dates into the Human Resource/Finance system. HPB has been clawing back the outstanding overpayments. The recovery process is ongoing, with more than 62% of the monies recovered as of 31 March 2022. In addition, from September 2021, HPB was able to outsource manpower operations to commercial manpower agencies.  HPB was not able to do this earlier and had to hire swabbers directly, because manpower agencies could not obtain the necessary insurance to render HPB the service.
  • SLA has reviewed the list of potential overpayments observed by the AGO and after conducting a payment verification exercise, has confirmed that there were no overpayments for most of the highlighted contract sums. SLA has taken the appropriate actions to recover about $25,000 of overpayments, and the total potential overpayment for remaining contracts that are still being reviewed is approximately $10,000.


10 To strengthen the process of managing payments, our agencies have stepped up checks and controls.


Our Commitment to Good Governance  


11 AGO had found possible irregularities in the records that were furnished for the extension of a MOM contract, and the authenticity of some of the documents submitted to SLA by a contractor. MOM and SLA take a very serious view of these irregularities, and have lodged separate reports with the relevant authorities for further investigation.   


12 MOM, HPB and SLA remain committed to the public service’s principles of good financial governance, fiscal accountability, and prudent management of public monies. We thank the AGO for its observations. We have taken immediate action to rectify the observations by the AGO and are working with the Ministry of Finance to strengthen the resilience of our structures, processes and systems in order to serve Singapore effectively, especially during future crises.