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SINGAPORE – The remodeling of a National Library Board (NLB) building was found to be over budget by $ 1.72 million due to lack of scrutiny from its officials, the Auditor General’s Office (AGO) said.
In its annual audit of government accounts, the AGO also noted that Jurong Town Corporation (JTC) leased and leased premises may have been sublet to 26,000 entities without approval. Random checks further revealed the illegal storage and sale of diesel at four of its industrial facilities, which could pose environmental and safety risks to the public.
The AGO detailed these findings, among others, in a report released Monday (September 7) on government accounts for the 2019/2020 financial year.
In its report, the AGO said the NLB had an approved budget of $ 20.53 million for the renovation of the Singapore National Archives (NAS) building, which reopened last year in April after a makeover. 18 months.
The NAS, an institution under the NLB, archives materials of national and historical significance.
The AGO found that the management of this reform was “inadequate on several fronts” due to a lack of scrutiny by approval officials.
In particular, the AGO noted that more than half of the contract variations received approvals in principle (API), although no approximate cost estimates were provided.
“This meant that NLB had approved the start of the works even though it did not know the magnitude of the costs involved,” AGO said. In one case, the variance was as high as $ 370,000.
This lack of adequate follow-up caused the cost of the reform to increase by more than 8%, to more than 22 million dollars.
“Giving approval and making financial commitments without clarity about the costs involved meant that the project would run a high risk of cost overrun,” AGO said.
It also found that NLB only sought approval from its approval authority for exceeding the costs of the approved project five months after it became aware of the cost overrun. Seeking retroactive approval undermined the role of the approval authority and indicated a weakness in financial controls, the AGO said.
In a statement on Monday, NLB said it introduced the IPA process in September 2018 to allow urgent modification work to be carried out without delay.
While these approvals are then reviewed by NLB-approved consultants before making any payments, the board said it would be reviewing its processes to ensure timely and well-documented approval, including all urgent renovation works.
In the case of JTC, AGO’s controls over the company’s leasing and leasing management found that it could have potentially sublet to unapproved entities, due to failures in operations management.
JTC, an industrial land and infrastructure agency, allows tenants and tenants to sublet part of their premises to related or other entities, provided approval is granted. When subletting, tenants or tenants must meet conditions such as the maximum sublet area and payment of sublet fees.
But about 26,000 business entities had listed JTC facilities as their registered addresses, even though these entities were neither JTC tenants nor tenants, nor JTC-approved subtenants, AGO said.
“This could mean an unauthorized sublease by the tenants or tenants of these business entities without the approval of JTC,” he added.
Such a sublease would expose JTC’s facilities to the occurrence of unauthorized or illegal activities and financial losses due to insufficient collection of sublease fees, AGO said.
JTC raised $ 13.61 million in sublease fees in the 2018/2019 financial year.
Between November and January, the AGO conducted site visits and found 41 suspected unauthorized subtenants at 12 of the 15 JTC locations.
In particular, in four of these locations, the AGO found illegal storage and sale of diesel to the public, posing environmental and safety risks to the public.
JTC then conducted a quick investigation on 2,792 of the 26,000 business entities and found that 2,010 of them were suspected cases of unauthorized subleasing.
Of these, 1,260 cases were related tenant-tenant entities.
JTC said Monday it has strengthened its inspection regime to detect and reduce such unauthorized subleasing.
It has also stepped up inspections and worked with authorities to crack down on tenants who illegally store or sell diesel, and reached an agreement with the Singapore Civil Defense Force to grant licenses to store diesel only if the tenants had obtained prior consent for installation. of diesel tanks at its facilities.
“JTC takes a serious view of unauthorized subletting and will take legal action to reclaim the site from recalcitrant occupants found in violation of laws and regulations of authorities and agencies,” the agency said.
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