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SINGAPORE: The renovation of the Singapore National Archives (NAS) building exceeded its approved budget by S $ 1.72 million, the Auditor General’s Office (AGO) said in its report released on Monday (September 7), noting inadequate management of the project by the National Library Council (NLB).
The National Archives of Singapore had already been undergoing improvement works for 18 months and reopened in April last year.
The management of the project – which had an approved cost of S $ 20.53 million – was “inadequate on several fronts,” the AGO said in its audit for the 2019/2020 financial year.
It found a “lack of scrutiny” in managing the contract variations for the project, with lapses found for 42 of the 75 contract variations it verified under the construction contract for the renovation of the building.
Many approvals in principle for contract variations, involving sums “as high as” S $ 0.37 million, were approved even without estimates of overhead costs, the AGO said.
“This meant that NLB had approved the start of the works although it did not know the magnitude of the costs involved,” the authority said.
“Giving approval and making financial commitments without clarity on the costs involved meant that the project would run a high risk of cost overruns,” he added.
READ: Lapses in Procurement, Grant Disbursements, and IT Systems in Public Bodies: Auditor General’s Report
The project ended up exceeding its budget by S $ 1.72 million, or 8.4% of the approved project cost.
Additionally, NLB only sought approval from the approval authority to exceed the cost of the approved project five months after it became aware of the cost overrun, the AGO said.
“Seeking retrospective approval undermined the role of the approval authority and indicated a weakness in financial controls,” he said.
LAPSE IN ACQUISITIONS
The AGO also highlighted procurement failures by NLB more broadly, which it said could have affected the results of some awarded contracts.
It found failures in nine cases in the trial verifications of 29 NLB bids and quotes, which were awarded between April 1, 2017 and June 30, 2019. All nine cases had an approved acquisition value of S $ 19, 39 million.
“The lapses included an inadequate assessment of the reasonableness of individual bids and failing to evaluate bid submissions fairly,” the report said.
“As a result, there was insufficient guarantee that NLB had adhered to the principles of public procurement of value for money, fairness and transparency.”
NLB had failed to evaluate bid submissions fairly in six of the nine cases, the AGO said, with the result of two awards being questioned with lapses.
For example, NLB had not adequately verified whether bidders met published bidding or quotation requirements, with three awards awarded to bidders whose bids did not meet mandatory requirements.
The award result could have been different for one of these cases, which had an approved acquisition value of S $ 0.39 million, if NLB had evaluated the bids in accordance with published requirements, the AGO said.
In another case, NLB used different evaluation criteria than those published, disqualifying two out of every four bidders who did not meet requirements that the board did not clearly indicate as mandatory.
“If NLB had not disqualified these two bidders, the award result could have been different,” the AGO said.
In some cases, the scoring matrix used to calculate evaluation scores was only determined after the tender or listing closed, or without evidence to the contrary, the authority said.
“As the bids would have become known by then, NLB could be subject to allegations that the scoring matrix was designed to favor certain bidders,” the AGO said.
NLB also failed to adequately assess the price reasonableness of the one-off offers in seven of the nine cases.
In several cases, the NLB had concluded that a single offer was reasonable after comparing it to its own estimated acquisition value, although its estimated acquisition value could not be substantiated with supporting documents or had been taken from subsequently recommended budget quotes. for the award by the supplier. of tender.
“Comparing the offer with the EPV (estimated acquisition value) derived from the same bidder is effectively a comparison between oneself,” the AGO said.
“In most of these cases, there was no evidence that the approving authority had questioned the inappropriate assessment.”
In other cases, NLB had concluded that the single offer price was reasonable after comparing it with previous offers or quotes, but did not take into account differences in scope and specifications.
The board also did not highlight these differences in the assessment report for the approval authority to make an “informed decision.”
NLB TAKES AUDIT OBSERVATION “SERIOUSLY”
In a statement Monday, NLB said it takes the AGO’s audit observations “seriously”, citing steps it has taken to address the lapses.
Regarding the lapses in the management of contract variations for the Singapore National Archives project, NLB said that it had introduced the approval process in principle in September 2018 to allow urgent variation work to be carried out. “without undue delay”.
These are subsequently formalized through requests for modification orders, and the costs involved for each are independently reviewed by NLB-appointed consultants before any payments are made by NLB, he said.
After completion of the renovation, and prior to the AGO audit, NLB said it had conducted an “after action review” to improve its processes and ensure “timely and well-documented approval”, including for modification work. urgent.
“NLB will ensure ongoing compliance with these processes and is implementing an online system to track contract variances and cost utilization for projects in 2021.”
Regarding procurement lapses, NLB said it has “further improved the robustness” of its procurement evaluation process effective immediately, especially for one-time offers and individual qualified offers received through open tenders and quotes to “ensure a fair competition ”.
It said it will also continue to periodically review its internal processes and expedite procurement briefings and staff training.
Additionally, NLB has implemented a “robotic process automation” system to “manage repetitive and manual tasks” to minimize human error, he said.
The board has also been aggregating demand in purchases of common categories of goods and services to achieve economies of scale and reap savings, where possible, he added.
“Going forward, NLB will intensify the use of analytical tools to analyze procurement data to improve decision making and strengthen procurement governance,” he said.
