AGO report reveals significant lapses in BCA’s conflict of interest declarations and contract management

SINGAPORE: The Auditor-General’s Office (AGO) has released its audit report for the financial year 2023/24, which covers the financial statements of all 16 ministries and eight organs of state.

The comprehensive audit also included three government funds, eight statutory boards, four government-owned companies, and two other accounts.

Among the significant findings, the Building and Construction Authority (BCA) was highlighted for weak oversight in the declaration of conflict of interest (COI) and lapses in contract management.

Weak Oversight Over Declaration of Conflict of Interest

The AGO audited BCA’s management of seven grant projects, with approved grants totaling S$10.40 million, under two grant schemes during the period from 1 April 2020 to 31 March 2023.

The audit revealed lapses in the management of COI declarations for five of these projects, which had approved grants totaling S$8.46 million.

BCA administered the Green Buildings Innovation Cluster (GBIC) and the Built Environment Technology Alliance (BETA) Phase I grant schemes on behalf of the National Research Foundation.

The objective of the GBIC grant scheme is to accelerate the development of innovative energy-efficient building technologies to support national carbon reduction efforts. The BETA grant scheme aims to encourage industry-led projects on cross-cutting technologies with high commercialization potential.

Evaluation panels for these grant schemes included officers from BCA, other public sector agencies, and private sector members. Panel members were required to submit COI declarations before participating in evaluations.

However, the audit found 20 lapses in 19 out of 25 required forms across five projects. These included:

• Seven instances where panel members signed forms but did not indicate COI status.
• Five instances of incomplete disclosure of companies involved in the projects.
• Five instances with incorrect grant application invitations stated.
• Two instances where forms could not be located.
• One instance of conflicting COI declaration statements.

No follow-up action was taken by BCA even when declaration forms were incomplete or incorrect, and panel members continued participating in evaluations. BCA acknowledged that these lapses were due to oversight.

Lapses in Contract Management

The AGO also identified lapses in BCA’s management of contracts for the Government Quarantine Facility (GQF) at Jurong Apartments (JA), activated during the COVID-19 pandemic. BCA awarded four contracts for managing JA, with two contracts audited by AGO covering payments totalling S$4.87 million.

Inadequate Checks on Operator’s Compliance

The audit revealed that the operator did not submit required maintenance schedules and weekly reports. AGO’s site visit to 12 dwelling units found poor maintenance, including spalling concrete and termite infestation.

AGO only pointed out that the operator also failed to conduct quarterly safety and security inspections as required.

BCA acknowledged the gaps and has since tightened procedures to ensure compliance.

Inadequate Contract Provisions

AGO noted that BCA did not collect security deposits or include liquidated damages clauses in the contracts to safeguard its interests.

BCA said that it has since tightened contract management processes, ensuring regular inspections and verification of maintenance works before payment. It is also reviewing the need for security deposit and liquidated damages clauses in future contracts.