- The Ministry of Social and Family Development (MSF) and the Early Childhood Development Agency (ECDA) acknowledge the observations made by the Auditor-General’s Office (AGO) in its thematic audit of parenthood support measures. All of the lapses have since been addressed. We have also initiated further actions to strengthen the controls and monitoring measures for the disbursement of our grants and subsidies.
AGO’s Observations
- AGO noted that MSF and ECDA had processes and controls in place across the various grant stages to ensure proper management of its schemes. AGO also observed a number of good practices by both agencies, including leveraging systems and data to reduce human error in grant administration, systems checks to flag out exceptions for review and digital features to reduce instances of incorrect submissions.
- However, AGO’s observations pointed to possible irregularities in Government-Paid Leave Schemes (GPLS), including fraudulent behaviour and abuse of the GPLS system. With regard to the Baby Bonus Scheme, AGO observed unusual withdrawals from Child Development Accounts (CDAs), the fabrication of records by one Approved Institution (AI) for audit purposes, and inadequate monitoring of AIs and CDA withdrawals. AGO also highlighted delays in the processing and disbursement of grant claims and completion of ECDA-commissioned audits on Anchor and Partner Operators, as well as system errors and lapses affecting eligibility assessment for preschool subsidies. There were also lapses in documentation by preschools for subsidy applications, and backdating/alteration of documentation for audit purposes.
Corrective Actions Taken by MSF and ECDA
GPLS and Baby Bonus Scheme
- Employers should not (i) make GPLS claims for individuals who are not legitimate employees or (ii) declare a higher salary than the employee’s actual salary for GPLS claims. MSF has lodged police reports in relation to 26 cases of possible abuse, as well as blocked errant employers from making further claims.
- MSF has also taken action against unauthorised CDA withdrawals (e.g. purchase of adult-sized sunglasses). CDA trustees who misuse CDA monies will be required to make refunds to the CDA. AIs who breach their obligations to check the purchase and keep proper records will be fined or suspended. MSF has also lodged a police report in relation to 6 cases of unauthorised withdrawals with suspected criminal intent.
- To prevent future cases of fraud and abuse, MSF has enhanced capabilities for detection, investigation, and enforcement. This includes system checks to flag suspicious GPLS claims and to route them for additional verification and investigation, which may result in longer processing times for non-straightforward claims (e.g. those who hold multiple jobs). For CDA, we have worked with and required NETS to tighten the onboarding, maintenance and de-registration of AIs, and have also stepped up audits to verify that transactions are for authorised uses.
Anchor Operator (AOP) and Partner Operator (POP) Schemes
- On the delays in grant disbursements to AOPs and POPs, ECDA has streamlined grant administration processes to ensure timely disbursements, such as by moving to batch processing. For the delays in ECDA-commissioned audits, ECDA will appoint a panel of auditors to spread out the audit load and ensure all scheduled audits on AOPs/POPs can be completed on time. ECDA will continue to work closely with operators to ensure timely grant disbursement and audit processes as we are mindful of the impact on their cashflow.
Preschool Subsidies
- On the lapses in the administration of preschool subsidies, ECDA has taken actions to recover over-disbursements and make good under-disbursements of subsidies. While fraud is not detected in the cases of backdating/alteration of documents highlighted by AGO, ECDA has issued warning letters to the errant preschools. ECDA is also making improvements to strengthen its subsidy administration system. First, ECDA will onboard the Household Means Eligibility System (HOMES)1 by end-2024 to improve the consistency, efficiency and accuracy of the means-testing of families applying for preschool subsidies. Second, ECDA will also change the subsidy application process to enable parents to directly apply for preschool subsidies via the LifeSG portal from end-2024. This move will remove preschools as an intermediatory and greatly reduce the likelihood of documentation lapses. Third, we will tighten audit controls and implement Artificial Intelligence solutions to detect discrepancies between centres’ annual audited reports and their declarations.
MSF and ECDA’s Commitment to Good Governance
- MSF and ECDA have systems and controls in place to ensure that Singaporeans can benefit from the various grants and subsidies and be supported in building strong families. These include the use of data analytics and onboarding of new digital systems to ensure accurate subsidy/grant disbursements and detection of potential fraudulent behaviour. These systems and controls have worked as intended for the vast majority of cases. Cases where there is potential abuse of the system are exceptions and have been promptly dealt with.
- We remain committed to ensuring good governance and processes in our grant disbursements and scheme implementation. Apart from taking active steps to resolve the lapses in AGO findings, MSF and ECDA will continue to put in efforts to strengthen our processes, such as in the monitoring and controls for disbursements of our grants and subsidies. In addition, MF and ECDA will continually raise the capabilities of our officers in support of this commitment.
1HOMES is a national means-testing system for Government agencies to administer more consistent, efficient and accurate means-testing across public schemes.