CORRECTIVE MEASURES TAKEN TO ADDRESS FINDINGS OBSERVED IN AUDITOR-GENERAL’S REPORT FOR 2025/2026

The Ministry of Health (MOH) takes the observations in the Auditor-General’s Office (AGO)’s report relating to the development of a medical institution very seriously, and has undertaken measures to address the lapses. We will continue to strengthen processes and prevent recurrence.

Background

2.            The medical institution mentioned in the AGO report is the National Cancer Centre Singapore (NCCS) building, for which planning works started in 2013. The building was completed in 2022. It was part of MOH’s efforts to rapidly expand national healthcare capacity and capability, in response to an urgent cancer treatment capacity crunch at that time. MOH Holdings Pte Ltd (MOHH) was appointed as the development agent to oversee and manage healthcare infrastructure development projects, including the development of NCCS, on MOH’s behalf.

3.         We wish to share how we intend to follow up on AGO’s observations and provide some assurance. Importantly, we would like to emphasise that the project team carried out their work in good faith and there was no indication of deliberate wrongdoing.

Corrective measures taken by MOH and MOHH

Lapses in approval and financial governance of development project

3.            On the observation that MOH funded items that were specifically rejected or reduced by the Development Planning Committee (DPC), MOH had misinterpreted the Ministry of Finance’s (MOF) conveyance note on the DPC’s approval and judged that reinstatement of such items rejected or reduced by the DPC would be allowed, so long as broader parameters such as Gross Floor Area and total budget were adhered to.

4.            On the observation that MOH proceeded to call and award tenders before obtaining approval from the DPC without MOF’s concurrence, the tenders and quotations for consultancy and preparatory works were called so that we would have detailed cost estimates for the submission to seek the DPC’s approval for the project.

5          As for using undeclared savings to fund items for the project, the savings resulted from lower tender prices for the various construction contracts, and were used to fund works such as a pedestrian link bridge connecting NCCS to Outram Park MRT station to improve accessibility and connectivity for patients.

6.            Henceforth, MOH will ensure MOF’s explicit concurrence is obtained if MOH needs to call tenders and quotations prior to the DPC’s approval. Assessments will be conducted to determine if project scope changes are material and thereby require resubmission to the DPC for approval. The reporting of project savings will be incorporated into our revised standard operating procedures (SOPs).

Lack of due diligence before issuance of final account and lapses in contract management

7.            MOHH presented an incorrect formula for computing additional consultancy fees to a committee, but later formalised the correct formula in an internal practice note in October 2020. Consultancy fees for additional services were computed based on the correct formula, and there was no overpayment of those fees involved. MOHH subsequently rectified the error and presented the correct formula to the committee in April 2026, after the audit findings.  

8.            MOHH will work with its consultants to reassess all affected variation costs and make the necessary cost adjustments, including recovery of overpayments of these variation costs, if any, by December 2026. An internal audit on the variation works will also be conducted by March 2027. Once these are completed, the final account (FA) will be reissued. MOHH has also implemented a pre-FA checklist for all ongoing and future projects to strengthen contract management controls, as part of broader efforts to improve oversight of its appointed consultants.

9.            MOH will work with MOHH to progressively implement measures to strengthen MOHH’s contract management processes across several areas by September 2026. These include a formal tracking process to ensure that appropriate authorities approve changes to SOPs before they are implemented. MOHH will also strengthen independent audits over variation valuations to ensure that they are carried out in accordance with SOPs, and completed within the stipulated timeframe.

Possible irregularities in quotations for star rate items

10.         On the observation that the costs of star rate items were not properly assessed by consultants with no reference to independent quotations, there is a risk of irregularities, and MOHH has lodged a police report.

11.         MOH and MOHH take a serious view against falsification of documents and expects our appointed contractors to uphold the same standards of integrity. Moving forward, MOHH will use digital tools to verify the authenticity of sampled quotations, expand the scope and effectiveness of internal audits, and continue regular staff training on procurement and contract management. Expectations on the management of star rate items will be clearly conveyed and reiterated to consultants across ongoing and future projects.

12.       MOH and MOHH will continually strengthen our systems and controls to ensure rigour, consistency, and accountability across all ongoing and future projects, to prevent recurrences of the lapses highlighted in the AGO report.