Agencies to tighten measures to stop abuse of public schemes
Recent abuse of government schemes raising concerns
Government agencies are tightening their processes and stepping up enforcement following a series of scams involving public incentive schemes.
SkillsFuture Singapore (SSG), which was cheated of $40 million in the biggest case of defrauding a government agency, told The Straits Times it took immediate action when the scam was detected.
One of its new measures is the enhancement of its fraud analytics with the help of private sector consultants and the Government Technology Agency.
Its fraud detection system now includes a "combination of pre- and post-disbursement data analytics to detect anomalies and abnormal claim patterns, as well as physical audits of training providers, employers and individuals".
What would set off alarm bells are say, high claim amounts by a company over a period relative to its number of employees, and the high frequency of training relative to its employment size.
SSG also disclosed that police had frozen $10 million in bank accounts, and seized $6.7 million in cash and 11kg of gold in relation to the fraud case.
"The claims were submitted as applications by companies for reimbursement for training of employees - a scheme that has been around since the 1970s.
"The fraudulent claims were made in 2017, with the majority made in October when SSG detected the fraud and immediately suspended all payments to the entities," it said, adding that it made a police report as well.
Similarly, the Inland Revenue Authority of Singapore (Iras) said it has taken a "multi-pronged approach" to curb the abuse of the Productivity and Innovation Credit (PIC) and Wage Credit schemes.
The steps being taken include checking all applications against a set of pre-determined criteria, and doing routine reviews and audits of the claims.
Both schemes were also hit with fraudulent claims.
Iras said it has prosecuted 13 cases involving 37 claims amounting to $804,756 of PIC cash payouts.
The penalties and fines totalled $2.8 million.
Out of a total of 313,000 claims submitted from 2011 to 2016, 98,000 claims were audited.
Of these, Iras is now auditing 2,300 claims and has clawed back about $20.6 million from 2,200 other cases as of June 2016.
With the Wage Credit Scheme, Iras said it uses data analytics and risk profiling to detect higher-risk cases.
One telltale sign could be that the total wages paid by an employer are not commensurate with business volume or are disproportionate to employees' responsibilities. Iras will then examine supporting documents such as payslips and bank statements and conduct interviews to verify the wage increases.
Still, the recent spate of abuse of government incentive schemes has raised concerns over how these are run and how to strike a balance between deterring abuse and not discouraging legitimate applicants.
Labour MP Patrick Tay told The Straits Times he has filed two questions for this month's Parliament sitting, where he will ask Minister for Education (Higher Education and Skills) Ong Ye Kung about the SSG claims, and Finance Minister Heng Swee Keat about the Wage Credit Scheme claims to "better understand the magnitude of the problem".
"The amounts in both instances are large sums of public funds and the culprits should be dealt with severely. And preventive measures need to be resolutely taken by the agencies," he added.
Singapore Management University law don Eugene Tan believes "the hurry to get these programmes off the ground may have contributed to a poor system of financial controls and accountability".
He added: "Annual external audits must be instituted, given the amount of funds concerned."