AGO flags S$147.96 million in undeclared MOH savings, other project lapses

The Auditor-General's Office (AGO) released its Report of the Auditor-General for the financial year 2025/26 on 15 July 2026, raising 136 audit findings across government ministries, statutory boards and government-owned companies, of which 29 were assessed significant enough to detail in the report.

Among the entities named was the Ministry of Health (MOH), where auditors examined the development of the National Cancer Centre Singapore (NCCS) building in the greatest depth of any single project in the report.

Planning began in 2013 and the building was completed in 2022, developed on MOH's behalf by its appointed agent, MOH Holdings (MOHH), together with consultants and a main contractor.

Cabinet gave in-principle approval to embark on the project, and the Development Planning Committee (DPC) approved a total cost of S$864.36 million in July 2016.

Tenders called before approval was obtained

AGO found that MOH called and awarded 12 tenders and one quotation worth S$30.83 million between May 2013 and April 2016, before obtaining the DPC's approval, without the Ministry of Finance's (MOF) concurrence.

The earliest of these was called about three years before the DPC's decision. Eleven of the procurements, worth S$26.31 million, were called even before MOH had secured Cabinet's in-principle approval to embark on the project at all.

Separately, MOH obtained approval from its Internal Approving Authority (IAA) to fund five items worth S$35.34 million from the project budget that the DPC had specifically rejected or reduced.

Approval to reinstate three of these items, worth S$31.26 million, was obtained just one month after the DPC's decision in July 2016. "According to the FCMs, the inclusion of such items was tantamount to material variations in project scope that would require resubmission to DPC for approval. MOH did not do so," the report said.

S$147.96 million in savings left undeclared

AGO's test checks of the project's major tenders found savings totalling S$147.96 million, or 17 per cent of the approved budget, arising mainly from a construction tender awarded in April 2017 which alone accounted for S$145.80 million, or 99 per cent, of the total.

Under Ministry of Finance rules at the time, such savings were to be declared within one month of the tender award, meaning by May 2017 or March 2019 for the second tender.

As at March 2026, more than seven years after the final construction tender was awarded, MOH had yet to declare the savings.

"We understand from MOH that it did not declare savings for all its development projects, and not just for the one we audited," the report noted.

Auditors also found MOH had used S$11.95 million of the undeclared savings to fund three items without MOF's approval, two of which, worth S$4.08 million, had previously been rejected by the DPC.

Lapses across six contracts worth S$403.76 million

AGO test-checked the main construction contract and five consultancy services contracts, worth S$403.76 million in total, and found lapses in the management of all six.

Of 18 contract variations worth S$22.89 million reviewed, approvals for 11 variations worth S$11.90 million, or 52 per cent of the total, were obtained only after works had already begun or been completed, with delays ranging from 1.6 to 6 years.

 Consultancy fees for five variations worth S$11.29 million were computed using a formula MOHH had never had approved, resulting in approving authorities signing off on fees that were S$1.88 million, or 20 per cent, higher than they should have been; MOHH only formalised the substitute formula in an internal practice note in October 2020, roughly two years after the affected approvals and without seeking the original committee's sign-off.

Auditors also test-checked 310 star rate items worth S$16.54 million and found lapses in assessing 265 of them, worth S$12.90 million or 78 per cent of the value tested, where consultants either skipped cost-reasonableness checks or failed to obtain independent quotations.

Separately, of nine contract variations worth S$16.92 million reviewed, 44 instances worth S$16.30 million were not properly accounted for, due to incorrect rates or quantities or works wrongly classified as variations, producing an estimated net overpayment of S$363,300 once a further S$68,000 shortfall from uncorrected contract sums was included.

MOH also paid the contractor S$7.27 million in loss and expense claims, including S$4.76 million in manpower costs, for five delay events. Of S$2.20 million in manpower-related claims test-checked, auditors found no justification for how S$1.02 million of it qualified as loss and expense, timesheets that were neither provided nor independently verified, and one late notice accepted without justification that led to a S$0.99 million payout.

Final account issued before checks were complete

The main contract's final account was issued and agreed with the contractor in December 2024, and MOH made final payment in March 2025 — before MOHH reopened the account in April 2025 to address its own internal audit findings and new variation works.

Following that reopening, MOHH and its consultants had, as at January 2026, amended costs for 170 of 324 variations, producing an estimated overpayment of S$977,200 once the total variation amount was reduced.

AGO found MOHH's internal audit had already identified contract management lapses, including inadequately valued variations and potential overpayment, and shared these with the team managing the contract in September 2024 — two months before the final account was issued.

"In our view, it was not prudent for MOHH, having known the issues raised by its IA, to proceed to issue the final account and recommend that MOH make payment," the report said.

Possible irregularities in quotations

Of 15 contract variations under the main construction contract worth S$379.40 million, AGO found possible irregularities in quotations for 76 star rate items worth S$2.62 million across 12 variations, raising doubts over their authenticity and whether value for money had been obtained.

MOHH has since lodged a police report.

MOH's response

In a statement issued on Wednesday, MOH said it takes AGO's observations "very seriously" and stressed the project team had acted in good faith, with no indication of deliberate wrongdoing.

It said the undeclared savings had gone towards items such as a pedestrian link bridge connecting NCCS to Outram Park MRT station, to improve accessibility for patients, and that the tenders called before DPC approval were for consultancy and preparatory works needed to prepare cost estimates for its submission.

On reinstating rejected items, MOH said it had misinterpreted MOF's conveyance of the DPC's approval, believing this was permissible provided broader parameters such as gross floor area and total budget were maintained.

It said it would now ensure MOF's explicit concurrence is sought before calling tenders ahead of DPC approval, and would incorporate savings reporting into revised standard operating procedures, with the outstanding savings to be declared by September 2026.

On contract management, MOH said the SOP formula approved by its committee had itself been wrong, and MOHH had since presented the correct formula in April 2026.

MOHH will reassess all affected variations and recover any overpayments by December 2026, followed by an internal audit of the variation works by March 2027, before the final account is reissued.

On the quotations, MOH said MOHH would use digital tools to verify authenticity, expand the scope of internal audits, and continue quarterly staff training on procurement and contract management.

"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," the ministry said.