Sentosa Development Corporation (SDC) should further review its land sales rules and procedures, not only to ensure transparency and fair competition

Sentosa Development Corporation (SDC) should further review its land sales rules and procedures, not only to ensure transparency and fair competition but so they will be seen to be transparent and fair, a Parliamentary committee has recommended, following findings of lapses by the Auditor-General.

In its latest report, presented to Parliament on Thursday, the Public Accounts Committee (PAC) says SDC has taken measures to redress deficiencies but PAC takes the view that the inherent weakness of SDC’s land sales by private treaty - one of the two modes of sale - was not fully addressed.

‘Direct negotiation with a prospective buyer may not result in the best price as compared with an auction, especially in a rising market,’ says the eight-member committee chaired by Cedric Foo. It is also open to abuse as information on reserve price, for example, could be leaked, PAC adds.

The additional controls of not providing board directors with privileged information will not prevent public perception of conflict of interest, says PAC, because directors and ex-directors taking part in SDC land sales will still have access to more background information than others.

PAC recommends that SDC further review its land sale guidelines and procedures so sales ‘not only comply with the principles of fair competition, maximising total returns to the government and transparency, but are also seen as such by the public’.

The committee further suggests that the Auditor-General undertake ‘a more regular audit’ of the Economic Development Board, following the Auditor-General’s findings of lapses in governance structure and financial operations in its first audit of EDB.

Apparently, EDB’s budget of $105 million for the year under review (2005/2006) was not submitted to its board for approval, and the board had also delegated power to staff to grant loans and to borrow without reporting back - practices against the law. EDB says it has taken prompt action to address the mistakes.

Other lapses unearthed in the Auditor-General’s audits of ministries and statutory boards in financial year 2005/2006 include procurement irregularities in the Ministry of Defence, inaccurate records of state land and buildings, unfair payment practices and false accounting information in the Ministry of Information, Communications and the Arts, circumvention of internal controls in a Foreign Affairs overseas mission, and weak access controls in several government agencies.

Source: The Business Times, 26 May 2007