Internal control on purchases

THIS LETTER IS NOT PUBLISHED BY THE STRAITS TIMES

Editor
Forum Page

Straits Times

I was surprised to read that a senior government official had been charged for submitting false claims for purchase of gifts to be given to foreign dignitaries over several years. 

I do not wish to comment on this specific case, as it is being handled in the court. However, I like to ask about the internal control system that is used in government agencies.

The basic principle of internal control is that each transaction should involve at least two people, to act as a check against abuse. The purchase has to be initiated by one staff and approved by the supervisor. It is possible for these two people to collude, but the risk is minimized.

I have dealt with government agencies over the years, and they are very meticulous about following SOP, even to the extent of giving some hassle to suppliers.

It is therefore very surprising that a basic principle of internal control is being overlooked to such an extent. I look forward to a reply from the Auditor General's Office.

Do we have adequate resources for investigative work?

THIS LETTER IS NOT PUBLISHED BY STRAITS TIMES

12 October 2013

Editor
Forum Page

Straits Times

I wish to thank Superintendent Ho Yenn Dar of the Singapore Police Force for giving me a reply and assurance that the Police will commence investigation when there is evidence that a criminal offence has been committed.

I like to ask if the Police has sufficient investigators to handle the alleged criminal cases that were lodged and if these investigators had the skill, experience and inclination to carry out investigative work?

In November 2011, I was involved in filing a complaint with another person on an alleged cheating case involving a company that provided forex training courses at a high fee. The complaint was accompanied by several hundred pages of documents of alleged deception of the trainees over a period of several years. 

After a delay of a few months, the investigator replied that they did not find any evidence ofcheating.to merit investigation. During this period, both of the complainants were not invited to meet the investigator to clarify the evidence that were presented. We had contacted the investigator a few times, and were told that the requested meeting was not required.

I am now helping a group of complainants on another case. The complainants alleged that they had been cheated in an investment scam and had filed a complaint with the Commercial Affairs Department. The filed complaints from ten people contained several instances of alleged cheating as described in section 415 of the Penal Code of Singapore.

I have asked the investigator to interview the complainants and also offered my assistance in reviewing the evidence, as I am familiar with this matter. I await to see the action that will be taken by the investigator and look forward to a more positive and inclusive outcome to this complaint.

Unsatisfactory compensation from Sing Tel

THIS LETTER IS NOT PUBLISHED BY THE STRAITS TIMES

15 October 2013

Editor, Forum Page

Straits Times

I find the compensation offered by Sing Tel to its customers affected by the disruption of service caused by the fire at its Bukit Panjang exchange facility to be deplorable.

At the minimum, the affected customers should be given a proportionate refund of the fee for the period that the service has been disrupted or for the contract period to be extended by the same period.

It could be argued that the compensation should be augmented, as the disruption to business or the daily living routine should also be considered. 

It is likely that many customers will not be adequately compensated by the increase in surfing speed or more local calls which they may not need. 

The regulatory authority is supposed to regulate the service providers to make sure that they meet the service standards. I ask the authority to step in and ensure that the customers are compensate adequately and fairly.

Be careful about low cash values

A bank marketed a life insurance policy where the consumer has to pay $10,000 annual premium for 5 years, making a total payment of $50,000.
At the end of 10 years, the policy pays between $55,000 to $61,000 (not guaranteed) giving a yield of about 2% p.a.
The surrender value before maturity is less than $35,000 (as against $50,000 in premium paid) and this is not highlighted to the unwary consumer - although it is shown in the benefit illustration.
A consumer said that the product was sold to her as a saving plan, and she was not told that this is a life insurance policy. There is suspected mis-selling.

When I showed this policy to an independent financial adviser, his comments are:
1. This is a rip off product
2. How can MAS allow the insurer to sell such a product? How does it pass the compliance test of being fair to consumers?

Talk on Puzzles

This is a 90 min workshop. Mr. Tan Kin Lian will explain the use of the following mementos:

a) Shape Quiz
b) Tangram Quiz
c) Amazing Numbers

The fee for the talk is $10 but each participant will get 10 sets of the mememto worth $20. They can buy additional paks at $1 each (usual price is $2). This special price is available only on the day of the talk.

Teachers can use these puzzles to teach creating thinking and problem solving to their pupils.

Register here:
http://c-onyx.com/page/1046

Asking workshop to do a third party claim

Be careful about signing a letter of authorization to ask a workshop to handle a 3rd party claim. Read http://c-onyx.com/page/1146

Parents, help your children to make the right start in financial planning

I wish to give this important message to parents. The little things that you do, can mean a lot to the future of your children.

They are now studying hard, to get good results for their university examinations, to look for a job. After they land a job, they will work hard (day and night) to do it well, aiming to get a promotion and an increase in salary.

A part part of their hard work is likely to be wasted. Why? Whatever they earn, whatever they save, is likely to be taken away from them, due to a bad financial decision. This happened to 30,000 people every year. 

They are going to buy a bad life insurance policy, most likely an investment linked policy, that will take away 40% of their savings. 

And you, the parent, should take a large part of the blame. Why? You did not give them good advice. 

Here is what you can do. Buy the two books written by Tan Kin Lian and give it to them as a gift. The titles are "Practical Guide on Financial Planning" and "Get Value for your Life Insurance". Each book cost only $12. 

They can save $100,000 for your child, if they read them and avoid buying the bad life insurance policies. 

Order here: http://c-opal.com/promo/3

Make it easy to use Wireless@SG

Printed in the Straits Times Forum, 7 Oct 2013

THE Infocomm Development Authority of Singapore (IDA) has said that there is no more government funding for the Wireless@SG hot spot network ("Wireless hot spot deployment: IDA replies"; last Friday).

I am surprised that this service, which is useful to students and low-income people, is not funded by the Government. The cost of this service should be quite modest compared to the many expensive projects that are undertaken by IDA.

During the earlier phase of the project, the sign-in process was handled by several operators using their own interfaces. This caused a big problem for people who had to log in to the hot spots provided by other operators.

In the next phase, it is better for IDA to find an operator to manage a common sign-in service that can be used seamlessly across different types of devices.

The proposed sign-in process using SIM-based authentication, which is expected to be launched next April, is useful for devices with SIM cards, but may not work with other mobile devices.

It is better to find a simple and effective system that can work across all devices, especially one that can be implemented quickly and with less expense and technical risk.

Tan Kin Lian

 

Improve efficiency and reduce cost of living in Singapore

There are many aspects of Singapore that lead to inefficiency and high cost. I share some of them below:

a) Private tuition. The flaw in our education system make it necessary for parents to engage private tutors for their children. The manpower used in private tutors, and the need to travel to receive or get private tuition on a one-on-one basis, must lead to more resources being put in the education system.

b) Government online services. By saving an hour of the time of the civil servants, the badly designed processes caused the public to send several hours to online processes, including the login and searching for the online form. The total cost to the economy is several times of the attempted savings.

The inefficiency has resulted in high cost of doing business and the high cost of living.

If the problems are not recognized, the situation will continue to get worse. It has already reached a very bad state.

I want Singapore to be better, and will continue to point out the problems that should be recognized and rectified to improve the situation.

Presenting both sides of the story

Lim Wee asked:
Do you subscribe Strait Times? Don't you think it is a one -sided newspaper?

REPLY
Many people say that the Straits Times is parroting the views of the Government. 
Let me give you an independent view. 
35 years ago, a retired Englishman was a guest in home home. After two weeks, he said, that the Times is rubbish. I asked him why he thought so. 
His reply, "They only give one sided view, and always repeating what the Minister had said. In England, the papers will present the views from both sides, and let people make their judgement. How can people decide, if they only read the views from one side?"

Handling their job well

William Sam asked:
Which current minister is the worst performing one in your view? Which opposition MP has the ability to do a better job than that minister?

REPLY:
The best performing minister is Khaw Boon Wan. He is tacking the housing problem effectively by increasing the supply of HDB flats and also making it affordable through higher grants from the Government.

The worst performing minister is the one in charge of Home Affairs. He is not addressing the problem of rising crime rates and scams. This is the primary duty of the Police.

Many MPs, PAP or opposition, can do the job of a minister. It does not require a super talent. It only needs someone who is in touch with the problem and use common sense to solve it. Look at the example of the Governor of Jakarta, which is reported here:
http://c-onyx.com/page/991

Update law on copyright

SPH sued Yahoo for publishing over 200 articles that it deemed to have infringe its copyright. I find it odd that a newspaper article, which is widely published and read should be the subject of copyright.
The unclarity of copyright will impede the free flow of information, which is necessary for a thinking society. Our Parliament has a duty to discuss and address this issue and update the laws.

Private tuition for students

A few letters were published in the Straits Times on the need for tuition. Some parents said that they were compelled to give tuition because of the high demands of the education system. Another writer said that it is the decision of the parent and not the system.

There are two issues underlying this debate:

1. Is the standard of the syllabus set too high for each grade, that many students find it difficult to cope?
2. Do parents arrange tuition for their children to pass the subject or to achieve the top grade?

The standard is probably set too high. I remember that a topic that I learned in secondary one 50 years ago was covered in primary 4 about 20 years ago. I wonder if it is now covered in primary 3?

The high demand do not seem to produce better quality students. I find an unwillingness to think or to solve puzzles, even among people who did well in the examinations.

Many parents probably arrange tuition for their children to achieve top grade. This is not necessary.

To change the mindset. we have to make a drastic change to the system. I would consider the following:

1. In the report cards, show only if the student had passed or failed in each subject (and not not aim to show a more detailed grade).
2. The student will be informed of the detailed grade, but it will not appear in the official record.

This will allow the student to identify which are their strong and weak subjects, and make the effort to achieve a pass, without putting in undue stress to achieve the top grade.

Tweaks to the COE system

Is engine power a better way to classify cars? The Minister for Transport, Lui Tuck Yew thinks so. 

I disagree. I do not like the convoluted systems that exist in Singapore today. 

We already have taxes on vehicles that depend on their values. If you want to make expensive cars pay more tax, just raise the direct tax that are based on value.

The COE is a licence to use the road, based on space taken on the road. There is no need to have separate categories for cars, i.e. category A, B or open category and start an argument about how to classifies different models into these categories.

We waste so much time in Singapore over trivial and avoidable matters. That is why we are not able to solve the big problems, which continue to get worse.

Singapore can improve its transport system to solve the problem of high COE prices.
http://c-onyx.com/page/506

Singapore relooks elitist policy

Recent measures show that

the government is not aiming to eliminate,

only to remake,

elitism, which exists everywhere.

 

http://www.thestar.com.my/Opinion/Columnists/Insight-Down-South/Profile/Articles/2013/09/21/Spore-relooks-elitist-policy

 

A positive approach towards internal audit

A slightly edited version is published on 16 September in the Online Forum of Straits Times

12 September 2013

I wish to make some suggestions in response to the letter from Ms Deon Chan Siew Fong (Timely to rethink value of internal audit, ST 11 September).

Ms. Chan said that internal auditors should be a part of the management team and not be perceived as "nitpickers" who sound false alarms over insignificant human oversights. 

I agree with her approach. The problem lies with the current approach, which require the business to lay down its standard operating procedures (SOP) and the internal auditor to audit the activities according to the SOP.

Most SOP are written in a detailed manner and do not provide for flexibility, common sense and judgement in taking decisions. There is too much emphasis on compliance with the SOP and a lack of understanding of the purpose of the business or of the SOP.

The purpose of a business is to make transactions that produce a profit. The purpose of internal audit is to ensure that the employees who are trusted to carry out the transactions act honestly, diligently and responsibly.

The purpose of the SOP is to guide the employees and the internal auditor on what are needed to achieve the goal. The SOP should not be followed blindly, without regarding to the underlying goal. If this is recognized, there is no need to sound alarm over insignificant non-compliance. 

We need to change the mindset and empower internal auditors to approach their work with the aim to find out how the employees are doing right, and not what are wrong. In the process, they will detect what does not seem to be right and can discuss the issues with the relevant people. 

What is not right does not mean that it is wrong. 

By adopting a positive approach, internal audit will be able to carry out its role in a more productive manner. There will be a small percentage of cases of dishonest activities, which are more likely to be identified with a positive approach.

Tan Kin Lian

Future of National Service in Singapore

Read this article by Seah Cheang Nee
http://www.thestar.com.my/Opinion/Columnists/Insight-Down-South/Profile/Articles/2013/09/14/Concern-over-NS-numbers

The writer had written truths about our National Service policy that the policy makers refuse to recognize. It is clear to most people that our NS policy is now not sustainable for the following reasons:

a) It is imposing an unfair burden on male Singaporeans
b) It is contributing to the low birth rate experienced in Singapore
c) There are better ways to handle our national defense priority, such as relying more on a professional army
d) It is possible to reduce the military training to 9 months (as is experienced in other countries) for the rank and file (representing more than 90% of recruits)
e) The 10% or less who are selected as officers can be given additional training and be paid better
f) The annual reservist training and remedial training should be reduced changed to alleviate the continuing burden
g) The wastage of manpower and expenditure on our national defense should be addressed.

I hope that more Singaporeans will come forward to speak out against the current policy and practice.

Dependent Protection Insurance Scheme (DPIS)

There was a letter in the Straits Times that the insurance company rejected a permanent disability claim from an insured person who was paralyzed from the waist down. The insurer claimed that his person could do sedentary work and does not qualify for a claim.

I checked the definition of the cover from the CPF website and found the following:

This Dependent Protection Insurance scheme provides CPF members and their families with some money to tide them over the initial years should the insured members become physically/mentally incapacitated or die.

The website further states: The member becomes physically/mentally incapacitated and can no longer work as certified by a doctor. The scheme does not provide any further guidance to the doctor how to certify that the member "can no longer work".

The DPIS scheme has been in existence for more than 30 years. It is unsatisfactory that there is no clearer definition about what incapacity meant. There must be many actual cases in the past that could be used to provide guidance on how to deal with some specific cases.

Understanding health insurance

Dear Mr Tan

We will like to share with you our latest article that talks about the fine prints commonly included in health insurance. 

Given the recent ST forum letter from a NTUC Income policyholder, we thought this article might prove useful for readers of your blog (especially those interested in personal finance matters).

Article as attached & link for your reference - http://dollarsandsense.sg/the-fine-prints-of-health-insurance/. Being from the industry and organization previously, we believe you might have some thoughts to this matter. We will be glad to hear any insight that you may have in additional to what we have pen down in our article. 

Best Regards,

Timothy

Handling parents' expectations in our schools

I want to share my views on how to manage issues involving parents in our schools. These issues are similar to customer complaints in businesses.

When a parent contacts the teacher or the school, the type of interaction should be identified as follows:

a) seek clarification, i.e. to get facts
b) lodge a complaint

The type of issue would probably falls into the following:
a) alleged mistreatment by the teacher
b) alleged mistreatment by classmates
c) alleged poor performance by teacher, e.g. not teaching the child properly.
d) school facilities or environment

If the parent is in "seeking clarification" mode, the teacher or school staff can cooperate in giving the relevant information. The parent should avoid the type of questions that amount to interrogation or allegation misconduct during this phase.

If the parent wishes to file a complaint, after getting the relevant facts, the process should be done in a formal manner, i.e. a written and signed statement should be obtained, and relevant facts should be provided.

The handling of the complaint by the school can go through two stages:
a) the first stage is to seek an amicable solution without going through too much trouble for all parties. Often, an apology or acknowledgement may suffice. The case can be closed easily.
b) If the matter is more serious, a more formal process may be carried out, e.g. a disciplinary inquiry. This should be quite rare.

We have to accept that in our daily lives, mistakes can be made and they are not serious. Often, these mistakes are unintended and unexpected, and should be excused. We should not expect perfection.

Most of our schools, with the long experience, probably handle the issues from parents well. Perhaps, it is a matter of making better communication with parents and the public.

I hope that these ideas are helpful to the schools, parents and the public.