The Public Accounts Committee (PAC) reported to Parliament that there were irregularities in the Singapore Civil Defence Force's (SCDF) dealings with its co-operative.

The Co-operative of the SCDF Employees Limited (COSEM) was set up in June 2005 to provide opportunities for a second career to retired SCDF officers and to export SCDF’s expertise and services overseas.

Auditor-General's Office (AGO) had observed that a number of SCDF’s dealings with Co-operative of the SCDF Employees Limited (COSEM) were not in compliance with the relevant Government instructions.

These include the SCDF paying $30,811 for renovating space rented to COSEM. The works included refurbishment of a general office and conversion of a dormitory into office space.

The renovation cost was not recovered from COSEM nor was the rental rate revised to take into account the renovation cost.

SCDF also paid $36,163 for overseas travel expenses incurred by SCDF officers seconded to COSEM traveling on COSEM’s business trips.

The committee noted that SCDF has since recovered the above expenditure from COSEM.

The Ministry of Home Affairs, which is SCDF’s supervising ministry, has since assigned its internal auditors to conduct regular audits on SCDF’s dealings with COSEM to ensure that they are at arm’s length.

As there could be other ministries or statutory boards with similar close relationships with related organisations, giving rise to conflict of interests situations, the Committee recommends that the AGO, in the course of its audits, look out for such related party transactions.