An inter-agency task force has been formed to review how SkillsFuture Singapore (SSG) was cheated of nearly $40 million - Singapore's biggest case of a government agency being defrauded.

Steps are also being taken to strengthen the agency's fraud detection system, including by installing "a good and effective data analytics system" in the third quarter of this year, Minister for Education (Higher Education and Skills) Ong Ye Kung said yesterday.

The SSG, which oversees the lifelong learning initiative, said last month it had been swindled of nearly $40 million by people who had submitted false claims for training grants drawn from the Skills Development Fund.

The fraudulent claims were made last year, mostly in October, and police believe that a criminal syndicate was behind them, Mr Ong said in Parliament. They were detected at the end of the month.

The fraud should have been detected "much earlier", he acknowledged. "This should not have been allowed to happen. While we cannot always prevent all forms of fraudulent activities, SSG should have detected this case much earlier, especially when it was so egregious, and the amounts involved were so large."

The minister was responding to questions by MPs Patrick Tay (West Coast GRC), Desmond Choo (Tampines GRC) and Zaqy Mohamad (Chua Chu Kang GRC), who wanted to know what steps had been taken to prevent future abuse. Mr Zaqy also asked whether any staff members had been suspended pending investigations.

Mr Ong said that as of now, none has been disciplined or suspended "as there has been no evidence of wrongdoing by any staff member thus far".

But what is clear is the "weakness" in the agency's fraud detection capability, which has to be addressed, he said.

The task force, involving SSG, the Ministry of Education, the police's Commercial Affairs Department and the Accountant-General's Department, is conducting a thorough review of how the fraudulent cases happened, and will evaluate the current fraud detection system and make recommendations to improve the system.

"Specifically, I directed SSG to strengthen its fraud detection system through data analytics," said Mr Ong. "Fraudsters, who are going all out to cheat, are getting more sophisticated, and their plans more elaborate." By using data analytics and drawing on data across government agencies, "we can better detect false claims, without significantly affecting genuine employers applying for training grants".

To get this done, SSG is getting help from private sector consultants and GovTech, which oversees technology transformation in the public sector.

Besides having restructured the fraud detection and audit team, SSG has also started implementing some measures manually. These measures will be progressively automated and systemised, he added.

The scam involved an organised network using business entities, with employers' firms and training providers submitting fraudulent claims, said Mr Ong. Police also believe the Central Provident Fund documents provided by the syndicate listed fictitious employees.

Yesterday, MPs also asked about a separate case of fraudulent SkillsFuture claims in which more than 4,400 individuals were found to have made false SkillsFuture Credit claims within a short period last year, amounting to over $2 million. The individuals, who acted largely of their own accord, did not attend any training but falsely claimed to have done so, said Mr Ong.

SSG has since reviewed the claims processes for SkillsFuture Credit, with individuals no longer reimbursed directly by SSG. Instead, payments will be made to training providers, who then reduce the course fees chargeable, he said.

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