MANAGEMENT AND CONTROL OF GOVERNMENT EXPENDITURE

Last year, I informed the House that my Ministry had embarked on a programme to set up Management Accounting Systems in all Ministries. These Management Accounting Systems, or MAS for short, will allow Ministries to track and analyse the cost of their services, products or activities and to gauge their cost-effectiveness. Under the Block Vote Allocation System introduced in FY89, Ministries are accountable for the way they deploy their manpower and funds, and for the results they produce. In this regard, the MAS will serve as an important tool for the Ministries to identify poor performance, inefficiencies and waste and to take remedial actions.

Phase One of the MAS Project is under way and will be substantially implemented before the end of FY91. This phase of the project covers the Ministries of Finance, Education, Health, National Development and Environment. Phase Two, which will begin in FY91, will cover the Ministries of Home Affairs, Communications, Law, Information and the Arts and Foreign Affairs. The MAS project for the Ministries of Trade and Industry, Labour and Community Development is originally scheduled to be undertaken in Phase Three. It may be subsumed under Phase Two if manpower resources permit.

To identify costs accurately under the MAS, additional financial systems will have to be introduced to supplement the Government's cash basis of accounting. A Fixed Assets System, acronymed FAST, has been installed to record the stock of Government's capital assets and to compute depreciation expenses. FAST will also allow Government to compute how much money to set aside to provide for the replacement of capital assets. Most Ministries have been trained on the use of FAST. They are now entering their asset records into the system.

Following the corporatisation of the Management Services Department in July last year, the responsibility for undertaking the planned zero-base reviews of Ministries and Organs of State has been assumed by the Auditor-General's Office. These reviews are an integral part of our efforts to keep Government programmes and practices up-to-date, relevant and cost-effective, and to weed out inefficiencies and waste. In FY90, zero-base reviews of the Ministries of Community Development and Communications and Information were completed and a similar review of the Ministry of Home Affairs initiated. Zero-base reviews for another four Ministries and two Organs of State will be carried out over the next one and a half years.