MANAGEMENT AND CONTROL OF GOVERNMENT EXPENDITURE

I will now give the House a brief update of measures taken by Government to manage and control expenditure.

Singapore Government Management Accounting System

Computerised management accounting systems, acronymed SIGMA, have been successfully introduced in all ministries. SIGMA equips the Government with accurate cost information to help ensure that operations are cost-effective. It also assists managers in evaluating competing options, such as whether certain activities should be performed in-house or contracted out to the private sector. SIGMA will continue to be enhanced and extended to all departments.

Budgeting for Results

SIGMA provides a basis for rational decision making by managers. In addition, it is an important step forward in our on-going efforts to link budgets to performance and outputs. We call this Budgeting For Results. Under this arrangement, the budget provided to a department is directly linked to the quantity and quality of goods and services to be provided by that department. For example, the budgets of several educational institutions are already based on a pre-determined sum per student-year. We hope to extend the system gradually to other departments where feasible.

Linking the budget of a department to the results expected will make the accountability of the public sector manager clearer. It should also help encourage greater initiative, entrepreneurial thinking and financial discipline within the civil service.

Zero-base Reviews

At the request of the Ministry of Finance, the Auditor-General has been conducting zero-base reviews of individual Ministries. These are to ensure that Ministries' major policies and practices remain relevant and effective, and that overall, their resources are efficiently utilized.

Over the past year, reviews of the Ministries of Law, Labour, Environment, Finance (Public Service Division) and the Public Service Commission were completed. Over the next one and a half years, the Auditor-General's Office will review the Ministries of Finance (Budget and Revenue Divisions), Information and the Arts, National Development, Health and Communications. The Auditor-General has agreed to make known his findings and recommendations to Parliament through the Public Accounts Committee.