PUBLIC DONATIONS HELD BY MINISTRY OF HEALTH

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PUBLIC DONATIONS HELD BY MINISTRY OF HEALTH: 16.

Dr Wang Kai Yuen asked the Acting Minister for Health why are public donations to his Ministry for health science research and development being transferred to the Treasury.

The Acting Minister for Health (Mr Khaw Boon Wan): Mr Deputy Speaker, Sir, let me first clarify that the donations were not from the general public, but came from one donor, the Singapore Totalisator Board (Tote Board).

In 1994, the Ministry of Health (MOH) set up the National Medical Research Council (NMRC) to coordinate and fund medical research in public hospitals. NMRC is funded by the Government out of MOH's annual budget.

In 1996, the Ministry of Health asked the Tote Board to help fund the NMRC so that we have additional money for research. The Tote Board readily agreed and decided that it would contribute up to 25% of the annual NMRC expenditure on medical research, subject to a cap of $5 million per year.

The working arrangement is for the Ministry of Health to justify its research

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needs to the Finance Ministry, when it seeks its annual budget from the Government. NMRC will then fund its activities from the MOH's budget allocation.

Separately, the Tote Board will reimburse the Ministry of Health with 25% of the actual research expenditure incurred by NMRC in the previous year, subject to the $5 million cap. Upon receipt of the reimbursement, the Ministry of Health should have taken it in as revenue, thus offsetting part of NMRC's expenditure, in line with the donor's intention.

However, the Ministry of Health did not do so. It only took in part of the donation as revenue, but retained the rest in a deposit account. As a result, the Tote Board reimbursements have accumulated in the Ministry of Health's deposit account to $29 million when the Auditor-General discovered the discrepancy last year.

The Ministry of Health has made a mistake by not taking in the entire reimbursement as revenue. After the error was pointed out by the Auditor-General, the Ministry of Health has correctly taken in the $5 million reimbursement received in 2003, while trying to properly resolve the $24 million accumulated in the previous years.

The Permanent Secretary has apologised to the Tote Board for this mistake. The Ministry of Health has also resolved the accounting treatment for the remaining $24 million with the Attorney-General and returned the amount to the Finance Ministry.