Singapore's Auditor-General's Office has looked into the country's Health Promotion Board's procurement and management of fitness trackers for its National Steps Challenge programme and found that the agency held an excess of unused trackers and ran inadequate processes in accounting for the tracker stocks.

FINDINGS

The AGO disclosed in its report that the HPB had an excess of fitness trackers worth SG$5.39 million ($3.9 million) based on the agency's latest full stock count in January. This is approximately 341,208 fitness trackers procured between Seasons 1 and 5 of the NSC programme. The office also found in its audit that the tracker stocks had mouldy straps and faces.

When asked to explain, the HPB said its over-procurement was due to over-estimation of demand at the start or during the initial distribution period of the NSC seasons. It mentioned that it has difficulty achieving zero wastage as the trackers were only useful for two years. 

The AGO report highlighted that the two-year warranty for 65% of the excess trackers had already expired, while the warranty of the remaining 35% would end by December this year.

Moreover, the auditor-general also pointed out that the trackers were at risk of getting lost or pilfered as the HPB has "no proper process to centrally monitor and account for the movement and stock of trackers" and held "fragmented and incomplete" records. It also has no periodic reconciliation of records with stocks on hand. Additionally, it did not have the results of its annual stock checks at its vendor's warehouse. 

The HPB runs manual processes in managing tracker stocks, involving external parties including suppliers, an outsourced vendor providing warehousing and inventory management services, and several event organisers responsible for tracker distributions.

Based on HPB's latest reconciliation effort in March, it estimated a shortfall in trackers of around 17,909 pieces worth about SG$720,000 ($530,000), though the figure might not represent actual deficits given incomplete records. 

RESOLUTION

The HPB is in the process of disposing of the obsolete trackers from NSC Seasons 1 to 3, while the excess trackers from NSC Seasons 4 and 5 have been put up in one-for-one exchanges to replace older trackers held by participants. 

For its future purchase plan, the HPB told the AGO that it will consider the projected percentage of participants who are likely to receive its trackers. It would only buy additional trackers on an on-demand basis. These changes in procurement will be implemented by October for NSC Season 6 onwards.

In managing tracker stocks, the agency has outlined actions to take by end-September, including the enhancement of its tracking mechanism and exploring the use of a new digital system to centrally monitor stock movements; conducting monthly reconciliation between its stock record and its vendor's record; and performing biannual audits and stock checks at its vendor's premises. 

THE LARGER TREND

In November 2015, the HPB inaugurated its NSC programme which aims to encourage citizens to exercise more and engage in moderate to vigorous physical activities. For each "season", the agency provides free fitness trackers to eligible participants.

In other news, the current NSC Season 5 has been extended for a Bonus Round until 29 August.

ON THE RECORD

"Excess trackers not put to use by HPB had resulted in a significant sum of public funds wasted over the last five years, as the usability of these trackers would deteriorate over time due to the expiry of warranty and technology obsolescence," the AGO report stated.

"The over-estimation of final demand arose as HPB had pre-emptively topped up its stock of fitness trackers each season based on the observed interest from the public, which manifested for example, in long wait times and queues from tracker collection. For future seasons of the [NSC], HPB will be more conservative in our projections," the HPB said in a separate statement.