AHPETC deposited money into sinking-fund bank accounts late

SINGAPORE — Money that was supposed to go into its sinking-fund bank accounts was either deposited late or short, the Auditor-General’s Office’s (AGO) audit of Aljunied-Hougang-Punggol East Town Council (AHPETC) showed.

Instances of the Workers’ Party-run town council’s poor management of its sinking funds, which are required to be separately maintained so they can be used for improving and maintaining properties in the long run, were yesterday detailed in the AGO’s report.

For example, AHPETC transferred only S$1.5 million into its sinking-fund bank accounts at the end of FY2012/13 — about one-quarter of what was due then. The outstanding sum was deposited late, in two tranches. The first, of S$2.74 million, was deposited nine months late, while the second amount of S$1.2 million was transferred only six months after that.

The Town Councils Financial Rules stipulate that money meant for sinking-fund bank accounts is to be transferred within one month of the end of each quarter of a financial year.

But between July 2011 and March 2012, AHPETC did not make the required transfers to its sinking-fund bank accounts. When it did so in June last year — more than two years later — the S$7.44 million it deposited was short by S$469,000, the AGO said.

For financial years 2011 and 2012, the town council also did not return GST input tax that it had claimed from the taxman back to its sinking funds. The maximum amounts claimable by AHPETC in those two years were S$643,000 and S$888,000, respectively.

The AGO also found other lapses in AHPETC’s management of its sinking funds. In one instance, it wrongly deposited S$5.49 million into an operating fund bank account when it should have gone into its sinking-fund bank accounts. This sum comprised the capital and returns from two fixed deposit investments made with sinking funds that had reached maturity, as well as the closure of a sinking-fund bank account.

Though it later used S$5 million from its operating-fund bank account to open a sinking-fund fixed deposit account, it should have matched it to S$5.49 million, the AGO found.

AHPETC also wrongly used S$3.19 million from its sinking funds to pay for Neighbourhood Renewal Programme expenses in FY2012/13, though it later made good the amount — excluding GST of S$210,000.

In its response, AHPETC said it had noted the findings and had or would make good the shortfalls highlighted. It added that it would clear up procedures for transfers to the bank accounts for different funds.