MND refutes Sylvia Lim’s statement on withholding of S&CC grants

SINGAPORE — Workers’ Party (WP) chairman Sylvia Lim today (May 14) dismissed the suggestion by the Ministry of National Development (MND) that she or anyone on behalf of the WP-run Aljunied-Hougang-Punggol East Town Council (AHPETC) had said that the town council does not require the Government grants.

In fact, she said that AHPETC “hopes to receive the operating grants soon”. But her lengthy statement drew a sharp retort from the ministry, which said that it was “another example of why MND had to go to court to seek (the) appointment of independent accountants”. An MND spokesperson said: “This is the only way to depoliticise the issue: AHPETC deals directly with the Courts, and not engage in endless argy-bargy with MND.”

She added: “Ms Sylvia Lim gives the impression that AHPETC is not making transfers to the Sinking Fund and contravening the law, because MND has withheld the grants. The fact is AHPETC also did not make mandatory transfers to the Sinking Fund in financial years 2011/12 and 2012/13, while receiving grants from MND.”

In the press release put up on AHPETC’s website, Ms Lim explained why the town council declined MND’s offer to disburse half the service and conservancy charge (S&CC) operating grants, subject to certain conditions. MND made the offer on Oct 7 last year. “The option was considered carefully right up to November. By then, much progress had been made on the Auditor-General’s Office audit, and it appeared that the conclusion of the audit was imminent,” Ms Lim said.

Moreover, in order to ensure the continuity of operations, AHPETC decided to earmark the entire sum of the withheld grant as part of its sinking fund transfer for the financial year of 2014, while it “carried on making the quarterly sinking fund transfers when it could”, Ms Lim said.

She added: “Like all town councils, AHPETC requires the operating grants to fulfil its obligations ... Without (them), all town councils would run deficits, and over time would face cash flow problems and financial difficulty.”

AHPETC had not made payments to the sinking fund for two quarters of FY2014, even though these were mandatory. On this, Ms Lim said: “It was the utmost priority that essential services to residents not be disrupted while the grant was withheld. AHPETC thus prioritised the continuity of operations and ensuring cash flow for routine activities. It deferred its quarterly sinking fund transfers, which enabled interim management of cash flow through retention of more funds in its operating funds.”

In March, MND made the unprecedented move of applying to the court to appoint independent accountants to safeguard government grants to AHPETC. Ms Lim said that AHPETC was “advised that the legal basis for such a court order is questionable”. “AHPETC also does not believe that there is factual justification to mount an oppressive fishing expedition,” she said.

Responding to Ms Lim’s statement, the MND spokesperson said that all town councils are entitled to the grants, “but they must be able to safeguard these grants, which are public funds, and channel them to the purpose for which they are given”. 

The spokesperson said: “MND has given AHPETC much latitude, as far as grants were concerned. In fact, in the first year when their own auditors qualified their accounts and had four disclaimers, MND still gave AHPETC the grant, because the town council assured MND that they would rectify their shortcomings.”

However, given that following year’s audit showed that the situation got worse, AGO had to be called in to do a special audit of the town council’s accounts — the first time in the history of town councils, the spokesperson pointed out. “Under the circumstances, it would be unconscionable for MND to continue to give AHPETC the grants, which are public moneys, without proper safeguards,” she said.

“Her latest statement still doesn’t explain clearly why AHPETC did not disclose to the court as late as March 27 that it needed these grants. Indeed, it had insisted it did not.”