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Auditor-General directed to scrutinise WP-run town council’s accounts

SINGAPORE — The Auditor-General will conduct an audit of the Aljunied-Hougang-Punggol East Town Council’s (AHPETC) 2012 accounts, after he was directed to do so yesterday by Deputy Prime Minister and Finance Minister Tharman Shanmugaratnam.

Logo of the Aljunied-Hougang-Punggol East Town Council

Logo of the Aljunied-Hougang-Punggol East Town Council

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SINGAPORE — The Auditor-General will conduct an audit of the Aljunied-Hougang-Punggol East Town Council’s (AHPETC) 2012 accounts, after he was directed to do so yesterday by Deputy Prime Minister and Finance Minister Tharman Shanmugaratnam.

Last week, independent auditors said they were unable to express an opinion on the latest financial statements of the Workers’ Party-run town council, after they could not determine if items worth more than S$22 million were valid or accurate. This led to the Ministry of National Development (MND) flagging cause for concern as it was the second successive year in which AHPETC’s auditors, Foo Kon Tan Grant Thornton, had submitted a disclaimer of opinion on the town council’s accounts.

A joint press statement by the MND and the Ministry of Finance said National Development Minister Khaw Boon Wan had requested Mr Tharman to exercise his powers under the Audit Act.

In a letter addressed to Mr Tharman, which was made available to the media, Mr Khaw noted that AHPETC had responded to the auditors’ report to say that the issues arose primarily from the time of the town council’s handover in 2011. But he pointed out that the explanation did not address several of the auditors’ concerns, such as the fact that AHPETC did not comply with the law to transfer S$12.46 million in conservancy and service charges into the bank account of its sinking funds.

For the whole of FY2012-13, AHPETC did not transfer any amount of conservancy and service charges to its sinking funds, Mr Khaw added.

“The Auditor has raised several more issues of pressing concern this year, compared with the previous year. This suggests a deterioration in the position,” Mr Khaw wrote in the letter, which was dated Tuesday.

Mr Tharman said he shared Mr Khaw’s concerns in his letter to the Auditor-General, directing the latter to carry out the audit.

The joint-statement from the ministries noted that AHPETC’s auditors had raised 13 issues of concern. The auditors also issued a qualified opinion on the town council’s other legal and regulatory requirements, stating that it had not complied with the provisions of the Town Councils Act and Financial Rules in various respects.

Under the terms of reference, the Auditor-General will ascertain, among other things, whether the town council took all reasonable steps to safeguard the collection and custody of its funds, as well as ensure that issues and payments were made in accordance with proper authority and payments were properly chargeable and supported by sufficient vouchers or proof of payment.

In a press statement, AHPETC Chairman Sylvia Lim said the town council welcomes the government’s decision to have its accounts for FY2012 audited by the Auditor-General’s Office. “We assure the Auditor-General’s Office of our full co-operation in this matter,” she said.

Speaking to reporters at his Meet-the-People Session, WP chief Low Thia Khiang echoed what Ms Lim said. He added that the audit directed by the Government would “put the matter in (the) proper perspective” and allow the parties to move on.

Mr Low said he understood that “certain figures were related to handover issues” but there was no point arguing over “very technical things”. “What I do know is that there is no money lost from the town council, no illegal or unauthorised payments. From the layman’s perspective, I am satisfied with what happened,” he said. “Technically, to comply with some audit requirements, I think (it) is a different ball game altogether.”

He reiterated: “As far as I am concerned, we know what we are doing. We don’t think we have done anything wrong or illegally.”

In response to media queries, the MND explained that it did not act when the town council’s auditors first submitted a disclaimer of opinion in 2011 as it decided to give the town council time to resolve the issues.

Last week, in response to the auditors’ report, Ms Lim said that in 2011 and 2012, AHPETC’s repeated attempts to obtain information from the former managing agent and government authorities — such as queries to the MND and the Housing and Development Board (HDB) about a sum of S$1.12 million that was recorded by the People’s Action Party-run Aljunied Town Council as receivables from the Citizens’ Consultative Committees (CCCs) for town improvement projects — did not yield answers.

The MND yesterday said AHPETC sought assistance twice in 2012 — on Nov 2 and Dec 20 — on the payment status of some outstanding items in their records. “This included the receivables from the CCCs for town improvement projects, as well as from the HDB. In both instances, the MND and the HDB provided the information available, on Nov 27, 2012 and Dec 21, 2012, respectively,” it said.

In turn, AHPETC was asked to provide further details and/or copies of invoices to enable the authorities to help check on the payment status. However, the town council did not respond to this, the MND said.

The ministry added that the MND and the HDB had paid the town council about S$2.9 million for projects funded by the Community Improvement Projects Committee (CIPC) — S$2.4 million in FY2011 and S$520,000 in FY2012. “As at end FY2012, there was no more outstanding amount due to AHPETC from the CIPC. Hence, we are puzzled by an outstanding receivable of S$1.12 million reflected in the town council’s FY2012 financial statements,” the MND said. ADDITIONAL REPORTING BY SUMITA SREEDHARAN

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