Background to the AHPETC audit

SINGAPORE — The Auditor-General’s Office (AGO) today (Feb 9) issued a report highlighting lapses in governance and compliance by the Aljunied-Hougang-Punggol East Town Council.

These lapses include failing to transfer monies into sinking fund bank accounts as required by the Town Councils Financial Rules, and inadequately managing conflicts of interests when it came to procuring services for the Workers’ Party-run town council.

Here is a background summary to the AGO report:

Nov 21, 2013: Findings of the FY2012 Town Council Management Report (TCMR)

The AHPETC was given a “red” status for its management of its service and conservancy charges (S&CC) arrears and a “pending” status for its corporate governance practices.

- AHPETC stopped submitting the monthly S&CC arrears reports since April 2013 and missed the Aug 31, 2013 deadline for all Town Councils to submit financial statements.

- AHPETC’s response for the arrears situation: AHPETC had stepped up enforcement measures, including court prosecution, to recover the outstanding arrears from 2012.

- AHPETC’s response for the “pending” status: AHPETC had submitted to the Ministry of National Development (MND) the S&CC arrears data, but it was rejected because it was not in the format required. AHPETC, then, had to defer the next submission because its finance team was occupied with two consequent audits – first by AHPETC’s own auditors in mid-2013, then by the AGO, starting March 2014.

Feb 10, 2014: AHPETC submitted FY2012 financial statement

Five months past the deadline and after seven reminders, AHPETC submitted its FY2012 financial statements and report from its auditors, Foo Kon Tan Grant Thornton LLP.

Feb 13, 2014: MND flagged concern of the submitted financial statement. AHPETC’s auditor files disclaimer of opinion, as auditors were unable to express opinion after they could not determine if items worth more than S$22 million were valid or accurate.

Feb 15, 2014: Workers’ Party (WP) linked the audit issues to the post-elections handover that dated back to the 2011 General Elections, but MND replied, saying that majority of the concerns raised by auditors were not related to the handover.

Nov 3, 2014: Findings of the FY2013 TCMR

AHPETC was banded red again for its collection of S&CC arrears and for corporate governance. MND points out that the S&CC arrears had increased to an unprecedented rate of 29.4 per cent by end April 2013, a drastic rise from its 2.6 per cent in FY2010 and its 8.4 per cent in FY2011 and FY2012. The required monthly S&CC arrears report had still not been submitted – an ongoing negligence since May 2013.

Dec 10, 2014:

Chairman of Workers’ Party, Ms Sylvia Lim, replied to a published opinion by Mr Lawrence Wong, Minister of Culture, Community and Youth, in The Straits Times and urged the Government to make public the Auditor-General Office’s (AGO) findings of its accounts when ready. She said “more productive discussions can be entered into” once the audited information is available.

Jan 27, 2015: Error in counting has led to the inflated S&CC arrears report

AHPETC said a double-counting error has inflated the S&CC arrears figures to the eye-catching 29.4 per cent in the FY2013 report. In reality, 5.66 per cent is the right figure for the proportion of AHPETC households in S&CC arrears for three months and over. The error was attributed to the staff having to manually sort and count data as they do not have a proper software to computerise the job.

Feb 9, 2015: Auditor-General finds lapses in governance and compliance by AHPETC

The lapses found include the failure to transfer monies into sinking fund bank accounts, and inadequately managing conflicts of interests in the town council’s procuring services. Parliament will be debating on the Auditor-General report on AHPETC’s financial accounts come Thursday (Feb 12).