AHPETC never denied FMSS, town council are related parties: Sylvia Lim

SINGAPORE — The Aljunied-Hougang-Punggol East Town Council ­(AHPETC) has never disputed that the town council and the managing agent are related parties, said Workers’ Party (WP) chairman Sylvia Lim, adding that the agent has no decision-making powers in award of tenders.

And in a small set-up as with its management agent (MA) FM Solutions and Services, it is inevitable for the directors of the company to be also holding key positions in the town council, she continued. 

Rising today (Feb 12) to speak on the Auditor-General’s report on the town council  — which flagged, among other things, its inadequate oversight over related party transactions — Ms Lim, who is also AHPETC chairman, asked the Government to make it clear as to which parties are considered “related” where town councils are concerned.

There is no clarity of practice in the financial statements of town councils, she said. For example, the independent auditor appointed by the AHPETC had said it was unable to determine the completeness of the related party disclosures in the town council’s FY2012 financial statements, as project management fee details were not disclosed. 

“The AHPETC could not understand this at the time ... the same auditors audited us in FY2011 and only required a related party disclosure of the MA fees,” Ms Lim said. 

“The former Aljunied Town Council management also had related parties and yet, there were no related party transaction disclosures in financial statements, which had no disclaimers.” The AHPETC, she said, has no issue with disclosing the value of related party transactions. “Moving forward, we have suggested that the (Ministry of National Development) make it clear which parties are considered related in the town council context,” she said.

Concurring, Aljunied GRC Member of Parliament (MP) Chen Show Mao said the AHPETC should have given full disclosure on related party transactions, but the question was what format to adopt. Standard guidelines — such as what to disclose and under what circumstances — should be introduced, he said.   

Ms Lim also took aim at the “misimpressions” that AHPETC secretary Danny Loh and general manager How Weng Fan, who are the main directors and shareholders of the company, are “freely being given contracts without tender and paying themselves handsomely without accountability”. 

“Contract values have been highlighted in media headlines, as if these were profit margins. It is necessary to highlight some key facts, as these misimpressions need to be debunked,” she said. 

For one, the MA has no decision-making power in relation to the award of tenders. These are awarded by a tenders and contracts committee, consisting of MPs and appointed councillors with no interest in the MA.

There are also internal processes in place to ensure that money is not unduly paid out to undeserving parties. For instance, there are committees to deliberate over awarding of contracts and there are procedures to oversee commissioned projects. 

With regard to cheques made out for payments, the town council chairman or vice-chairman is required to sign off. She added that the town council is looking to implement a checklist for tenders and contracts to help the deciding committee better evaluate the bids.

Ms Lim said the WP has been cooperative in the entire audit process, providing all the necessary documents — contrary to public perceptions that the WP has been reluctant to provide information in the audit process. 

She also noted there has been a misunderstanding over the transfers of money with regard to the sinking funds — that monies were lost. 

The chairman said necessary steps have been taken to correct the wrong transfers. “This was not the case of using the sinking funds for wrong purposes,” she stressed.

On unintended overpayments to FMSS over a nine-month interim period for lift services, Ms Lim said she bears responsibility for the mistake, which was due to FMSS using the wrong unit multiplier to compute prices. About S$122,000 has been paid back, she said.