Independent panel appointed over AHTC’s improper payments

SINGAPORE — An independent panel, chaired by Senior Counsel Philip Jeyaretnam, has been appointed to recommend the recovery actions the Aljunied-Hougang Town Council (AHTC) needs to take over the large sums of improper payments that it had made from its funds, which were flagged by KPMG in October last  year.

The Court of Appeal on Friday (Feb 17) granted the appointment of the three-men panel, which also includes Senior Counsel N Sreenivasan and Mr Ong Pang Thye, a managing partner of KPMG.

In a report released last October, independent auditors from KPMG found that flawed governance in AHTC led to “improper payments” running into the millions to various parties such as to its former managing agent FM Solutions & Services (FMSS) and service provider FM Solutions and Integrated Services (FMSI).

The newly-formed independent panel will consider what recovery actions should be taken with respect to the report’s findings.

Under its terms of reference, the panel is to “act in the best interests of AHTC” and “remain independent and impartial at all times”. While it is entitled to seek and consider the views of AHTC or the Housing and Development Board, it should not take any direction from them or other stakeholders.

The improper payments uncovered by KPMG include overpayments for project management fees, overpayments to FMSS for purported overtime and CPF contributions payments to FMSS without certification that work had been performed, as well as payments made without the requisite co-signature of members of the town council.

These amounted to about S$1.5 million, of which at least S$600,000 ought to be recovered by the town council, said KPMG.

The report also said the tendering out of the contracts to FMSS and FMSI was “deficient in numerous respects”, particularly in terms of cost.

AHTC chairman and WP Member of Parliament Pritam Singh said the appointment of the independent panel is “in the interests” of the town council.

“While AHTC’s key officials have a different perspective from the audit team on key aspects of the report, AHTC believes that it is in the interests of AHTC and its residents to appoint an independent panel to review the findings and take such action as deemed appropriate to safeguard AHTC’s interests,” said Mr Singh, in a statement to the press on Friday.

The town council acknowledged that the appointment of the panel will not affect or preclude the right of any government or regulatory agency in taking action against it.

In its October report, KPMG said it was beyond its mandate to conclude whether any offence had been committed, but noted: “We are advised that, had the shortcomings (identified in) this report been committed deliberately, they could amount to criminal conduct, the implications of which the town council should consider.”