SINGAPORE — Aljunied-Hougang-Punggol East Town Council (AHPETC) has been given the lowest rating in corporate governance by the Ministry of National Development (MND) in its Town Council Management Report.

The Workers’ Party-run town council was not given a rating for corporate governance when the MND published its annual management report for all town councils last November, as it had failed to submit its financial audits. It submitted its audited financial statements on Feb 10.

Publishing an update on the report today (March 7), the MND said it awarded the town council a “red” grade as it had not complied with the provisions of the Town Councils Act and the Town Councils Financial Rules, and there were at least two counts of contraventions. AHPETC had failed to transfer S$12.46 million into the bank account of the sinking funds and failed to keep proper accounts and records of its transactions and affairs.

The MND also said that AHPETC has not submitted its auditor’s management letter, “despite multiple reminders”. “MND has reminded the TC to do so as soon as possible,” it said.

In November, AHPETC Chairman Sylvia Lim had said that there was a delay in submitting the documents because the town council’s auditors were still finalising the financial statements and dealing with complexities that arose when the AHPETC took over management of Punggol East after a by-election last year.

Last month, it was announced that the Auditor-General will audit AHPETC’s FY2012/13 accounts after the town council’s independent auditor raised 13 issues of concern over its accounts. This was the second year in which AHPETC’s auditors, Foo Kon Tan Grant Thornton, submitted a disclaimer of opinion on the town council’s accounts.

Today, Ms Lim said in a media statement that the town council’s banding for corporate governance “comes as no surprise”. The factors MND took into consideration “included matters on which we had provided information in our statement of Feb 14 and in the Town Council’s Annual Report itself”.

“These matters are the subject of an ongoing audit by the Auditor-General’s Office, and we will respond further, if there is a need to, after the audit,” she said.

In response to media queries, a MND spokesperson said this is the first time a town council has received a “red” banding for corporate governance. “We will assess the follow-up action, if any, after the (town council) submits the auditor’s management letter which is still outstanding, despite repeated reminders,” he added.