AHPETC red-flagged yet again in corporate governance, S&CC arrears

SINGAPORE — The Aljunied-Hougang-Punggol-East Town Council’s (AHPETC) management of service and conservancy charge (S&CC) arrears and corporate governance has continued to raise red flags, in the latest Ministry of National Development (MND) town council management report.

For its report for Financial Year 2014, the town council was banded “red” in the report in both areas — the worst rating. Chua Chu Kang Town Council (CCKTC) and Potong Pasir Town Council (PPTC) were the other two town councils not to receive the top banding of “green” for their S&CC arrears management. Both were banded “amber”.

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The annual report by MND rates town councils in the areas of estate cleanliness, estate maintenance, lift performance, S&CC arrears management and corporate governance.
In the report released today (Dec 1), the ministry noted that it was the fourth successive time that the AHPETC had been banded “red” for its S&CC arrears management, and that AHPETC did not submit its monthly S&CC arrears report for assessment even after reminders and deadline extensions. It also said that the arrears reports for December 2014, January and February 2015 were incomplete and “not in line” with MND’s prescribed format.

The Workers’ Party-run AHPETC was also banded “red” in corporate governance for the third successive year. The MND said this was because there were three legal and regulatory contraventions by the AHPETC, as reflected in its auditor’s findings and the AHPETC’s own corporate governance checklist. These included the town council’s timeliness in transferring sinking funds — meant for long-term cyclical works — and how it used the sinking funds, as well as not keeping proper accounts and records as required under the Town Councils Act.

The MND has withheld grants from the town council for two years, saying it has no guarantee the money would be used properly. Last Friday, the Court of Appeal ordered AHPETC —now Aljunied-Hougang Town Council (AHTC) following the WP’s loss of the Punggol East seat in the recent General Election — to make all the transfers it has missed to its sinking fund within three months, and bring in accountants to help it fix areas where it had breached the Town Councils Act.

Today, AHTC chairman Pritam Singh said the town council is working to address the two areas rated “red” by the MND, and the town council has approved the procurement of a new information technology system to file its reports. Mr Singh also said some improvements have been made to its current IT system, but limitations remain, and contribute to some management and reporting challenges. He also reiterated that the town council will work towards complying with the court’s orders.

As for CCKTC’s “amber” rating for S&CC arrears management, the MND noted there was an increase in the proportion of S&CC overdue for more than three months.

CCKTC chairman Zaqy Mohamad, noting that this is the first time the town council has been rated “amber” for its S&CC arrears management, said there was a spike in the number of appeals from residents to defer S&CC payments late last year, and the town council “took a compassionate view” to allow these appeals. In January, upon realising that the arrears were piling up, it began working with social assistance agencies to help the households in arrears. The issue was resolved within “two to three months”, said Mr Zaqy, who added that CCKTC will flag cases to agencies earlier in future.

Potong Pasir Member of Parliament Sitoh Yih Pin said PPTC, which was also rated “amber” in S&CC arrears management for FY2013, has made “good headway” in addressing this issue in the past six months. When working with residents on arrears, the town council takes into account their financial circumstances and arranges for them to pay in instalments, said Mr Sitoh, who is the PPTC chairman. 

In the area of corporate governance, Bishan-Toa Payoh Town Council was the only other town council to not achieve a “green” rating. The MND said this is because the town council made a technical error in data mitigation and has since made the necessary corrections.

In the areas of estate cleanliness and lift performance, all town councils were given a “green” rating. But in estate maintenance, 10 of the 16 town councils scored “amber”. Estate maintenance has been a recurrent problem for town councils — the FY2013 report had 11 town councils given the “amber” rating. This year, the issues observed by MND include obstructed common areas, unauthorised fixtures and exposed wiring.