SINGAPORE — When Parliament sits tomorrow to discuss the accounting lapses by the Aljunied-Hougang-Punggol East Town Council (AHPETC), Members of Parliament whom TODAY spoke to said they will raise issues related to corporate governance in all town councils and debate safeguards for public funds.

On Monday, the Auditor-General’s Office (AGO) released its report on AHPETC. It highlighted lapses such as failure to transfer monies into its sinking-fund bank accounts as required by the Town Councils Financial Rules, inadequate oversight of related party transactions and not having a system to monitor arrears of service and conservancy charges (S&CC) accurately.

National Development Minister Khaw Boon Wan has tabled a motion on the report. Responding to media queries, the Ministry of National Development said the motion will call on town councils to uphold higher standards of accounting, reporting and corporate governance to safeguard residents’ interests. It will also seek MPs’ support to strengthen laws governing town councils in order to “hold those responsible for their good management to proper account”.

The motion will also urge the House to “note with concern” the findings of the AGO report, namely the deficiencies in the Workers’ Party-run town council’s accounting systems and safeguards, the uncertain accuracy and reliability of its accounts, inadequate oversight over related party transactions and the risk that public funds were not properly managed and spent.

Aljunied GRC MP and Workers’ Party chairman Sylvia Lim, who also chairs AHPETC, had said her party will give its full response to the issues raised in the AGO report.

On the motion, Chua Chu Kang GRC MP Alvin Yeo said: “(It) is important to protect the use of public funds in the interest of residents from all town councils.”

Pasir Ris-Punggol GRC MP Zainal Sapari, who also chairs the constituency’s town council, said he hoped to glean takeaways from the Parliamentary debate on how his town council can make sure it has proper systems in place and improve its internal processes to ensure corporate governance.

Nee Soon GRC MP Lim Wee Kiak noted that the report highlighted “weaknesses in control and significant lapses that need to be addressed immediately”.

“It is a timely reminder to all town councils as all (of them) manage public funds collected from residents and also grants from Government. I look forward to hearing from the National Development Minister on additional measures to safeguard public interest,” he said.

Even though no evidence of fraud or criminal wrongdoing was flagged by the report, corporate governance experts and political analysts had raised concerns about AHPETC’s management of business transactions with companies in which council staff hold ownership interests.

AHPETC had claimed in its submissions to the Auditor-General that it was common practice for management personnel of managing agents to hold key positions in the town councils they manage. Coordinating chairman of People’s Action Party (PAP) town councils Teo Ho Pin declined to comment on the matter and referred to the debate tomorrow.

Nevertheless, other PAP town council chairmen whom TODAY spoke to said it was not common practice.

Mr Zainal said his town council personnel do not have any business linkages with its managing agent, EM Services. He added that the general rule is for employees to declare their interests upfront.

“It is very important that they declare their interests if EM Services is vying for (the town council’s) projects,” said Mr Zainal. “After they declare their interests, we do not allow them to partake in the deliberations during the tender process to ensure governance and minimise any potential conflict of interest.”

Adding that the town council will seek more than one bidder in each tender process, he also said that in cases when EM Services is bidding for projects in the estate, its representatives will not be involved in the decision-making process.

Similarly, Marine Parade town council chairman Lim Biow Chuan said he expects staff to declare any vested interests in managing agents.

Employees with conflicting interests should not be allowed to make any recommendations involving companies they hold shares in, he said.

“This will ensure we look after residents’ interests and that no one can push his or her personal agenda,” he added.