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Tighter governance rules proposed for town councils

SINGAPORE — The Ministry of National Development (MND) has proposed tighter rules on governance of town councils, among other proposals, following a three-year review of the Town Councils Act.

SINGAPORE — The Ministry of National Development (MND) has proposed tighter rules on governance of town councils, among other proposals, following a three-year review of the Town Councils Act.

Yesterday, the MND put up the proposals for a one-month public consultation. They seek to clarify the roles and functions of town councils, improve their governance and financial management, as well as enhance the MND’s regulatory oversight. A Bill is expected to be tabled by early next year.

The dozen proposed changes to the Act include subjecting town councils to a code of governance and internal controls, as well as requiring them to notify residents and the MND on key officer appointments such as chairman, town councillors and general manager.

The regulatory framework for town councils would also be strengthened, with the addition of more penalty provisions to prevent “clear and egregious contraventions” such as withholding of information from the MND and failure to submit audited reports.

It will also be written into law that town councils have to set up a fund dedicated to replacement of lifts and critical lift parts — a move that was earlier announced, following a spate of high-profile Housing and Development Board (HDB) lift incidents involving serious injuries and even a death this year.

In drafting the proposed changes, the MND said it took reference from provisions in the Charities Act, given the similarities between town councils and charities. “Both entities run autonomously, manage public funds and consist of volunteers who help out on a part-time basis,” the ministry noted.

First announced in 2013, the review came after the MND had looked into the People’s Action Party-owned company Action Information Management (AIM) — which provided software to PAP town councils — and concluded there was no misuse of public funds, nor any conflict of interest between any town council members and the company. However, the ministry recommended that the Government conduct a “strategic review” on the roles and functions of town councils in view of their becoming politicised.

Amid the review of the Act, Parliament debated a motion in February last year on the Auditor-General’s Office (AGO) audit report on the then-Aljunied-Hougang-Punggol East Town Council (AHPETC). The AGO report found deficiencies in AHPETC’s financial and accounting systems, record-keeping and safeguards, and concluded that “until the weaknesses are addressed, there can be no assurance that AHPETC’s financial statements are accurate and reliable and that public funds are properly spent, accounted for and managed”.

Then-National Development Minister Khaw Boon Wan told the House that the MND would address the weaknesses in the town council regulatory framework as the light-touch approach was no longer tenable. All 85 MPs present then — including the Workers’ Party MPs in attendance — supported the motion to strengthen the legislative framework for town councils and hold those responsible for their management to proper account.

Under the proposed amendments, town councils are required to submit medium-term financial projections to the MND, as well as improve the management of situations where there are conflicts of interest.

Town councils were introduced in 1989 to give elected MPs more authority and responsibility over the HDB estates in their constituencies. Unlike the Companies Act and the Charities Act, which provide for full inquiries and penalties such as fines or jail terms when rules are broken, the Town Councils Act took a “light-touch approach” to regulation and enforcement.

Prime Minister Lee Hsien Loong first raised the need to “re-examine the nature of town councils” in January 2013, as he called for a review of the AIM transaction.

During the General Election last year, Emeritus Senior Minister Goh Chok Tong explained why the PAP government started the town council system. Mr Goh was Deputy Prime Minister when Parliament passed the Town Councils Act in 1988. Speaking on the sidelines of a walkabout in Marine Parade GRC, Mr Goh said the Act gives MPs direct control over their town council and makes them directly accountable to their constituents.

The MND said yesterday that the proposed amendments “seek to ensure that town councils deliver essential public services in a consistent, fair and sustainable way that serves the interest of residents, while retaining the autonomous nature of town councils”. It added that the review also recognises that the public “expects transparency and accountability from town councils”.

Other proposed amendments include empowering the MND to direct town councils to make preparations for public emergencies such as disease outbreaks and terrorist attacks.

Clarifying the roles and functions of town councils, it was made clear that they have to cooperate with government agencies to “better serve residents’ needs and interests” when it comes to upgrading works, installation of CCTV cameras and carrying out of mosquito control measures. Town councils also should not engage in substantial trading or financial activities, such as commercial fairs or promotional events, that are “incompatible with their core functions”.

The public can submit their feedback via email (feedback [at] mnd.gov.sg), post or fax to the Ministry of National Development by November 17.

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