Workers’ Party links audit issues to post-poll handover; MND hits back

SINGAPORE — The Aljunied-Hougang-Punggol East Town Council (AHPETC) yesterday sought to relate some concerns flagged by independent auditors over its latest financial statements to handover issues dating back to the 2011 General Election. This explanation was denied by the Ministry of National Development (MND) that pointed out that the majority of the concerns which the auditors made a disclaimer on “are not related to handover issues”.

The town council’s Chairman Sylvia Lim said yesterday in a media statement that it is seeking the ministry’s help to resolve gaps in its accounts, while criticising observations made by the latter on Thursday as “incomplete”.

The town council’s auditors, Foo Kon Tan Grant Thornton, were unable to determine if items worth over S$22 million in its latest financial statements were valid or accurate. This was among the issues highlighted by the MND in a press statement on Thursday, which also flagged as cause for concern the auditors’ disclaimer of opinion on the accounts.

Ms Lim said: “As MND has expressed its concerns over our accounts, we seek its assistance in resolving the issues raised by our auditor, by helping us verify and confirm the various opening figures handed over from the former Aljunied Town Council.”

Responding to Ms Lim’s statement last night, the MND did not indicate if it would assist the town council, but said the town council’s auditors raised 13 issues of concern in making a disclaimer, of which nine were “new issues of concern” raised in the 2012 financial year.

Four issues were from the previous financial year, and the Workers’ Party-run town council had assured MND last August that most had been rectified, with a few still in progress, the ministry said.

“The auditor’s latest report however showed this not to be the case,” it added.

The new issues of concern include the town council not transferring money into its sinking fund as mandated under the Town Councils Financial Rules.

“Such failures are not related to handover issues,” the MND said.

The ministry also took issue with Ms Lim saying the auditors had given a qualified report and not an adverse one. “The AHPETC auditor expressed a disclaimer of opinion on the Town Council’s FY2012 financial statement. This is more severe than a qualified opinion,” the MND said.

‘Lapses didn’t result in unauthorised spending’

Ms Lim had said the town council understands the auditors’ plight, as there were information gaps that existed at the handover after the 2011 General Election, that are still not filled.

For the 2011 financial year, the auditors had tried to seek information from the town council’s former auditors but failed.

“Repeated attempts” by the town council to get information from the former managing agent and government authorities did not yield answers, she said.

The MND and the Housing and Development Board were asked about S$1.12 million which the then-People’s Action Party-run Aljunied Town Council had recorded as receivables from the Citizens’ Consultative Committees for town improvement projects, for instance.

Attempts in the 2012 financial year were also unsuccessful, said Ms Lim, who is Member of Parliament for Aljunied GRC. “Unless those agencies with the required information furnish them to the Town Council, it is likely that information gaps will remain and the accounts will continue to be qualified every year,” she said. “In this regard, we note that the MND could well be the best party to assist the Town Council to resolve some of the key information gaps.”

Nevertheless, Ms Lim acknowledged lapses in the transfer of money to the town council sinking fund in the 2012 financial year. Town councils are required to transfer conservancy and service charges, grants-in-aid and interest payable to the sinking fund within one month from the end of each quarter of each financial year.

Ms Lim said the oversight did not result in any loss of money or unauthorised spending, and has been rectified.

She expressed puzzlement that the MND and auditors would take issue with how the town council did not provide details of project management service fees paid to its managing agent, FM Solutions and Services. It is standard practice for town councils to include project management fees in the managing agent services awarded, she said.

Media reports repeating “past insinuations of impropriety” in the town council awarding the managing agent contract to FM Solutions “must be debunked”, Ms Lim added. She reiterated that FM Solutions was appointed without tender for only one year right after the 2011 GE because of “urgent need” as the incumbent managing agent wanted to be released.

In 2012, an open tender was called but only FM Solutions submitted a bid, which was rigorously evaluated and subject to a special audit.

“Any allegation of impropriety is utterly rejected,” said Ms Lim, who welcomed any audit by the MND that it deems necessary.