HDB urges Aljunied-Hougang Town Council to ‘resolve issues fully without further delay’

SINGAPORE — Just a day after the Aljunied-Hougang Town Council (AHTC) said it has resolved all financial and governance lapses, the authorities said the Workers’ Party (WP)-run town council still has to settle some outstanding issues.

Responding to media queries on Friday (Feb 16), the Housing Development Board (HDB) said certain outstanding matters were deemed resolved by the town council’s auditors KPMG on the basis that “recommendations have been given to AHTC, or AHTC has informed KPMG of the intended follow-up actions”.

These outstanding matters include getting an external auditor to verify the opening balances for AHTC’s financial statements, and making transfers totaling S$13.9 million to make up for the shortfall in past transfers to the town council’s sinking fund.

KPMG noted in its January progress report that, to make up for a shortfall in its sinking fund, AHTC will make the transfers in four installments of S$3.5 million each in February, May, August and November.

“HDB urges AHTC to take follow-up actions to resolve all these issues fully and without further delay,” said an HDB spokesperson.

The HDB’s comments came after WP posted a statement on Thursday by Mr Pritam Singh, the town council’s chairman and Member of Parliament for Aljunied GRC, which said the AHTC had submitted the 23rd and final KPMG monthly report to HDB.

In that report, KPMG said the town council has resolved 17 lapses spanning across governance, financial control and procurement among others.

As part of efforts to improve corporate governance, Mr Singh said AHTC has also introduced a new town council financial system, which is now fully operational, and has appointed an internal auditor to stress-test its controls and procedures relating to the new financial system and procurement matters over the next two years.

The latest and final KPMG progress report marked the conclusion of a two-year long clean-up of the town council’s lapses in corporate governance, which were flagged by the Auditor-General’s Office (AGO) in its special audit report in February 2015.

Following a court order in Jan 2016, the town council appointed KPMG two months later to ensure it fix the lapses.

The lapses were found when AHTC was then known as Aljunied-Hougang-Punggol East Town Council (AHPETC). It was renamed following the 2015 General Election after WP lost the single ward of Punggol East to the People’s Action Party.

Even though AHTC has resolved the lapses flagged by the AGO, WP is still embroiled in two ongoing lawsuits.

Last July, three of its MPs – Mr Singh, Ms Sylvia Lim and Mr Low Thia Khiang – were sued by AHTC for allegedly breaching their fiduciary duties by carrying out improper payments.

All three MPs have categorically rejected the allegations in the suit filed by an independent panel – chaired by Senior Counsel Philip Jeyaretnam – which was appointed by AHTC to recommend the recovery actions the town council needs to take over the large sums of improper payments that it had made from its funds.

Two months later, Pasir Ris-Punggol Town Council (PRPTC) filed a similar lawsuit against the three WP MPs for monies allegedly owed to Punggol East.

The HDB added: “HDB will continue to monitor the developments related to AHTC’s and PRPTC’s recovery actions against the defendants.”

Meanwhile, to mark the release of the final KPMG report, WP’s MP Png Eng Huat took to Facebook on Thursday (Feb 15) to dispel accusation by PAP’s Punggol East MP Charles Chong that the sum of S$22.5 million, which was transferred to AHPETC by PRPTC, was unaccounted for.

Mr Png said he had asked Mr Chong about the issue when they met to discuss handover matters after the latter won the Punggol East seat. Based on PRPTC’s audited financial statement since 2013, there was S$22.8 million to S$26.3 million attributed to Punggol East in the WP town council’s accounts, he added.

In PRPTC’s financial report in 2016, a sum of S$24.7 million was attributed to Punggol East, noted Mr Png.

He added: “In its 2017 financial report, PRPTC said AHTC had sent over the audited handover Financial Statement of PE, and ‘in the good hands of Pasir-Ris Punggol Town Council, the audited Financial Statement for the Financial Year ended 31 March 2017 is now unqualified’.”

“That means there was no such missing money else the accounts would be qualified!”

Saying that “we will never solve the mystery” of the unaccounted S$22.5 million, Mr Png pointed out that none of the audited statements from the two town councils and special reports by both KPMG and PwC – hired by PRPTC to look into the Punggol East accounts after the election – could “shed any light on the allegation”.

He ended the post by writing: "The end of the KPMG audit also marks the end of my attempt to find some answers into this matter."