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AHTC lapses ‘on much bigger scale’ than that highlighted in AGO report

SINGAPORE — There is a “world of difference” between the lapses found in Government agencies, as highlighted in the Auditor-General’s Office (AGO) report, and those in the Workers’ Party-run Aljunied-Hougang Town Council (AHTC), said Senior Minister of State (Finance and Law) Indranee Rajah on Tuesday (Aug 16).

SINGAPORE — There is a “world of difference” between the lapses found in Government agencies, as highlighted in the Auditor-General’s Office (AGO) report, and those in the Workers’ Party-run Aljunied-Hougang Town Council (AHTC), said Senior Minister of State (Finance and Law) Indranee Rajah on Tuesday (Aug 16).

“They are different in scale, in nature, and in the way Government agencies and the town council have each responded to problems when they are found,” Ms Indranee told Parliament, in response to a question by Member of Parliament Liang Eng Hwa (Holland-Bukit Timah GRC), on the difference between the AGO report and the latest report issued by audit firm KPMG on the AHTC. Both reports were made public in July.

In terms of scale, Ms Indranee pointed out that the problems at AHTC are of a “systemic nature”,  whereas “there is no evidence of widespread compliance problems” on the part of Government agencies.

Quoting the report issued by KPMG, AHTC’s appointed independent auditor, Ms Indranee said control failures were found to be “pervasive” and cut across key areas, including governance and financial control. 

The AGO report on Government agencies did not point to similar problems. 

“From this year’s and past years’ AGO reports, there is no evidence of widespread compliance problems. There’s certainly no culture of non-compliance,” she said.

Ms Indranee also noted that the nature of related third-party transactions — which were flagged by both the AGO and KPMG reports — differed when it came to personal gains.

In the town council’s case, key management employees, such as its general manager and secretary of the then-Aljunied-Hougang-Punggol East Town council (AHPETC), were also director and owner in companies the town council had hired to provide services. 

These companies, when reviewed by the Accounting and Corporate Regulatory Authority (Acra), were also found to have “abnormally high” profit margins, Ms Indranee noted.

On the other hand, in the case involving the directors of Nanyang Polytechnic (NYP) and its subsidiary, Nanyang Polytechnic International (NYPi), there was no personal interest involved, and no leakage of money to any third parties, she said.

In its report, the AGO had criticised NYP for poor financial controls and governance, and excess funding disbursed to its subsidiary.

Ms Indranee also noted that AHTC and the various government agencies had reacted differently when problems were flagged.

She said AHTC also did not take prompt measures to rectify the problems despite repeated requests by the Ministry of National Development until the case was brought before the courts.

“We understand AHTC is working on its remedial plans. In (the KPMG report), AHTC has updated and implemented its revised Conflict of Interest policy, which now extends to AHTC town councillors, management and employees, and supporting procedures to manage conflicts of interest. 

“However, the other remediation plans on the governance of related party transactions were still unresolved,” said Ms Indranee.

“In contrast, every agency takes AGO findings seriously. Where there are lapses, they are openly acknowledged, and steps (are) taken to address them as soon as possible,” she added.

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