Independent panel to look into AHTC's payments

An independent panel has been appointed to look into improper payments made by the Aljunied- Hougang Town Council, following an extensive report by audit firm KPMG last year.
An independent panel has been appointed to look into improper payments made by the Aljunied- Hougang Town Council, following an extensive report by audit firm KPMG last year.PHOTO: ST FILE

Panel will study if improper payments can be recovered, take follow-up actions

An independent panel has been appointed to look into improper payments made by the Aljunied- Hougang Town Council (AHTC), following an extensive report by audit firm KPMG last year that found $6.9 million worth of such payments.

The panel, which will comprise senior counsel Philip Jeyaretnam, senior counsel N. Sreenivasan, and KPMG managing partner Ong Pang Thye, will consider if the payments can be recovered and take other follow-up actions.

The Housing Board (HDB) and AHTC said in separate statements yesterday that they have agreed to the appointment of the panel, which Mr Jeyaretnam will chair.

HDB had asked AHTC to appoint a third party to recover the improper payments made from town council funds. These include overpayments and payments without proper certification of work being done, among other things.

KPMG had traced some of the improper payments made to AHTC's then managing agent FM Solutions and Services.

The Workers' Party-run town council said in its statement that "the panel will act independently, without remuneration, and without taking directions from AHTC, HDB or any other party".

The panel will have the power to make demands and come to settlements on behalf of AHTC, among other things. It can also request the cooperation of AHTC members to provide necessary documents, and update AHTC and HDB on the progress of its work.

HDB said yesterday that the KPMG report on improper payments had flagged regulatory breaches by AHTC and also pointed out that the town council's "failed control environment exposed public funds to the potential for misappropriation and civil or criminal breach of trust".

It added that KPMG had said AHTC may potentially recover some of the losses from the town councillors if they were found to have breached their fiduciary duties. "The independent panel will consider what recovery actions should be taken, in respect of the findings in the report," HDB said.

The Workers' Party-run town council said in its statement that "the panel will act independently, without remuneration, and without taking directions from AHTC, HDB or any other party".

AHTC also said that while it had "a different perspective" on key aspects of the KPMG report, it "believes that it is in the interests of AHTC and its residents to appoint an independent panel to review the findings and take such action as deemed appropriate to safeguard AHTC's interests".

The report on improper payments by KPMG is part of the ongoing audit of AHTC following lapses flagged by its own auditors as well as the Auditor-General's Office. AHTC had appointed KPMG in March last year to look into its books following an order from the Court of Appeal.

A version of this article appeared in the print edition of The Straits Times on February 18, 2017, with the headline 'Independent panel to look into AHTC's payments'. Print Edition | Subscribe