SINGAPORE - Workers' Party-run Aljunied-Hougang Town Council (AHTC) needs to have more staff with relevant experience if it is to resolve problems in its accounts in a timely fashion, its auditor KPMG said on Thursday (Aug 18).
In its fifth report, released by the WP on its website, the auditors said AHTC has resolved three of the 17 audit points raised in its previous report, with the remaining 14 audit points - or 82 per cent - of the remedial measures still subject to review by KPMG and yet to be resolved.
The auditors highlighted the progress achieved thus far in AHTC's investigation of items in its temporary clearing accounts to drive home the point that the town council needed more qualified manpower to remedy its lapses.
Of the more than one million transactions in 18 temporary accounts to be cleared - a task KPMG said would take about a year - AHTC has only cleared 599 of them over the past two months.
"The rate of progress has increased since our July 2016 Report; however, AHTC needs to increase the available staff with the requisite expertise so that it could complete investigation prior to the migration of accounting data to AHTC's new accounting system," said the report.
Last month (July), AHTC awarded a $750,000 contract for a new accounting system to Anacle Systems, one of two companies that tendered for the job.
AHTC had hired KPMG to look into its books following significant lapses in governance flagged by its own auditors and the Auditor-General in a special report in February last year.
KPMG had said in July that they found "pervasive" control failures in its accounts and work processes over the past five years, and estimated that the town council will take at least 18 months to rectify all the lapses and weaknesses that have been found.
AHTC had said it aimed to complete its rectification plans within 15 months.
KPMG also said it had reviewed all payments made using a "dummy" vendor code, which AHTC created in 2015 and is used for refunds of tender deposits and other purposes.
The auditor had said in its July report that use of the "dummy" code makes it easier for duplicate or fictitious payments to be made without detection.
But in its latest report, KPMG said it found no such payments after reviewing all 207 payments - totalling $271,598.20 - recorded with the code.
However, in 41 instances, totalling $248,346.07 in transactions, AHTC should have used a supplier account instead of the "dummy" code, said KPMG.
It also found seven invoices totalling $23,197.40 where payment was made without AHTC confirming receipt of goods and services, breaching Town Council Financial Rules.
"AHTC's controls require process owners to review, stamp and sign-off invoices as evidence of verification for payment," said KPMG. "The Finance Department should not process payments before the process owner has provided evidence that they have validated the expense."
AHTC chairman Pritam Singh highlighted that KPMG's check on its use of the "dummy" code was complete in a statement on Thursday, and said that the auditors did not find any duplicate or fictitious payments there.
"AHTC accepts the control shortcomings in the use of these codes and will be reviewing its processes to ensure their proper use in future," he added.
