Auditor-General's report on WP-run Town Council finds lapses in governance and compliance

In its audit of the Workers' Party-run Aljunied-Hougang-Punggol East Town Council (AHPETC), the Auditor-General has found several lapses in governance and compliance with the law, it said in a report that was issued on Friday, Feb 6, 2015 and made pu
In its audit of the Workers' Party-run Aljunied-Hougang-Punggol East Town Council (AHPETC), the Auditor-General has found several lapses in governance and compliance with the law, it said in a report that was issued on Friday, Feb 6, 2015 and made public the following Monday. -- PHOTO: ST FILE

SINGAPORE - In its audit of the Workers' Party-run Aljunied-Hougang-Punggol East Town Council (AHPETC), the Auditor-General has found several lapses in governance and compliance with the law.

In a report issued on Friday and made public on Monday, the Auditor-General's Office (AGO) highlighted "weaknesses" like the failure of AHPETC to transfer money into its sinking funds as required, and inadequate oversight of transactions where conflicts of interest were present.

The conflict of interest issues arose in payments involving individuals who were both employed by AHPETC and who also owned or were linked to companies hired by AHPETC for estate management work, the report said.

The AGO added that the integrity of these payments were put at risk by inadequate oversight. It noted 84 instances where one of AHPETC's staff involved in reviewing work and approving payment also had ownership interest in the company that was receiving the payment.

This was one of the five broad areas where "major lapses" occurred, said the AGO report, which said: "Unless the weaknesses are addressed, there can be no assurances that AHPETC's financial statements are accurate and reliable, and that public funds are properly spent, accounted for and managed."

In response, AHPETC, which is chaired by WP chairman Sylvia Lim, said that it would benefit from the AGO's findings.

"What is clear from the AGO findings is that no money has been found to be missing, nor has there been any criminal or dishonest activity uncovered. Instead, the observations show mistakes and omissions due to inadvertance, human error, IT system constraints and a lack of experience in dealing with certain scenarios," said AHPETC.

The AGO replied that this "broad conclusion cannot be derived from AGO's audit."

The audit report will be discussed in Parliament on Thursday, as a motion on it is being tabled by National Development Minister Khaw Boon Wan.

AHPETC chairman Sylvia Lim said in a media statement on Monday night: "We understand that there will be a motion filed in Parliament to debate the matter on Thursday. That being the case, the Town Council will give its response in Parliament."

The top-level scrutiny of the only opposition-run Town Council in Singapore was requested by Finance Minister Tharman Shanmugaratnam last February, following two consecutive years where AHPETC's own auditors said it could not give its accounts a clean bill of health.

In his letter requesting the AGO to step in, Mr Tharman said that this raised "serious questions about the adequacy of AHPETC's financial and accounting systems, and whether public funds in AHPETC are properly applied."

Included in the AGO's report were responses from AHPETC to each of the five lapses identified. In some cases, the AGO responded in turn to AHPETC's reponses.