Auditors unable to fully verify AHPETC accounts for second year; MND concerned

The Ministry of National Development has expressed concern that independent auditors have been unable to fully verify Aljunied-Hougang-Punggol East Town Council's (AHPETC) accounts for the second year in a row. -- ST FILE PHOTO: DESMOND WEE
The WP town council will seek the court's decision on the accountant who will manage its finances. ST FILE PHOTO

The Ministry of National Development has expressed concern that independent auditors have been unable to fully verify Aljunied-Hougang-Punggol East Town Council's (AHPETC) accounts for the second year in a row.

In a press statement on Thursday, the ministry noted that the town council had not complied with some provisions of the Town Councils Act and the Town Councils Financial Rules, as reported by the independent auditor.

The Workers Party-run town council has not been setting aside conservancy and service charges to the bank account of a sinking fund for the maintenance of the estate, the auditor's report noted. This is mandatory under a section of the Town Councils Financial Rules.

The auditors had also not been given details of project management service fees the town council had paid to a related party. These are transactions where the town council's key management personnel have a personal financial interest.

Furthermore, the auditors were also unable to determine the validity and accuracy of various items in AHPETC's accounts. These included receivables of some $1.8 million and some $20 million worth of lift repair and lift upgrading expenses.

There were also unexplained differences of good and service tax payable of some $518,000 and unreconciled differences of some $63,000 in cash and bank balances.

AHPETC had only submitted its audited financial statement for the financial year ended March 31 2013 on Monday, six months later than the Aug 31 deadline.

In its report, the independent auditor - Foo Kon Tan Grant Thornton LLP - said that it was "not able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion".

As such, it could only give a "qualified opinion" on these matters, which means that the information within may not be complete.

Acknowledging these issues, AHPETC chairman Sylvia Lim said in the town council annual report that preparing the financial statements "continued to be a challenge" because of "handover issues that required more time to resolve".

The annual report has been presented to Parliament. The Workers' Party formally took over the running of the Aljunied Town Council from the People's Action Party in August 2011.

Ms Lim added: "We had to develop our own financial system within a short span of time. Needless to say, there are systemic and structural problems which had to be resolved."

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