Changes proposed to ensure town councils meet higher standards

Under the proposed amendments, the Ministry of National Development will be able to appoint inspectors to investigate town councils that have flouted regulations, and issue an order to specify remedial action.
Under the proposed amendments, the Ministry of National Development will be able to appoint inspectors to investigate town councils that have flouted regulations, and issue an order to specify remedial action. ST PHOTO: KUA CHEE SIONG

Move to improve governance and transparency, and give MND greater oversight

Town councils will have to adhere to higher standards of transparency and governance, under wide-ranging changes proposed by the Government in its bid for greater oversight over town councils.

Under proposed amendments to the Town Councils Act, town councils will have to submit audited financial reports within six months of the financial year ending, and must keep a registry of disclosures on conflicts of interest by staff, among other things. Those that do not comply can be fined.

A code of governance will also be drafted later this year that will set out standards that town councils have to adhere to.

The changes, tabled in Parliament yesterday by Senior Minister of State for National Development Desmond Lee, are meant to clarify town councils' roles, improve governance and strengthen financial management, as well as give the Ministry of National De- velopment (MND) more regulatory oversight.

They come after a review of town councils, first announced in 2013 following a heated debate in Parliament between the Government and its Members of Parliament, and those from the Workers' Party (WP), on the running of town councils and the handover in Aljunied GRC after the 2011 election.

  • Other key changes proposed

  • 1. Town councils cannot carry out commercial activities that are inconsistent with their statutory functions, such as operating a pasar malam, or night market. Those that flout this rule can be fined $5,000.

    2. Town councils cannot hamper the Housing Board and other public agencies from doing work in HDB estates. For instance, they have to allow public agencies to carry out upgrading works.

    3. The Ministry of National Development (MND) can direct town councils to help during public emergencies, for example, granting access to facilities for emergency- related purposes.

    4. MND and the public must be notified of any changes to key town council officers within 30 days. The town council would also have to inform residents by putting up public notices in the estate and online.

    Key appointments requiring such notice include the chairman, vice-chairmen, town councillors, chairmen of key town council committees, town council secretary, general manager and finance manager.

    Currently, town councils must publish a notice in the Government Gazette to announce such changes "as soon as it is practicable".

    5. Town councils will have to prepare and submit their financial plans. The MND may also require financial projections to be submitted, to instil financial discipline in town councils.

    6. Provisions will be put in place to facilitate the handover of town councils after elections. The MND may make orders to specify handover of assets and information, or prescribe a policy to govern the town councils and their staff in the interim period after elections are called and Members of Parliament step down.

  • Danson Cheong

In 2015, the Auditor-General's Office flagged major governance and financial lapses in the WP-run Aljunied-Hougang-Punggol East Town Council after a special audit. The town council, renamed Aljunied-Hougang Town Council, has failed to submit clean accounts.

Currently, MND has no power to compel town councils to give information on their finances, and there are no penalties if a town council refuses to do so.

But under the amendments, the ministry will be able to appoint inspectors to investigate town councils that have flouted regulations, and issue an order to specify remedial action, among other things.

Town councils can be fined for not complying, and if key decision makers have been found liable, they, too, can be taken to task.

For instance, key town council officers can be fined up to $5,000 or jailed for up to a year, or both.

The MND said the fines and penalties have been benchmarked against the Charities Act, since both town councils and charities are run autonomously, manage public funds and consist of volunteers.

Another key change is aimed at reducing conflicts of interest within town councils. The shareholders and executive decision-makers of the town council's auditor and managing agent can no longer be appointed town councillors.

They will also be barred from holding the key posts of town council secretary, general manager and finance manager.

MPs will debate the amendment Bill after the Budget debate.

First introduced in 1989, town councils were set up to give MPs the authority and responsibility to take charge of their constituents' estate.

MPs would also be directly accountable to their voters, who could take into account how they fared in running the town councils.

National University of Singapore real estate professor Yu Shi Ming said the proposed changes were "very substantial" and would require town councillors to meet similar standards of transparency and disclosure as people who sit on the boards of companies or statutory boards.

"It is a good thing, it elevates the significance of the role town councils play," he said.

A version of this article appeared in the print edition of The Straits Times on February 07, 2017, with the headline 'Changes proposed to ensure town councils meet higher standards'. Print Edition | Subscribe