SINGAPORE - Appointing independent accountants to safeguard government grants at the Workers' Party-run town council will allow residents there to continue benefiting from such grants, Deputy Prime Minister Teo Chee Hean said on Saturday.

His comments come a day after the Ministry of National Development (MND) asked the High Court to appoint independent accountants to oversee government grants at the Aljunied-Hougang-Punggol East Town Council (AHPETC), where accounting and governance lapses were found after a special audit that ended earlier this year.

"There are a lot of unanswered questions and the MND does want to make sure that the residents continue to enjoy the benefits of the grants that MND is giving to every town council," said Mr Teo, who is also Home Affairs Minister and Coordinating Minister for National Security.

"And I think this is one way in which MND can continue to give grants but in a way which safeguards public funds," he told reporters on the sidelines of a recruitment drive organised for heartland merchants at Rivervale Mall in Sengkang.

"I think it's a fair way of doing so, and I hope the town council accepts it."

AHPETC, the only opposition-run town council in Singapore, came under the spotlight in February after an audit by the Auditor-General's Office found problems in accounting, governance and compliance.

During a debate in Parliament on these lapses, National Development Minister Khaw Boon Wan had said his ministry would withhold grants until "AHPETC cleans up the mess". The grants amount to $7 million each for FY2014 and FY2015.

On Friday, however, the MND said it would release these funds to the town council provided the Court agreed to appoint independent accountants to safeguard the use of the grants.

If the Court application is allowed, AHPETC must keep the government grants in segregated accounts, and any payments above $20,000 from these accounts must be co-signed by the independent accountants.