Town councils will have to hire auditors to look into their processes and impose term limits for committee chairmen who oversee areas like finance, audit and risk management.
They will also have to ensure they have sufficient resources to support their goals over a five-to 10-year period, according to a new code of governance launched by the Ministry of National Development (MND) yesterday.
The new code for the 16 town councils here will kick in next April. It stems from sweeping changes to the Town Councils Act in March 2017 which seek to hold them to a higher set of standards.
An MND spokesman said the new code "goes beyond the legislative requirements, and covers best practices that will guide town councils to achieve a higher level of governance over time".
It covers four domains: council effectiveness, internal controls and processes, financial management, and vendor management.
One major change is that town councils must establish an auditing team to "provide an independent and objective assessment of the effectiveness of internal controls and procedures".
The town councils are expected to comply with the guidelines and MND has issued a checklist which they are to submit annually. The first declaration for the 2020 financial year is due in September 2021.
The ministry worked with Ernst & Young Advisory as well as an advisory panel to draft the new code. The councils were also consulted.
For example, the new term limits for some committee chairmen were influenced by similar guidelines for board members of charities, said Mr Tang Chee Charn, executive director at Colliers International and a member of the MND's advisory panel for the code.
Ernst & Young Advisory's Mr Benjamin Chiang emphasised that it is up to individual town councils to evaluate whether it is feasible to adopt some of the guidelines.
Dr Teo Ho Pin, who oversees the People's Action Party town councils, said the ruling party has its own code. Coupled with existing laws, "we are complying substantially with the new code of governance".
However, most town councils would have to reorganise their existing committees and form a new audit committee with experienced councillors, he said.
Workers' Party chief Pritam Singh said Aljunied-Hougang, the only opposition-held town council, was consulted on the code and it had given its feedback.
The guidelines cap the changes to the Town Council Act, whose review was first mooted in 2013 and came about after heated parliamentary debates on the running of town councils and the handover of Aljunied GRC, which the WP took over from the PAP after the 2011 polls. Several Aljunied-Hougang town councillors, including three WP MPs, are embroiled in two multimillion-dollar lawsuits over alleged improper payments to its managing agent.
Separately, in March, former Ang Mo Kio Town Council general manager Wong Chee Meng pleaded guilty to charges of corruption after using his position to influence the outcome of tenders.
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