SINGAPORE - In a small set-up like FM Solution and Services (FMSS), which is the managing agent of the Workers' Party town council, it is inevitable for the directors of the company to be also holding key positions in the town council.
Chairman of Aljunied-Hougang-Punggol East Town Council (AHPETC) Sylvia Lim said this in Parliament yesterday, as she addressed one of the major lapses the Auditor-General's Office found in its audit of the town council's accounts.
The AGO said in its report made public on Monday that the town council had not properly managed conflicts of interest in $25.9 million worth of transactions between FMSS and AHPETC.
These conflicts had arisen as the town council's senior officers - secretary Danny Loh Chong Meng, general manager How Weng Fan and deputy general managers Yeo Soon Fei and Johnson Lieow Chong Sern - also had ownership stakes in FMSS.
Ms Lim said on Thursday that wrong impressions had been created by media reports that "the town council secretary and its general manager...are freely being given contracts without tender and paying themselves handsomely without accountability".
Proceeding to debunk the impressions, she said that the town council's managing agent did not have the power to award itself contracts, nor was it involved in evaluating the tenders it participated in.
Tenders called by AHPETC are awarded by a tender and contracts committee consisting of Members of Parliament and appointed councillors, said Ms Lim.
She also said that when FMSS over-charged AHPETC for lift rescue and maintenance services, it had not been intentional.
Among areas of concern the AGO flagged was a contract for lift services that FMSS was awarded in 2012. AHPETC had not called a tender for it, citing time constraints, and had set up a committee of four town councillors to assess the fee proposed by FMSS.
But while FMSS promised to charge rates similar to those of former contractors, it quoted a fee 30 per cent higher. As a result, AHPETC ended up overpaying for the service, AGO said.
Ms Lim said on Thursday that the mistake had happened as FMSS had "used the wrong unit multiplier" to compute prices.
"There was absolutely no intention on the part of the committee nor the contractor to approve higher payment rates," she said.
A sum of about $122,000 has since been returned to the town council by FMSS, she added.
She said: "Why did the error occur? I bear personal responsibility as I was chair of the evaluation committee. Despite the urgency of the matter, I should have ensured that the former contractor's invoices were cited for comparison before the committee accepted the pricing proposal and obtained the town council's approval. That said, the error was not deliberate."