Aljunied-Hougang Town Council's (AHTC) auditor found it did not comply with the Town Councils Act and Town Councils Financial Rules on several counts in the 2015 financial year, the Ministry of National Development (MND) said yesterday.
Three issues were flagged by AHTC's external auditor of its annual financial statements ending March 2016, it noted.
One was its failure to transfer funds into the sinking fund bank account in a timely manner, as required by Rule 4(2B)(a) of the Town Councils Financial Rules, the ministry said, adding that similar observations had been made by AHTC's auditor for the three preceding financial years.
AHTC also did not ensure that money from the sinking fund was used only for the purposes stated in the rules, the ministry said.
Another issue was the town council's failure to include a debarment statement in its call for quotations and tenders. Such a statement would state that unless there are special reasons, contracts will not be awarded to contractors the Government has suspended from taking on all or that particular type of contract.
Responding to the ministry's statement, AHTC chairman Pritam Singh said last night that the town council has made all outstanding sinking fund transfers "upon the receipt of the withheld government grants in April 2016".
The $4,161.87 which had been incorrectly used from the sinking fund was returned last Dec 14.
"An estate staff had wrongly classified the repair of a resident's leaking ceiling as facade repair works, the latter of which is properly attributable to the sinking fund," he said.
The omission of the debarment statement was an isolated case involving one Invitation To Quote exercise, Mr Singh said. It was given in all subsequent exercises, he added, noting that the clarifications were made known to the ministry through the auditor's detailed observations.
The ministry, in its statement, also said it presented to Parliament AHTC's audited financial statements, as required by law.
The Worker's Party-run AHTC submitted its statements on Feb 24, nearly six months after the Aug 31, 2016 deadline for all town councils. There were several reporting discrepancies, requiring two rounds of amendments before the statements were submitted, MND said.
This is the fifth year in a row that AHTC's statements were qualified by its external auditor, it added.
The auditor issued disclaimers this year in the areas of the town council's opening balances, conservancy and service fees received in advance, payables and accrued expenses, as well as staff costs.
This means the auditor was unable to obtain the necessary evidence to certify the statements as either accurate or inaccurate.
Correction note: This story has been edited to clarify that it was the AHTC auditor who found AHTC broke town council rules. We are sorry for the error.