The independent accountant appointed by the Workers' Party-run Aljunied-Hougang Town Council (AHTC) has started reviewing past payments made by the town council to determine if they were improper.
Audit firm KPMG said in its third monthly report on the town council that it will study AHTC's accounting records for the period of May 27, 2011 to Nov 27 last year for the review. The records contain 6,738,319 entries.
AHTC chairman Pritam Singh on Wednesday said his town council has given KPMG specific instructions to identify all transactions involving its former managing agent companies - FM Solutions and Services and FM Solutions and Integrated Services.
He added that the town council had submitted the 32-page report to the Housing Board on Wednesday, as required by the Court of Appeal.
The apex court had directed AHTC to appoint a Big Four accounting firm to help fix governance and financial lapses at the town council, and ensure compliance with the laws.
This came in the wake of a special audit by the Auditor-General of the town council's finances.
So far, AHTC has resolved three out of 17 lapses that were still outstanding when KPMG was hired in March. In its latest report, KPMG highlighted one lapse that was recently fixed.
It said the town council had implemented a process to monitor, investigate and address differences between bank statements and its accounting records.
Steps were also taken by the town council to fix other lapses, the report said.
For instance, the town council has started monitoring and investigating the flow of funds in and out of its temporary clearing accounts, which are used for transactions with external parties.
It has also corrected a duplicate transfer of $157,141.01 to its sinking fund, which was highlighted in the previous progress report.
KPMG said it is in the process of verifying AHTC's calculation of how much it transferred to its sinking fund for financial years 2011/2012 to 2013/2014. AHTC said it had transferred $50,176,747.
KPMG also pointed out several issues it had observed since it put out the last report last month.
It found that data for service and conservancy charges (S&CC) arrears could not be fully generated automatically, even though AHTC said its system was capable of doing so.
In addition, S&CC data for April was incorrectly extracted from a May report, resulting in an understatement of $11,400.22 due for collection.
KPMG said AHTC will have to perform a detailed test to make sure its system works properly.
It added that it had also looked into the 13 unresolved opening balances of AHTC's accounts that have been flagged by the town council's own auditors over the years.
The town council has said in the past that these issues were the reason its accounts have not been given a clean bill of health.
KPMG said 10 of these issues can be resolved by adjusting entries that were incorrectly posted.
Of the remaining three issues, two have to do with related-party transactions and one has to do with the town council's financial statements from FY 2011/2012, said KPMG.
AHTC has provided a list of entries to be adjusted, and KPMG has asked for the supporting documents.