The Workers' Party (WP) is girding for battle over its town council's financial woes, with its chairman Sylvia Lim saying last Wednesday that she was sure it would come up during the election campaign.
The party has in recent months taken steps to put things right at its Aljunied-Hougang-Punggol East Town Council or AHPETC. It met two deadlines - in June and August - set by the Ministry of National Development (MND) for the submission of overdue audited accounts for financial years 2013/2014 and 2014/2015. It hired external accountants to help strengthen its processes, and took over the running of the town council from former managing agent FM Solutions and Services (FMSS) after its contract with the town council ended.
In an open letter to residents in June, Ms Lim pledged to "keep costs down" and protect the town council's long-term financial interests.
Just yesterday, MND said in a statement it has found, after an ad-hoc review by the Accounting and Corporate Regulatory Authority (ACRA) of FMSS' auditor, Teo Liang Chye & Co, that FMSS has been "grossly profiteering off its sole client", AHPETC.
MND said that in FY13/14, while AHPETC suffered an operating deficit of $2 million, FMSS made a net after-tax profit of $2 million, after paying its directors/shareholders fees and salaries of $1.14 million.
And within the WP's own ranks, some members have privately expressed concern. Speaking to Insight on condition of anonymity, two of them say it has heightened tensions in the party, and caused a falling-out between some WP Members of Parliament and FMSS.
The company's owners, as key officials of AHPETC, had signed cheques to their own company. The Auditor-General's Office flagged these related-party transactions as serious lapses after a year-long audit of the town council.
Seizing on this, People's Action Party ministers and MPs have piled on the pressure for AHPETC to order a forensic audit of FMSS' accounts, saying that WP MPs have a duty to find out if any public funds were lost.
MND has also applied to the High Court to appoint independent accountants to AHPETC. Besides safeguarding government grants to be given to the town council, it wants the accountants to be empowered to look deeper into the town council's books. The application was rejected by the High Court and the ministry is appealing.
FMSS and AHPETC have not spoken up together in a joint statement thus far. When the town council's contract with FMSS ended last month, the company decided not to continue as a managing agent, Ms Lim has revealed to Insight. Asked if the financial issues had affected relations and led to FMSS not wanting to continue, Ms Lim says: "I'd rather not go into (their reasons) because... I don't think I can speak for them."
She adds that all of WP's MPs supported the decision for the party to manage the town council on its own, without a managing agent.
Meanwhile, WP MPs have pointed to cleaned void decks, manicured fields and lifts that work in estates managed by AHPETC, to show that things are running fine. The party has not short-changed residents when taking care of their neighbourhoods, Non-Constituency MP Gerald Giam said at a recent forum, adding: "They will tell you that in terms of estate maintenance, cleanliness - the issues that really matter to them - we have done comparably well to any other town council."
The opposition party has its supporters, who say the WP is running the town council of a GRC for the first time and should be cut some slack.
WP leaders have said they were disadvantaged from the start, when the PAP pulled the plug on a software it had created to keep track of town council accounts. Ms Lim and WP leader Low Thia Khiang have pointed to these handover issues as reasons for the town council's woes.
But for the coming polls, the WP is banking on residents caring more about other aspects of town council management such as cleanliness and general upkeep of the estate, where it believes it has been performing up to the mark.
One such resident is research assistant Vincent Chua, 24, from Hougang, who says that despite the team being new at their job, the town has been run well.
He adds of the financial troubles: "I won't say it's mismanagement, just mistakes. The void decks are clean and I think our estate is all right. Plus the town council has written to residents to explain; I have read it and appreciate them going into details."
