SINGAPORE - The ball is now in the Workers' Party's court to "set things right" after lapses were uncovered by the Auditor-General's Office (AGO) in its audit of the only WP-run Town Council, said Law Minister K Shanmugam on Sunday.

Parliament earlier this week passed a motion noting with concern the AGO's report on the Aljunied- Hougang-Punggol East Town Council's (AHPETC) accounts.

This, after a lively two-day debate during which Mr Shanmugam charged that money had been lost by AHPETC through overcharging by its managing agent.

In failing to either probe this or exercise oversight over its staff who owned the managing agent, the WP MPs have "unlawfully" breached their fiduciary duties to protect the financial interests of residents, he said in Parliament.

Speaking to reporters on the sidelines of a Chong Pang community event on Sunday morning, he said: "Everyone voted for it, including WP Members of Parliament, so they accept that things are seriously wrong."

"What concerns me is that the actions are clearly unlawful, but in Parliament, having accepted in theory the report, we were inundated with minutiae about how the safekeeping is going to be made better, how there are going to be two locks and so on. The big questions remain unanswered: Why did you hide info from your own auditors? ...What are you going to do to recover monies that have been lost?"

He added that the Government will wait to see WP's response before considering any further action.

"There will have to be consequences, we have to see what they do to recover lost money," he said. "One consequence is obviously that the (Town Council) Act has to be amended. While there is self-regulation, there has got to be I think more oversight. At the same time there will have to be other consequences.

"As (National Development) Minister Khaw (Boon Wan) has said, you know, we'll have to see...We want to see what action is going to be taken to set things right."