The Ministry of National Development (MND) has written to Aljunied-Hougang Town Council (AHTC) to seek an explanation on why it has continued to allow Ms Sylvia Lim and Mr Low Thia Khiang to be involved in its financial affairs.

"For good governance, AHTC should take interim measures to safeguard its procurement and payment processes immediately," it said in a statement yesterday. MND wrote to AHTC on Wednesday.

Last month, Parliament voted in favour of a motion that called on Ms Lim and Mr Low to discharge themselves from all financial matters at AHTC.

This followed a High Court verdict in October which found that both MPs had acted dishonestly. The two are challenging the High Court's decision.

Last Saturday, AHTC said in a statement that Ms Lim and Mr Low will not need to recuse themselves from all financial matters. The decision was made at its recent quarterly meeting, where the council voted 17 to 1 against the recusal.

But the ministry said yesterday that until and unless their appeal succeeds, the High Court's findings "remain good and should be taken seriously by AHTC". It added: "In particular, MND remains concerned as to whether the measures implemented under (audit firm) KPMG's guidance are adequate to guard against a recurrence of the past control failures if Ms Lim and Mr Low continue to be involved with AHTC's financial affairs, especially since the adequacy of the measures is entirely dependent on their implementation by the individuals involved with AHTC's financial affairs."

Apart from seeking AHTC's reasons for not requiring the recusal, the ministry also asked whether the town council intends to implement other interim measures or safeguards.

"Upon receiving AHTC's response, MND will further consider whether regulatory action needs to be taken in order to ensure the proper safeguarding of public monies entrusted to town councils," it said.

In a statement last night, AHTC said it would respond to MND by the stipulated deadline of Dec 13.

The town council said it had worked alongside KPMG to resolve control-related issues identified for resolution.

"We thank KPMG for the guidance to improve our control processes, as well as AHTC staff for the long hours put in to facilitate the completion of this rigorous audit exercise."

AHTC also said it had initiated a self-funded internal audit engagement with Baker Tilly Consultancy (Singapore) to improve the rigour of its finance and management processes. "It is thus encouraging to receive news of our improved rating in corporate governance, as it represents the good work carried out in particular by our management team, the finance department, then vice-chairman Png Eng Huat and current vice-chairman Sylvia Lim."

It added: "AHTC notes the rest of the TCMR (Town Council Management Report) and will continue to work hard to improve the safety and living environment of the town."