All 17 Town Councils had unqualified financial statements for FY2020: MND

The report is meant to provide residents with objective information about these key areas of estate management. ST PHOTO: CHONG JUN LIANG

SINGAPORE - All 17 town councils had unqualified financial statements for the financial year of 2020, said the Ministry of National Development (MND).

This means that auditors have concluded that the financial affairs of each of the town councils here had been presented fairly in all material aspects. FY2020 was from April 2020 to March last year.

However, six town councils flagged areas of non-compliance to a corporate governance checklist that they had to submit to MND to ensure they meet governance standards.

Aljunied-Hougang Town Council (AHTC) and Sengkang Town Council (SKTC) said they did not inform the National Development Minister of changes in key personnel within 30 days as required. SKTC also did not publicise the key appointments within 30 days.

AHTC explained that there were many changes to its committee and council members after the 2020 General Election, and the majority of its submission had been completed and submitted within the stipulated timeline.

“However, there was a late submission for the appointment of chairpersons of committee to MND/HDB as the town council required more time to seek confirmation, and to ensure proper acceptance and endorsements before final submission to MND/HDB.”

The town council has since appointed a compliance manager in February last year to oversee such issues, it said. 

SKTC said its late notification to MND was a one-off during the care-taking period by Pasir Ris-Punggol Town Council (PRPGTC) and Ang Mo Kio Town Council (AMKTC), as were the late publication of notices on the appointments.

Notification and publication of subsequent appointments were made on time, it added.

Jurong-Clementi Town Council (JRTC) flagged two instances where it had allocated monies incorrectly to commercial property instead of residential property – once involving carpark surplus funds, and once for grants meant for lift replacements.

It added that some of the town council’s investments also did not undergo the required authorisation due to first-time administrative oversight, and that they were retrospectively tabled for approval upon detection by JRTC management.

These findings have been rectified and additional processes have since been put in place to prevent re-occurrence, said JRTC.

AMKTC flagged an instance when it made a correct funds transfer but allocated to the wrong property type. The corrected financial statement was resubmitted for compliance.

Bishan-Toa Payoh Town Council declared one instance of a delay in fund transfer. A goods and services tax subvention grant transfer was made on Sept 8, 2020, when it had been due on July 31 that year.

PRPGTC said there was a late application for the minister’s approval to carry out improvement work on non-common property, adding that it has since reviewed its processes in this area.

MND said in a statement on Tuesday (Feb 22) that it has presented the audited financial statements of the 17 town councils for FY2020 to Parliament, and the town councils will be publishing them on their websites.

There will be no Town Council Management Report (TCMR) for FY2020, as announced last year, in view of the electoral boundary changes that followed the general election in 2020 and disruptions due to the circuit breaker period, the ministry added.

The annual report grades town councils according to five areas: estate cleanliness, estate maintenance, lift performance, service and conservancy charges arrears management, and corporate governance. It is meant to provide residents with objective information about these key areas of estate management.

"The suspension also allows for clear accountability of the results when the TCMR assessment resumes from FY2021," it added.

Instead, the next TCMR, for FY2021, will be published in two separate reports later this year. This will be for the period from April 2021 to March 2022.

In May or June, MND will put out a report on town councils' performance for the operational indicators of estate cleanliness, estate maintenance, lift performance, and service and conservancy charges arrears management.

In November or December, there will be a report reflecting the 17 town councils' performance in regulatory compliance and financial reporting, it added.

While there was no TCMR assessment for FY2020, town councils were still required to submit their declaration of compliance with regulatory requirements using a revised checklist, said MND.

The scope of the checklist had been enhanced to include new requirements from amendments to the Town Council Act in 2017, such as the need to notify the ministry and the public of changes in town councils' key appointment holders and officers within 30 days of the effective date.

From FY2021, town councils' corporate governance will also come under closer scrutiny, as their performance will be assessed by the severity of non-compliances, rather than the number of issues raised.

"Observations will be assigned points based on severity levels, and the town councils' banding will be based on the total number of points they accumulate," said MND.

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