Firms appointed to manage Worker's Party-run town council's books, but these steps 'inadequate': MND

SINGAPORE - Two external companies have been appointed by the Aljunied-Hougang-Punggol East Town Council (AHPETC) to manage its finances, but the Ministry of National Development (MND) said in court on Monday that this was a "lukewarm assurance".

The companies are Audit Alliance, which will perform audits on the town council's past accounts, and Business Assurance LLP, which will act as its financial consultant.

But Attorney-General's Chambers deputy chief counsel for litigation Aurill Kam, who is arguing the ministry's case in a hearing on whether independent accountants should be appointed to oversee government grants given to the town council, described these steps as "inadequate" and a "lukewarm assurance".

She noted during a High Court hearing on Monday that Business Assurance was registered only one year ago and had "no track record" of dealing with matters pertaining to town councils.

It also has no prior experience in advising on internal controls, nor a good understanding of systems governing town councils, she added.

Also, the company would not look at related-party transactions or whether any money was lost, she said.

"We need to take a step back and look at the situation. There is no evidence that the defendants had sought to secure help from professionals with the appropriate track record," she said.

In arguing for the urgent granting of a court order for the ministry to appoint independent accountants for the town council, Ms Kam said there was no duplication in the job scope among the respective parties.

"Even if their auditors complete their work in June or August, which is what we understand the estimated timeline to be, even if completed it's not going to shed light on any unlawful payments, breach of duty or unlawful conduct," she explained.

Town council chairman Sylvia Lim, who is also Workers' Party (WP) chairman and an MP for Aljunied GRC, said in a statement last Saturday that the WP-run town council has hired an external accounting firm to help it clean up its past accounts.

The firm will also advise the town council on internal audit matters and how to strengthen its internal controls and processes, added Ms Lim.

The move to appoint an external firm comes after a special audit by the Auditor-General's Office (AGO) found accounting and governance lapses at the town council, including potential conflicts of interest arising from key town council staff being co-owners of its managing agent, FM Solutions and Services.

The case being heard on Monday for the court to appoint independent accountants, was initiated by the ministry, but is opposed by the town council.

If the court agrees to appoint the independent accountants, the ministry will release about $14 million in grants to the town council. These grants are disbursed to all town councils but the ministry has withheld them from AHPETC for a year now owing to governance and compliance lapses.

The MND also wants the independent accountants to examine past town council payments and take appropriate action to recover any losses suffered by the town council and its residents.

Ms Lim had previously told reporters that having independent auditors would "derail" the town council's work, as it would have to deal with several sets of auditors.

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