THE Workers' Party has defended its failure to submit its audited financial statements in time for the Ministry of National Development's annual appraisal of the 15 town councils.

Its auditors are "still in the midst" of finalising its statements, party chairman Sylvia Lim said in a media statement on Thursday.

The WP-run Aljunied-Hougang-Punggol East Town Council (AHPETC) received a "pending" grade for the corporate governance indicator in the report, published earlier on Thursday, for the second consecutive year.

The other 14 town councils received the top score, green, for corporate governance. This indicator measures compliance with the law in announcing and awarding tenders, for example.

The AHPETC's auditors were appointed in May, said Ms Lim, who is also an MP for Aljunied GRC.

"We understand that the issues being addressed (by the auditors) include complexities resulting from the handover legacy, classification and treatment issues, year-end adjustments, and others," she wrote, adding that the town council hoped that the audit would be completed soon.

Last year, the WP said that it failed to submit its auditor's letter in time because of a delay created by the town council's migration to new IT software.

The old vendor, a company run by the People's Action Party, terminated its services when the WP took over the town council, she said.

This charge led to a protracted exchange of accusations between the PAP and the WP over conflicts of interest in close ties that political parties have with the vendors and companies that their town councils hire.

On the management of service and conservancy charges arrears, where AHPETC was one of two town councils not to receive the top score of green, Ms Lim said that it has stepped up efforts, including court prosecution, where other efforts have failed.

It has also allowed some residents to pay their arrears in installments, she said, adding that "improving the situation is an ongoing process and will take time to effect."

Potong Pasir Town Council, chaired by PAP MP Sitoh Yih Pin, was the other. It received an amber grade, which connotes a medium score.

Mr Sitoh said that collection of arrears from residents in financial difficulty is a "delicate and sensitive matter that will take time to resolve."

It is Potong Pasir's second consecutive "amber" grade in this category under his watch, but Mr Sitoh said that it is not his top priority to get a green grade.

He is focused on raising funds from external sources to complete much-needed maintenance works in Potong Pasir, such as re-wiring and re-roofing works, he said.