The Minister for Finance, at the request of the Minister for National Development, has directed the Auditor-General to conduct an audit of the Aljunied-Hougang-Punggol East Town Council (AHPETC)’s FY2012-13 accounts.
In the press statement released by Ministry of National Development (MND) and the Ministry of Finance (MOF), it said that the AHPETC’s auditor, Foo Kon Tan Grant Thornton LLP, had earlier submitted a disclaimer of opinion on AHPETC’s FY2012-13 financial statements, raising 13 issues of concern over the Town Council’s accounts.
The Auditor also issued a qualified opinion on AHPETC’s other legal and regulatory requirements, stating that AHPETC has not complied with the provisions of the Town Councils Act and Financial Rules in various respects.
The ministries said that the observations in the auditor’s report raise serious questions about the reliability and accuracy of AHPETC’s financial and accounting systems and added that this is the second year that the auditor has submitted a disclaimer of opinion on AHPETC’s Financial Statements.
In the letter from the Minister for National Development, Khaw Boon Wan, to Minister for Finance, Tharman Shanmugaratnam, Mr Khaw highlighted four points of concern from the auditor’s report, they are namely;
- Failure to disclose full deatils of fees paid to a Related Party, FM solutions and Services Pte Ltd to auditor
- Failed to transfer $12.46 million in conservancy and service charges to its sinking funds
- AHPETC did not make its latest management accounts and records of minutes subsequent to the end of FY2012-13. As a result, the auditor was unable to ascertain whether AHPETC’s financial statements properly reflected adjustments or disclosures needed in light of such subsequent events
- Auditor unable to determine validity and accuracy for unexplained differences in various items which amounts to a total of $20 million.
In an earlier media release by AHPETC, it explained that there were information gaps that existed at the handover after the General Election 2011 which are not filled till date.
The auditors had unsuccessfully tried to request information from the town council’s former auditors on FY2011.
Repeated attempts by the town council to obtain information from the former Managing Agent (MA) and government authorities, such as asking MND / the Housing and Development Board regarding $1.12 million which the PAP-run Aljunied TC had recorded as receivables from the Citizens Consultative Committees (CCCs) for Town Improvement Projects, did not yield answers.
Attempts by the TC in FY 2012 to get the information were also unsuccessful.
The town council added that the failure to transfer monies to the Sinking Fund after deducting Sinking Fund expenses was an oversight, which has since been rectified and that the oversight did not result in any loss of monies nor unauthorized spending.
In response to the MOF’s instruction for the AGO to conduct an audit, WP’s Aljunied-Hougang-Punggol East Town Council says in a statement on Wednesday that it welcomes the audit and assures the government that the town council will provide its full co-operation on the matter.
Letter from Minister for National Development to Minister for Finance
MND’s letter to Min(F) (18 Feb 14)