There has been much news about the Ministry of National Development taking the opposition-run Aljunied-Hougang-Punggol East Town Council (AHPETC) to court to seek approval to override the mandate of the elected Members of Parliament and appoint ‘independent’ auditors to oversee future payments done by the town council. The Workers’ Party-run town council is suspicious of this blatant encroachment into the running of its town council.
The Workers’ Party (WP) also deemed the government’s choice of PricewaterhouseCoopers (PwC) to serve as auditors for the town council as inappropriate because this is the same accounting firm that had flagged major lapses in the town council’s records and that there is a potential conflict of interest.
AHPETC also mentioned that during the audit of the town council, there were disagreements with PwC and this may cause bias in the way PwC tries to handle the functioning of the town council in future.
The WP-run town council did not object to the government wanting to appoint auditors. It merely wants the auditors to be truly independent.
Let’s look into the another aspect of AHPETC’s running of the town council that the PAP always brings up – the rates paid to the managing agent, FM Solution and Services (FMSS). PAP alleged that WP has lost millions of dollars and all this money has gone into the pockets of WP’s friends at FMSS.
However, to date, the PAP has yet to produce convincing evidence for this allegation. The issue of paying their managing agent higher is not as scary as some imagine. Aljunied GRC has always (even under PAP) paid unusually high rates. It has always had expensive managing agents.
Moreover, the high rates paid by AHPETC to the managing could have occurred as a result of a lack of competing bids. No town council managing agent wanted to work for WP’s town council even when a tender was called.
Furthermore, the rates paid to FMSS were still legal and no law was broken by simply paying the managing agent those rates. Hence, the PAP can at most claim that it is morally wrong. Under the Town Councils Act, a town council member can be awarded a contract as long as he discloses his interest and recuses himself from voting. Thereafter, the others can award the contract to him.
For years, the PAP has been awarding contracts to their members and former members, in addition to grassroots leaders’ businesses. EM Services and Action Information Management (AIM) are just a few examples. In the case of the PAP, since they have greater political dominance, members of one town council can make bids at other PAP town councils, or they can just award the contract to grassroots members. Thus, the issue isn’t about conflicts of interest. The PAP is also guilty of such things. But it’s all legally accepted so neither the PAP nor the WP can be blamed for that.
AHPETC is short of $14 million of grants that the government was supposed to give them. In February 2015, Minister Khaw Boon Wan who is also the PAP chairman, said that the government will withhold $7 million of grants and amend the town councils act. But only this week, a report in the mainstream media said that with $14 million of government grants being withheld, AHPETC is “technically insolvent“.
Government grants are supposed to be given annually. Why is 2 years’ worth of grants being withheld from AHPETC?
AHPETC’s own auditors gave a report that they could not verify the exact state of their books. Then when Auditor General’s Office (AGO) went to look at their books to find signs of wrongdoing but couldn’t find any. All they found was that some processes were not standard, like getting 3 quotes.
On what basis are the grants being withheld? If you don’t like the processes, are those grounds justifiable? Or is MND making this up as they go along, much like what MDA did with The Real Singapore?
There is no precedent for withholding town council grants which are essentially taxpayers’ monies. Nor is there a precedent for forcing the government’s accountants on a town council that has been competently providing services to the residents for the last 4 years with few complaints being made about the cleanliness of the town or services like maintenance of common facilities.
Are grants being withdrawn just to cripple the WP-run town council?
The PAP is playing up the bogeyman that AHPETC is insolvent and will have no money by June. They are probably hoping that it will instigate residents in Aljunied, Hougang and Punggol East to rise up as a collective mass and condemn the WP.
But it is clear for most residents that the WP-run town council would not have become insolvent if not for the PAP withdrawing 2 years’ worth of government grants. This is a problem created by the PAP, so it is pointless to condemn the WP which is even now trying to think of ways to solve the problem and serve their residents rather than complain about the injustice inflicted upon them.