National Development Minister Lawrence Wong said on Sunday (July 24) that changes to the law on Town Councils Act to ensure public funds are managed properly can be expected by the end of the year.
The changes will, among other things, ensure that town councils have a “proper governance structure,” he told reporters after a ministerial visit to Kebun Baru ward in Nee Soon GRC.
Mr Wong was responding to reporters’ questions on what his ministry was doing after a report by independent auditor KPMG last week which indicated “pervasive” control failures in AHTC’s accounts and processes.
Mr Wong said to reporters, “So all the more I think these findings by the auditor give us impetus to make sure the Town Council Act will be amended, so that we can have a proper governance structure over the town councils.”
“The legislative changes are already being studied and are being finalised and we hope to make them by the end of the year,” he added.
Mr Wong said he awaited AHTC’s response to the auditor’s findings which were “a very serious matter.”
“Clearly there are very serious lapses surfacing, and we will continue to await further recommendations from the auditor and we will monitor the matter very closely.”
“This is not the end of KPMG’s findings because there are still more studies and reviews to be done, including the issue of past payments and whether they have been made properly,” he said.
Earlier on Friday, Chairman of AHTC, Pritam Singh said in response to comments about the audit report, that the review of Past Payments is still ongoing and a full report is expected to be released by KPMG to AHTC at the end of August 2016 and added that “it is not helpful to speculate or jump the gun.”
Mr Singh assured the public that AHTC will publish the Past Payments Report, like all previous KPMG reports for scrutiny in full, and that the town council will take any necessary action thereafter
In 27 May 2015, the High Court ruled that Ministry of National Development (MND) failed to establish legal bases for its court application to appoint the independent accountants to the town council.
MND had earlier applied to the court on March 20 2015, to appoint independent accountants to AHPETC for the said purpose of safeguarding government. MND had also withheld grants saying that there were lapses in financial governance in the former AHPETC as stated in its own audited financial reports and via a special Auditor- General’s Office report made public last year.
Quoting from the speech made by the then Minister for National Development, Mr Dhanabalan, Justice Loh noted that the principle of his message on the Town Council Act (TCA) is that residents must live with the choices made by their town councils. But he cautioned that it should not be construed as an indication that a town council can breach the duties imposed on it by the TCA with impunity.
Even though the High Court had ruled in favor of the town council, but under the conditions by MND to release funds for the town council, the AHTC (then AHPETC) still had to appoint auditors from the big four accounting firms in Singapore.
Although the town council originally declined to appoint its auditor from the list but subsequently complied in order to obtain the funds that were withheld from it. KPMG was appointed in March this year to audit its accounts.
