KPMG found no duplicate or fictitious payments through the use of dummy code in AHTC’s payments

The Aljunied-Hougang Town Council (AHTC) has submitted to the Housing and Development Board (HDB) on 18 August, its fifth monthly progress report issued by its auditor KPMG to AHTC. (click here for the full report)

This report was issued in accordance with the Court of Appeal judgment in Attorney General vs. AHPETC (Civil Appeal No. 114 of 2015)(“the Judgment”).

AHTC is managed by Workers’ Party (WP)

AHTC wrote that since the July 2016 monthly report, KPMG has completed its checks of all payments made by AHTC through the use of “dummy” vendor codes amounting to $271,598.20.

AHTC said that it accepts the control shortcomings in the use of these codes and will be reviewing its processes to ensure their proper use in future.

AHTC notes KPMG’s findings that no duplicate or fictitious payments have been found with respect to its checks on AHTC’s use of dummy vendor codes, and that all payments were supported by documentation.

Extract from page 6 of report, para A.3.2:

In our July 2016 Report, we noted that AHTC’s use of the “dummy” vendor code made it “easier for duplicate payments or fictitious payments to be made without being detected.” We subsequently reviewed all of the 207 payments recorded using the “dummy” one-time supplier code totalling SGD271,598.20 for duplicate or fictitious payments and found none. The payments were supported by documentation relating to purchase and receipt of the goods and/or services.

KPMG noted that AHTC has made the sinking fund payment for Q1 FY2016/17 within the time period required of all Town Councils under the Town Councils Act.

summary of FR
KPMG’s finding in the July Report

WP attacked in July for report on “dummy” supplier code

Earlier in KPMG’s July 2016 Report, it noted that one of AHTC’s procurement policies allows the use of a “dummy” supplier code (“Supplier (One Time)”), for refunds of tender deposits and for other purposes. The value of transactions using this dummy supplier code since its creation in 2015, totalling SGD271,598.20, of which SGD33,170.00 relates to refunds of tender deposits.

After the report was released, individuals such as the Minister of Law and Home Affairs, K Shanmugan lambasted the Workers’ Party on the matter.

He wrote on his Facebook, “The rot is at the top. This should come as no surprise. The High Court and the Court of Appeal have already criticised Ms Sylvia Lim and Mr Pritam Singh for suppressing the truth (designed to mislead) both in Parliament and in Court. To them, the truth is a tradable commodity. I will say more about this in another post.”

The minister also wrote that AHTC’s lapses were found by their auditors to be not isolated, but rather “pervasive” and “systemic”.

The minister used harsh words by saying, “KPMG said that AHTC used highly irregular shortcuts to process millions of dollars in payments to related parties, and “suppliers”. It used “dummy” vendor codes for payments, without specifying who the suppliers were. These practices could have concealed duplicate or fraudulent payments. Obviously, WP’s leadership thought they could play Aljunied residents – and Singaporeans — for dummies.”