Ministry of National Development (MND) has announced that it is deeply concerned with the latest findings in the KPMG report on its review of past payments made by the former Aljunied-Hougang-Punggol-East Town Council (AHPETC) .
MND stated that the report found serious legal and other regulatory breaches, and improper payments made from Town Council funds running into millions of dollars and also identified the possibility of criminal conduct.
“These findings by KPMG are serious. There has been a significant loss of public monies,” it wrote.
The report, entitled “Report on Improper Payments” pointed out that the direct owners of two companies, FM Solutions and Services (FMSS) and FM Solutions and Integrated Services (FMSI) were appointed as its managing agent, as well as providers of essential maintenance services, they also held key management and financial control positions in the town council at the same time. Resulting in a conflict of interest as they were the ones who approved the work orders and payment orders.
MND said that to protect residents’ interests, steps must be taken to recover the monies which have been lost, and to ensure that those who acted wrongfully are held to account.
It also noted that Housing and Development Board (HDB) has, today (4 November), sent a letter to Aljunied-Hougang Town Council (AHTC), asking it to confirm that it will appoint a suitable third party to take steps, on the Town Council’s behalf, to recover the monies which have been lost, including, where necessary, legal actions.
MND also stated that the Government is also considering what other steps are necessary in view of the concerns highlighted by KPMG, in relation to the way some of the Town Councillors have behaved, in dealing with public funds.
KMPG had listed in its report, a total of around, $23.3 million worth of work orders were approved by town council members with a conflict of interest. It also listed work orders worth around $1.5 million that were gauged as improper payment which were also approved by the same town council members, and pointed that around $600,000 ought to be recovered.
However, AHTC pointed out that while some payments have been deemed to be made improperly by KPMG, the payments do not appear to have an effect on the legitimacy of the underlying payments, hence, may not necessarily be recoverable.