No assurance that public funds are properly spent: AGO audit of Aljunied-Hougang-Punggol East Town Council

THERE is currently no guarantee that the Aljunied-Hougang-Punggol East Town Council's (AHPETC's) accounts are reliable or that public funds are being properly spent, said the Auditor-General's Office (AGO) on Monday.

Highlighting several lapses in governance by the AHPETC - which is run by the Workers' Party - the AGO said in a report: "Until the weaknesses are addressed, there can be no assurance that AHPETC's accounts are accurate and reliable, or that public funds are properly spent, accounted for and managed."

One major error pertains to AHPETC's failure to transfer monies into the sinking fund bank accounts as required by the Town Councils Financial Rules. These funds cannot be used to pay for daily operating expenses, and must be separately maintained for the long-term maintenance of properties. Transfers are to be made within one month from the end of each quarter.

The AGO report shows that AHPETC failed to make the required transfers to sinking fund bank accounts for the last three quarters of FY2011/12, and that the transfers it made for FY2012/13 were late and under the required amounts. "In most instances, the transfers were only made after auditors' queries," the AGO report noted.

Other key blunders include the inadequate oversight of related party transactions, and not having a system to monitor arrears of conservancy and service charges accurately.

In February 2014, Deputy Prime Minister and Finance Minister Tharman Shanmugaratnam had directed the Auditor-General to conduct an audit of AHPETC's FY2012/13 accounts. This was after its auditors, Foo Kon Tan Grant Thornton LLP, failed to give the town council a clean bill of health for the second year running.

In response to the AGO report, the Ministry of Finance (MOF) and the Ministry of National Development (MND) said in a joint statement that Minister for National Development Khaw Boon Wan will be moving a motion on the report at Thursday's (Feb 12) Parliament sitting.

Said MOF and MND: "As stewards of public funds, all Town Councils must keep proper accounts and records, and ensure adequate control over their assets. The observations in AHPETC's Auditor's Report raised serious questions about the reliability and accuracy of its financial and accounting systems."