Report details 'root causes' of AHTC lapses
KPMG cites shortcomings in WP town council's governance framework, accounting practices
By Charissa Yong, The Sunday Times, 17 Apr 2016
The independent accountants hired by the Aljunied-Hougang Town Council (AHTC) have pinpointed several issues that lie at the root of the town council's governance and financial lapses.
They have to do with the town council's governance framework and policy management, accounting practices, accounting system and capability of its finance department, said KPMG in its first report on the town council's accounts.
The shortcomings in these areas are the "root causes" of the lapses flagged by the town council's own auditors and the Auditor-General's Office in a special audit report in February last year.
Of the 17 lapses which were still outstanding, the town council has fixed two, said the firm.
These and other findings were in the KPMG's report which was submitted on Friday to the Housing Board.
KPMG cites shortcomings in WP town council's governance framework, accounting practices
By Charissa Yong, The Sunday Times, 17 Apr 2016
They have to do with the town council's governance framework and policy management, accounting practices, accounting system and capability of its finance department, said KPMG in its first report on the town council's accounts.
The shortcomings in these areas are the "root causes" of the lapses flagged by the town council's own auditors and the Auditor-General's Office in a special audit report in February last year.
Of the 17 lapses which were still outstanding, the town council has fixed two, said the firm.
These and other findings were in the KPMG's report which was submitted on Friday to the Housing Board.
The Workers' Party-run town council released the report yesterday, saying that it has been progressively implementing measures to address the outstanding issues flagged.
AHTC hired a team of accountants from KPMG last month to look into its books.
This followed a Court of Appeal order in January for the town council to appoint a Big Four accounting firm to establish whether any past payments it made were improper and ensure it complies with the laws.
The apex court also directed the accountants to submit monthly progress reports to HDB.
In the 42-page report, KPMG noted that the "root causes" "are fundamental to... systemic difficulties for AHTC in effectively and efficiently discharging its obligations" under the Town Councils Act and financial rules.
It pointed out that the town council's inability to keep its finance department staff had led to the loss of institutional knowledge and inconsistencies in accounting practices, for instance.
AHTC's use of a dated accounting system, which is no longer supported by vendors, had resulted in its inability to produce reports in the format required for accounting processes, it added.
And due to weaknesses in how related party transactions were approved, work on projects had sometimes started before the go-ahead was given.
The firm also said that the town council had sometimes transferred too little or too much money to its sinking fund, because it did not correctly compute the amounts due.
It recommended measures, such as developing an accounting manual and code of business conduct, to address these "root causes".
But it said: "As our review is still ongoing, these recommendations are preliminary in nature and may be refined in the course of this engagement."
But it said: "As our review is still ongoing, these recommendations are preliminary in nature and may be refined in the course of this engagement."
In a statement posted on the town council's website yesterday, AHTC chairman Pritam Singh said that the town council has agreed, after discussions with KPMG, to implement several measures by July.
They include a policy management process, a governance and internal control framework, guidelines for staff in its finance department and an accounting manual.
The town council also transferred $9.1 million to its sinking funds on Friday, fulfilling its obligations under the court judgment that had set specific deadlines for the transfers to be made, said Mr Singh.
KPMG said the town council had fixed two lapses to do with internal controls and procurement.
It had done so by ensuring that it conducts surprise checks on the cash held at its offices, and by appointing different people to hold the keys to its strongroom and safe.
Of the remaining 15 lapses that range from the incorrect use of sinking funds to incomplete disclosure of related party transactions, AHTC has started to put in place measures to remedy 12 of them.
Another three lapses are still pending review by KPMG.
The Ministry of National Development said on Thursday it would give the town council $12.9 million in grants that it had earlier withheld, as it is satisfied that safeguards are in place to ensure the money is properly used.
The HDB said on Friday that it is reviewing KPMG's report.
The Ministry of National Development said on Thursday it would give the town council $12.9 million in grants that it had earlier withheld, as it is satisfied that safeguards are in place to ensure the money is properly used.
The HDB said on Friday that it is reviewing KPMG's report.
Some weaknesses identified by KPMG
The Sunday Times, 17 Apr 2016
FINANCE DEPARTMENT
The Aljunied Hougang Town Council's (AHTC) finance department was weakened by a high turnover of staff. It also did not have a finance manager, and had only a deputy finance manager.
This led to the loss of institutional knowledge and inconsistencies in accounting practices.
AHTC told the firm it had difficulties recruiting and retaining managerial staff, but has since appointed two consultants to help with book-keeping matters, and also hired a second deputy finance manager.
ACCOUNTING PRACTICES
The town council had not closed its accounts every month, making it hard to ensure the accuracy of its accounting data. AHTC is coming up with procedures to do so, and plans to implement them by the 2017 financial year.
It is also using a dated accounting system, which is no longer supported by vendors and cannot provide reports in the formats needed.
This has made it hard for the town council to get an accurate picture of its service and conservancy charges arrears.
The town council has issued a tender for a new system to replace it. It is also improving its system so that it can generate reports on service and conservancy arrears without the need for manual entry. This should be ready by the month's end.
RELATED PARTY TRANSACTIONS
The town council has a conflict of interest policy that did not extend to councillors. The policy also did not explicitly cover payments made to related parties.
AHTC will come up with a policy and establish procedures for such transactions that comply with the law, by next month. It had also informed KPMG that there had not been any transactions with related parties since the town council's contract with its former managing agent, FM Solutions and Services, ended last July.
Four of the town council's senior officers had stakes in FMSS, and had approved payments on behalf of the town council to their own company.
The Sunday Times, 17 Apr 2016
FINANCE DEPARTMENT
The Aljunied Hougang Town Council's (AHTC) finance department was weakened by a high turnover of staff. It also did not have a finance manager, and had only a deputy finance manager.
This led to the loss of institutional knowledge and inconsistencies in accounting practices.
AHTC told the firm it had difficulties recruiting and retaining managerial staff, but has since appointed two consultants to help with book-keeping matters, and also hired a second deputy finance manager.
ACCOUNTING PRACTICES
The town council had not closed its accounts every month, making it hard to ensure the accuracy of its accounting data. AHTC is coming up with procedures to do so, and plans to implement them by the 2017 financial year.
It is also using a dated accounting system, which is no longer supported by vendors and cannot provide reports in the formats needed.
This has made it hard for the town council to get an accurate picture of its service and conservancy charges arrears.
The town council has issued a tender for a new system to replace it. It is also improving its system so that it can generate reports on service and conservancy arrears without the need for manual entry. This should be ready by the month's end.
RELATED PARTY TRANSACTIONS
The town council has a conflict of interest policy that did not extend to councillors. The policy also did not explicitly cover payments made to related parties.
AHTC will come up with a policy and establish procedures for such transactions that comply with the law, by next month. It had also informed KPMG that there had not been any transactions with related parties since the town council's contract with its former managing agent, FM Solutions and Services, ended last July.
Four of the town council's senior officers had stakes in FMSS, and had approved payments on behalf of the town council to their own company.
Accountants for WP-run AHTC submit report
By Chong Zi Liang, The Straits Times, 16 Apr 2016
The newly-appointed accountants for the town council run by the Workers' Party (WP) have submitted their first report on its accounts to the Housing Board.
They did so yesterday and the HDB said last night it will be reviewing the report. It, however, did not give any details of the content. The WP did not respond to media queries on the the report by press time.
The Aljunied-Hougang Town Council (AHTC) hired a team of accountants from KPMG last month to look into its books.
This followed a Court of Appeal order in January that the town council appoint a Big Four accounting firm to help establish whether any past payments it made were improper and if money should be recovered, among other things.
The apex court also directed the accountants to submit monthly progress reports to HDB, the first of which was made yesterday.
The Ministry of National Development said on Thursday that AHTC will be receiving the long- awaited government grants as it is satisfied that safeguards are in place to ensure the proper use of the money.
AHTC will get $12.9 million, while another $1.8 million will go to Punggol East constituency, which was previously part of the WP's Aljunied-Hougang-Punggol East Town Council (AHPETC).
The $1.8 million will be transferred to the Pasir Ris-Punggol Town Council, which is now managing Punggol East after the People's Action Party won the constituency in last year's general election.
The ministry had withheld the grants due to lapses in financial governance in the former AHPETC identified by its own auditors and a special Auditor- General's Office report made public last year.
The ministry and HDB subsequently applied to the courts to appoint independent accountants to inspect the town council's books and rectify the lapses.
After months of disagreements, the Court of Appeal ordered AHTC to select one of the Big Four accounting firms to do the work.
By Chong Zi Liang, The Straits Times, 16 Apr 2016
The newly-appointed accountants for the town council run by the Workers' Party (WP) have submitted their first report on its accounts to the Housing Board.
They did so yesterday and the HDB said last night it will be reviewing the report. It, however, did not give any details of the content. The WP did not respond to media queries on the the report by press time.
The Aljunied-Hougang Town Council (AHTC) hired a team of accountants from KPMG last month to look into its books.
This followed a Court of Appeal order in January that the town council appoint a Big Four accounting firm to help establish whether any past payments it made were improper and if money should be recovered, among other things.
The apex court also directed the accountants to submit monthly progress reports to HDB, the first of which was made yesterday.
The Ministry of National Development said on Thursday that AHTC will be receiving the long- awaited government grants as it is satisfied that safeguards are in place to ensure the proper use of the money.
AHTC will get $12.9 million, while another $1.8 million will go to Punggol East constituency, which was previously part of the WP's Aljunied-Hougang-Punggol East Town Council (AHPETC).
The $1.8 million will be transferred to the Pasir Ris-Punggol Town Council, which is now managing Punggol East after the People's Action Party won the constituency in last year's general election.
The ministry had withheld the grants due to lapses in financial governance in the former AHPETC identified by its own auditors and a special Auditor- General's Office report made public last year.
The ministry and HDB subsequently applied to the courts to appoint independent accountants to inspect the town council's books and rectify the lapses.
After months of disagreements, the Court of Appeal ordered AHTC to select one of the Big Four accounting firms to do the work.
WP responds to Charles Chong on fund transfer
By Pearl Lee, The Straits Times, 19 Apr 2016
The Workers' Party (WP) yesterday took issue with Punggol East MP Charles Chong over his comments about the transfer of sinking funds to the opposition party when it won the constituency in a 2013 by-election.
The party said that contrary to Mr Chong's claim that the People's Action Party-run Pasir Ris-Punggol Town Council (PRPTC) had transferred $22.5 million to the former Aljunied-Hougang-Punggol East Town Council in 2013, these were actually paid in instalments over 20 months ending in September 2014.
Mr Chong said this to The Straits Times last Thursday when asked about a National Development Ministry announcement that it would release previously withheld government grants to the WP-run town council after it appointed new accountants and agreed to safeguards to ensure proper use of the money.
The town council will get $12.9 million, while another $1.8 million will go to Punggol East, now managed by PRPTC after the PAP won the constituency back in last year's general election.
Aljunied GRC MP Pritam Singh, chairman of the renamed Aljunied-Hougang Town Council (AHTC), said in a statement that Mr Chong's comment was "factually incorrect" as PRPTC made the final sinking fund transfer only in 2014.
Separately, he said it was "odd" for Mr Chong to say that with Punggol East coming back under PRPTC's umbrella, the town council had so far received only an "interim amount" of $10 million in sinking funds due to the council.
Mr Chong had acknowledged that the exact amount is still being worked out, but called for the fund transfer to be settled soon "as we have to get back what is due to us to be fair to the residents".
Mr Singh said yesterday that just as PRPTC transferred the sinking funds in tranches between 2013 and 2014, "AHTC will transfer all sinking funds due to Punggol East SMC in instalments".
"We will work closely with our auditor to ensure that all sinking funds - after accounting for any expenditure on Punggol East SMC from 1 May 2013 to 30 Nov 2015 - are transferred to PRPTC in due course."
Mr Chong was contacted for comments last night but did not respond at press time.
Mr Chong was contacted for comments last night but did not respond at press time.
WP town council's release 'misleading': PAP
By Pearl Lee, The Straits Times, 20 Apr 2016
The People's Action Party (PAP) town council that manages Punggol East constituency has countered that the Workers' Party (WP) town council is being misleading, in an ongoing exchange over the transfer of sinking funds.
Mr Zainal Sapari, chairman of the Pasir Ris-Punggol Town Council (PRPTC), yesterday took issue with the Aljunied-Hougang Town Council (AHTC) for implying that his town council had been slow in the transfer of the funds.
The issue arose following a change of hands in the constituency. In 2013, the WP won Punggol East in a by-election. In last September's general election, the PAP won it back.
Mr Zainal recounted in a Facebook post that PRPTC had made two transfers totalling $18 million in sinking funds to the former Aljunied-Hougang- Punggol East Town Council (AHPETC) within four months of losing Punggol East.
He said this amounted to 80 per cent of the $22.5 million due to AHPETC, renamed AHTC after last year's election.
His town council made a third transfer of $3 million in May 2014, after submitting the constituency's audited financial statements.
The final $890,092 was transferred in September 2014, after PRPTC "helped (AHPETC) to understand their queries about the accounts", he added.
Mr Zainal was responding to AHTC chairman Pritam Singh, who said on Monday that PRPTC had taken more than 20 months to hand over the sinking funds.
Mr Zainal said: "The media release by AHTC is misleading to infer (sic) that PRPTC was slow in transferring the sinking funds to AHPETC."
The saga started after Punggol East MP Charles Chong said last Thursday that AHTC had not handed over all the sinking funds after last year's election.
By Pearl Lee, The Straits Times, 20 Apr 2016
The People's Action Party (PAP) town council that manages Punggol East constituency has countered that the Workers' Party (WP) town council is being misleading, in an ongoing exchange over the transfer of sinking funds.
Mr Zainal Sapari, chairman of the Pasir Ris-Punggol Town Council (PRPTC), yesterday took issue with the Aljunied-Hougang Town Council (AHTC) for implying that his town council had been slow in the transfer of the funds.
The issue arose following a change of hands in the constituency. In 2013, the WP won Punggol East in a by-election. In last September's general election, the PAP won it back.
Mr Zainal recounted in a Facebook post that PRPTC had made two transfers totalling $18 million in sinking funds to the former Aljunied-Hougang- Punggol East Town Council (AHPETC) within four months of losing Punggol East.
He said this amounted to 80 per cent of the $22.5 million due to AHPETC, renamed AHTC after last year's election.
His town council made a third transfer of $3 million in May 2014, after submitting the constituency's audited financial statements.
The final $890,092 was transferred in September 2014, after PRPTC "helped (AHPETC) to understand their queries about the accounts", he added.
Mr Zainal was responding to AHTC chairman Pritam Singh, who said on Monday that PRPTC had taken more than 20 months to hand over the sinking funds.
Mr Zainal said: "The media release by AHTC is misleading to infer (sic) that PRPTC was slow in transferring the sinking funds to AHPETC."
The saga started after Punggol East MP Charles Chong said last Thursday that AHTC had not handed over all the sinking funds after last year's election.
Mr Chong said that AHTC had transferred only an "interim amount" of $10 million, and the exact amount due is being worked out.
Mr Singh replied that AHTC will hand over the sinking funds in several instalments, just as PRPTC had done.
He said AHTC will ensure all sinking funds are transferred to PRPTC "in due course".
Yesterday, Mr Zainal noted that PRPTC had transferred 80 per cent of the sinking funds to AHPETC within four months of the Punggol East constituency being lost.
"Compare that to the current situation, where PRPTC has received only $10 million of sinking funds from AHTC and it has been more than four months since the handover date," he said.
He added: "I hope AHTC can get their qualified accounts in order and make the second interim sinking fund transfer as soon as possible."
He added: "I hope AHTC can get their qualified accounts in order and make the second interim sinking fund transfer as soon as possible."
* 2nd KPMG monthly report - 13 May 2016 *
WP town council taking steps to fix lapses
But HDB says much work remains to be done as most issues flagged are still not resolved
By Pearl Lee, The Straits Times, 16 May 2016
Workers' Party-run Aljunied-Hougang Town Council (AHTC) has taken steps to resolve concerns over related-party transactions and conflicts of interest, a report by auditor KPMG last week showed.
The report comes a month after KPMG flagged the town council's shortcomings in governance framework and accounting practices.
In its latest report, dated Friday May 13 and released by AHTC on Saturday night, it said work on resolving 15 out of 17 audit points flagged last month is still ongoing.
AHTC chairman Pritam Singh said in a statement that the 15 outstanding audit points "are now subjected to remedial measures" and KPMG is reviewing them.
The town council had submitted the 30-page report to the Housing Board on Saturday, as required by the Court of Appeal. The apex court had directed AHTC to appoint a Big Four accounting firm to establish whether any past payments it made were improper, and ensure it complies with the laws, in the wake of a report by the Auditor-General into the town council's finances.
HDB told The Straits Times last night that it is reviewing the latest progress report.
WP town council taking steps to fix lapses
But HDB says much work remains to be done as most issues flagged are still not resolved
By Pearl Lee, The Straits Times, 16 May 2016
Workers' Party-run Aljunied-Hougang Town Council (AHTC) has taken steps to resolve concerns over related-party transactions and conflicts of interest, a report by auditor KPMG last week showed.
The report comes a month after KPMG flagged the town council's shortcomings in governance framework and accounting practices.
In its latest report, dated Friday May 13 and released by AHTC on Saturday night, it said work on resolving 15 out of 17 audit points flagged last month is still ongoing.
AHTC chairman Pritam Singh said in a statement that the 15 outstanding audit points "are now subjected to remedial measures" and KPMG is reviewing them.
The town council had submitted the 30-page report to the Housing Board on Saturday, as required by the Court of Appeal. The apex court had directed AHTC to appoint a Big Four accounting firm to establish whether any past payments it made were improper, and ensure it complies with the laws, in the wake of a report by the Auditor-General into the town council's finances.
HDB told The Straits Times last night that it is reviewing the latest progress report.
"Preliminarily, we note that AHTC has started to introduce some remedial measures to address the audit points previously flagged by the Auditor-General's Office and AHTC's auditors in the Town Council's FY13/14 and FY14/15 financial statements," an HDB spokesman said. "However, much work remains to be done as a majority of the audit points (15 out of 17) remain unresolved," the spokesman added.
KPMG had, in its first report last month, flagged AHTC's shortcomings in managing related-party transactions. The shortcomings include incomplete disclosure of transactions with the related parties, and waiver of open tenders for services provided by these parties.
In response, the town council has drafted a policy to remedy the incomplete disclosures of transactions with the related parties.
KPMG then reviewed the policy and recommended, among other things, that the document cover a wider range of activities instead of just the tender process, and tighten certain definitions, such as "arm's- length transaction".
The town council has submitted its policy on procedures for the calling of tenders and quotations. KPMG said in the latest progress report it is still reviewing the policy, and testing the effectiveness of AHTC's tender and quotation procedures.
AHTC has also updated its conflict-of-interest policy, which now requires town council staff, including town councillors, to declare any paid and unpaid engagements or employment with external parties, as well as personal financial interests and gifts, KPMG noted.
The policy did not previously cover town councillors.
Other updates include documents defining more clearly the powers of each committee to beef up the town council's governance framework.
AHTC has also boosted its finance department by hiring a second deputy finance manager and engaging two external consultants.
They are remediating outstanding bookkeeping matters and preparing for the next statutory audit.
In its report last week, KPMG noted that AHTC had transferred a sum of $3,755,044.86 to its Sinking Fund bank accounts on April 29, in time for the January to March 2016 period. KPMG also highlighted a duplicate transfer of $157,141.01 to a Sinking Fund bank account for the October-December 2014 period.
Yesterday, HDB noted that new details had emerged from KPMG's review on lapses in AHTC internal processes, such as the duplicate Sinking Fund transfer and various weaknesses in internal controls.
"These may have remained unresolved had the court not ordered the TC to appoint auditors to look into its accounts," it said.
HDB said AHTC must take active and urgent steps to close the gaps, and comply fully with the rules. "We also expect AHTC to extend its fullest cooperation to the auditors for the other court-ordered checks on whether any past payments were improperly made and ought to be recovered," it said.
HDB said AHTC must take active and urgent steps to close the gaps, and comply fully with the rules. "We also expect AHTC to extend its fullest cooperation to the auditors for the other court-ordered checks on whether any past payments were improperly made and ought to be recovered," it said.
Punggol East's accounts: PwC seeks more info
By Lim Yan Liang, The Straits Times, 31 May 2016
An independent accountant appointed to look into the accounts of Punggol East constituency has run into roadblocks because it has not received information it needs, said the Pasir Ris-Punggol Town Council (PRPTC).
By Lim Yan Liang, The Straits Times, 31 May 2016
An independent accountant appointed to look into the accounts of Punggol East constituency has run into roadblocks because it has not received information it needs, said the Pasir Ris-Punggol Town Council (PRPTC).
Pricewaterhouse Coopers (PwC), in a progress report last month, said it needed additional documents from Aljunied-Hougang Town Council (AHTC) to get an accurate picture of Punggol East's financial situation.
Punggol East used to be part of the former Workers' Party-run Aljunied-Hougang-Punggol East Town Council (AHPETC). It came under PRPTC after the People's Action Party won it back from the WP in last September's general election.
Yesterday, PRPTC chairman Zainal Sapari said PwC will not be able to audit Punggol East's accounts without the documents, some of which relate to billings and receipts.
This review is necessary because, with Punggol East changing hands, PRPTC has to comply with an appeals court order made last December requiring the WP town council to appoint accountants to look into its books and establish if past payments made were improper.
The court order follows the Auditor-General finding serious financial and governance lapses at the town council.
Yesterday, the PRPTC said it owed a duty to its residents to ensure all was in order.
"This duty is all the more acute because of the highly troubling findings and observations in the Auditor-General's report and the Court of Appeal's judgment, both of which flagged serious issues and lapses on the part of AHPETC," it said.
The town council also said it wants to make sure all the property and rights due to it have been transferred.
PwC had listed in its first monthly report that some AHPETC legacy issues may affect the accuracy of Punggol East's accounts, including inadequacies in accounting systems. This may affect the accounts and opening balances to be transferred to PRPTC.
It added that PRPTC had asked to meet AHTC on four occasions since February, but did not get a response.
PwC also said Punggol East is no longer contravening the Town Council Act because it has come under PRPTC's systems and processes. Hence, it proposed that the monthly report ordered by the court be done away with.
Yesterday, the Housing Board said it agreed with the recommendation and added that PRPTC "has not had a history of control issues".
It also urged both town councils to work together. "As public monies are at stake, HDB trusts that the town councils and their accountants will carry out thorough and robust checks, to assure residents and the public that all of AHPETC's non-compliances have been fully resolved and that any improper payments have been identified and recovered," it said.
PRPTC said it had proposed in December to AHTC that they jointly appoint an accountant. AHTC said "no" in March.
Responding to media queries, AHTC chairman Pritam Singh said his town council will issue a statement "in due course".
WP town council says it has transferred $10 million more of Punggol East's sinking funds to PAP town council
Total sum transferred to Pasir Ris-Punggol Town Council is now $20m: Pritam Singh
By Tham Yuen-C, Assistant Political Editor, The Straits Times, 3 Jun 2016
The Aljunied-Hougang Town Council (AHTC), run by the Workers' Party (WP), has authorised the transfer of another $10 million in sinking funds to Pasir Ris-Punggol Town Council (PRPTC), said AHTC chairman Pritam Singh.
This brings the total sum of sinking funds transferred to PRPTC to $20 million, he added.
The money belongs to Punggol East constituency, which used to be under the former Aljunied-Hougang-Punggol East Town Council. It is now under the PRPTC after the People's Action Party won it back in last September's general election.
After the change of hands, issues arose over the transfer of funds. PRPTC said AHTC has not handed over all of the sinking funds to date, and AHTC said it is following past practice and paying by instalments.
Mr Singh said, in his statement on Wednesday, that his town council will make a final transfer of any remaining sinking funds due to Punggol East once the constituency's audited accounts are ready.
He also addressed a review of Punggol East's accounts that was initiated by PRPTC.
On Tuesday, PRPTC said it has appointed Pricewaterhouse Coopers (PwC) for the task, but the accountant was unable to proceed as AHTC has not handed over "additional documents" that were needed.
Total sum transferred to Pasir Ris-Punggol Town Council is now $20m: Pritam Singh
By Tham Yuen-C, Assistant Political Editor, The Straits Times, 3 Jun 2016
The Aljunied-Hougang Town Council (AHTC), run by the Workers' Party (WP), has authorised the transfer of another $10 million in sinking funds to Pasir Ris-Punggol Town Council (PRPTC), said AHTC chairman Pritam Singh.
This brings the total sum of sinking funds transferred to PRPTC to $20 million, he added.
The money belongs to Punggol East constituency, which used to be under the former Aljunied-Hougang-Punggol East Town Council. It is now under the PRPTC after the People's Action Party won it back in last September's general election.
After the change of hands, issues arose over the transfer of funds. PRPTC said AHTC has not handed over all of the sinking funds to date, and AHTC said it is following past practice and paying by instalments.
Mr Singh said, in his statement on Wednesday, that his town council will make a final transfer of any remaining sinking funds due to Punggol East once the constituency's audited accounts are ready.
He also addressed a review of Punggol East's accounts that was initiated by PRPTC.
On Tuesday, PRPTC said it has appointed Pricewaterhouse Coopers (PwC) for the task, but the accountant was unable to proceed as AHTC has not handed over "additional documents" that were needed.
Mr Singh said: "This characterisation of the number of documents PRPTC requires is misleading."
He said PRPTC chairman Zainal Sapari had in fact asked for "all documents and information that AHTC had made available for the Court of Appeal-mandated review".
The apex court ordered the WP town council last December to appoint accountants to look into its books and establish if past payments made were improper. The order came after the Auditor-General found serious financial and governance lapses at the town council.
On Tuesday, PRPTC said that since it has taken over Punggol East's management, it too has to comply with the court order on the constituency's accounts.
Mr Singh, however, said AHTC has already appointed a team from KPMG under the court order.
KPMG's job scope includes looking at payments made from 2011 to last year, which covers the period Punggol East was under the WP town council, he added.
PRPTC appointing PwC independently "would effectively duplicate the work of KPMG and, separately, require AHTC to commit resources devoted to the KPMG review to attend to PRPTC's requests", he said.
Despite this, he said, he and his town council did consider Mr Zainal's request for documents, and it was put up at a May town council meeting. He said he informed Mr Zainal on April 19 that it would be discussed at the meeting.
AHTC's town councillors decided the town council "ought to focus its fullest attention on the KPMG review", said Mr Singh, adding that he told Mr Zainal about it on May 25.
Despite this, he said, he and his town council did consider Mr Zainal's request for documents, and it was put up at a May town council meeting. He said he informed Mr Zainal on April 19 that it would be discussed at the meeting.
AHTC's town councillors decided the town council "ought to focus its fullest attention on the KPMG review", said Mr Singh, adding that he told Mr Zainal about it on May 25.
PwC, in a progress report last month, said it needed additional documents from AHTC to get an accurate picture of Punggol East's financial situation.
On Tuesday, PRPTC said it owed a duty to its residents to ensure all was in order. It also said it wants to ensure all the property and rights due to it have been transferred.
On Tuesday, PRPTC said it owed a duty to its residents to ensure all was in order. It also said it wants to ensure all the property and rights due to it have been transferred.
Punggol East's accounts 'must be reviewed after handover'
Pasir Ris-Punggol Town Council says it is a court order; WP says accounts seen last year
By Lim Yan Liang, The Straits Times, 7 Jun 2016
Pasir Ris-Punggol Town Council (PRPTC) said yesterday that it hopes its accountant can work with the Aljunied-Hougang Town Council's (AHTC) accountant to look into the books of Punggol East.
In a statement yesterday, PRPTC said it has to comply with a court order to review Punggol East's accounts after taking over the single-member constituency from the former Aljunied-Hougang-Punggol East Town Council (AHPETC).
PRPTC added that it was in the interests of Punggol East's residents to get to the bottom of things. "We look forward to KPMG and Pricewaterhouse Coopers (PwC) working together to inquire into whether any past payments made by AHPETC had been improper and ought to be recovered," it said.
The town council was responding to comments by AHTC chairman Pritam Singh last Wednesday.
Since the constituency changed hands - the People's Action Party won it from the Workers' Party (WP) in last September's General Election - PRPTC and AHTC have disagreed over several issues such as sinking funds and the constituency's accounts.
PRPTC reiterated that since it has taken over Punggol East, it has to comply with a Court of Appeal order made last December requiring the WP-run town council to appoint accountants to establish if past payments made were improper. AHTC appointed KPMG for the job.
The court order follows the Auditor-General finding serious lapses at the town council.
Last Wednesday, Mr Singh said KPMG's review already covers Punggol East's accounts.
Pasir Ris-Punggol Town Council says it is a court order; WP says accounts seen last year
By Lim Yan Liang, The Straits Times, 7 Jun 2016
Pasir Ris-Punggol Town Council (PRPTC) said yesterday that it hopes its accountant can work with the Aljunied-Hougang Town Council's (AHTC) accountant to look into the books of Punggol East.
In a statement yesterday, PRPTC said it has to comply with a court order to review Punggol East's accounts after taking over the single-member constituency from the former Aljunied-Hougang-Punggol East Town Council (AHPETC).
PRPTC added that it was in the interests of Punggol East's residents to get to the bottom of things. "We look forward to KPMG and Pricewaterhouse Coopers (PwC) working together to inquire into whether any past payments made by AHPETC had been improper and ought to be recovered," it said.
The town council was responding to comments by AHTC chairman Pritam Singh last Wednesday.
Since the constituency changed hands - the People's Action Party won it from the Workers' Party (WP) in last September's General Election - PRPTC and AHTC have disagreed over several issues such as sinking funds and the constituency's accounts.
PRPTC reiterated that since it has taken over Punggol East, it has to comply with a Court of Appeal order made last December requiring the WP-run town council to appoint accountants to establish if past payments made were improper. AHTC appointed KPMG for the job.
The court order follows the Auditor-General finding serious lapses at the town council.
Last Wednesday, Mr Singh said KPMG's review already covers Punggol East's accounts.
He said a request for documents by PRPTC's accountant, PwC, would lead to duplicate work for AHTC and KPMG. He added that AHTC wanted to focus on its work with KPMG.
Responding to this, PRPTC said it had appointed PwC only after AHTC turned down its request last December to jointly appoint KPMG.
It added that there would be no duplication of work as the documents can be shared between accountants. "AHTC's explanation that it wishes to focus on KPMG's work makes no sense because all it needs to do is to give a simple written authorisation to KPMG to share the documents with PwC," it said.
PRPTC also confirmed that it has received a total of $20 million in sinking fund transfers from AHTC, but said it does not know when AHTC would transfer the rest of the funds due to Punggol East.
Mr Singh had said a final transfer of any remaining sinking funds would be done once the audited accounts are ready.
PRPTC said AHTC had not stated the "definitive" date when the transfer would be done. It added: "We look forward to AHTC's satisfactory conclusion of the audit of its accounts, so that it can finally complete the transfer of the remaining sums that it owes to Punggol East."
* 3rd KPMG monthly report - 15 Jun 2016 *
KPMG starts review of past payments made by AHTC
It will determine if payments were improper as part of efforts to fix lapses at town council
By Chong Zi Liang, The Straits Times, 17 Jun 2016
The independent accountant appointed by the Workers' Party-run Aljunied-Hougang Town Council (AHTC) has started reviewing past payments made by the town council to determine if they were improper.
Audit firm KPMG said in its third monthly report on the town council that it will study AHTC's accounting records for the period of May 27, 2011 to Nov 27 last year for the review. The records contain 6,738,319 entries.
AHTC chairman Pritam Singh on Wednesday said his town council has given KPMG specific instructions to identify all transactions involving its former managing agent companies - FM Solutions and Services and FM Solutions and Integrated Services.
He added that the town council had submitted the 32-page report to the Housing Board on Wednesday, as required by the Court of Appeal.
The apex court had directed AHTC to appoint a Big Four accounting firm to help fix governance and financial lapses at the town council, and ensure compliance with the laws.
This came in the wake of a special audit by the Auditor-General of the town council's finances.
So far, AHTC has resolved three out of 17 lapses that were still outstanding when KPMG was hired in March. In its latest report, KPMG highlighted one lapse that was recently fixed.
It said the town council had implemented a process to monitor, investigate and address differences between bank statements and its accounting records.
Steps were also taken by the town council to fix other lapses, the report said.
For instance, the town council has started monitoring and investigating the flow of funds in and out of its temporary clearing accounts, which are used for transactions with external parties.
It has also corrected a duplicate transfer of $157,141.01 to its sinking fund, which was highlighted in the previous progress report.
KPMG said it is in the process of verifying AHTC's calculation of how much it transferred to its sinking fund for financial years 2011/2012 to 2013/2014. AHTC said it had transferred $50,176,747.
KPMG also pointed out several issues it had observed since it put out the last report last month.
It found that data for service and conservancy charges (S&CC) arrears could not be fully generated automatically, even though AHTC said its system was capable of doing so.
In addition, S&CC data for April was incorrectly extracted from a May report, resulting in an understatement of $11,400.22 due for collection.
KPMG said AHTC will have to perform a detailed test to make sure its system works properly.
It added that it had also looked into the 13 unresolved opening balances of AHTC's accounts that have been flagged by the town council's own auditors over the years.
The town council has said in the past that these issues were the reason its accounts have not been given a clean bill of health.
KPMG said 10 of these issues can be resolved by adjusting entries that were incorrectly posted.
Of the remaining three issues, two have to do with related-party transactions and one has to do with the town council's financial statements from FY 2011/2012, said KPMG.
AHTC has provided a list of entries to be adjusted, and KPMG has asked for the supporting documents.
PRPTC said AHTC had not stated the "definitive" date when the transfer would be done. It added: "We look forward to AHTC's satisfactory conclusion of the audit of its accounts, so that it can finally complete the transfer of the remaining sums that it owes to Punggol East."
* 3rd KPMG monthly report - 15 Jun 2016 *
KPMG starts review of past payments made by AHTC
It will determine if payments were improper as part of efforts to fix lapses at town council
By Chong Zi Liang, The Straits Times, 17 Jun 2016
The independent accountant appointed by the Workers' Party-run Aljunied-Hougang Town Council (AHTC) has started reviewing past payments made by the town council to determine if they were improper.
Audit firm KPMG said in its third monthly report on the town council that it will study AHTC's accounting records for the period of May 27, 2011 to Nov 27 last year for the review. The records contain 6,738,319 entries.
AHTC chairman Pritam Singh on Wednesday said his town council has given KPMG specific instructions to identify all transactions involving its former managing agent companies - FM Solutions and Services and FM Solutions and Integrated Services.
He added that the town council had submitted the 32-page report to the Housing Board on Wednesday, as required by the Court of Appeal.
The apex court had directed AHTC to appoint a Big Four accounting firm to help fix governance and financial lapses at the town council, and ensure compliance with the laws.
This came in the wake of a special audit by the Auditor-General of the town council's finances.
So far, AHTC has resolved three out of 17 lapses that were still outstanding when KPMG was hired in March. In its latest report, KPMG highlighted one lapse that was recently fixed.
It said the town council had implemented a process to monitor, investigate and address differences between bank statements and its accounting records.
Steps were also taken by the town council to fix other lapses, the report said.
For instance, the town council has started monitoring and investigating the flow of funds in and out of its temporary clearing accounts, which are used for transactions with external parties.
It has also corrected a duplicate transfer of $157,141.01 to its sinking fund, which was highlighted in the previous progress report.
KPMG said it is in the process of verifying AHTC's calculation of how much it transferred to its sinking fund for financial years 2011/2012 to 2013/2014. AHTC said it had transferred $50,176,747.
KPMG also pointed out several issues it had observed since it put out the last report last month.
It found that data for service and conservancy charges (S&CC) arrears could not be fully generated automatically, even though AHTC said its system was capable of doing so.
In addition, S&CC data for April was incorrectly extracted from a May report, resulting in an understatement of $11,400.22 due for collection.
KPMG said AHTC will have to perform a detailed test to make sure its system works properly.
It added that it had also looked into the 13 unresolved opening balances of AHTC's accounts that have been flagged by the town council's own auditors over the years.
The town council has said in the past that these issues were the reason its accounts have not been given a clean bill of health.
KPMG said 10 of these issues can be resolved by adjusting entries that were incorrectly posted.
Of the remaining three issues, two have to do with related-party transactions and one has to do with the town council's financial statements from FY 2011/2012, said KPMG.
AHTC has provided a list of entries to be adjusted, and KPMG has asked for the supporting documents.
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