Saturday 23 November 2013

Most town councils do better in FY2012 Town Council Management Report for Apr 2012 to Mar 2013

But WP-run council fares poorly on arrears, yet to submit financial audits
By Rachel Chang, The Straits Times, 22 Nov 2013

TOWN councils performed better than past years in the latest management report from the Ministry of National Development (MND), with all but one receiving top scores for estate cleanliness, lift performance and corporate governance.

But the Aljunied-Hougang- Punggol East Town Council (AHPETC) run by the Workers' Party (WP) again got a "pending" grade for corporate governance, as it had not submitted its audited financial reports, said MND.

The corporate governance indicator, one of five in the annual report, measures compliance with the law in areas such as announcing and awarding tenders.

The report, released yesterday, appraised the 15 town councils between April last year and March this year.

AHPETC chairman Sylvia Lim said it had not submitted its documents because its auditors, who were appointed this May, are still in the midst of finalising the town council's financial statements.

"We understand that the issues being addressed include complexities resulting from the handover legacy, classification and treatment issues, year-end adjustments and others," she said in a statement.

In response to queries, an MND spokesman said it had also not received the AHPETC auditor's management letter and self-declared corporate governance checklist.

This is the second time in a row that AHPETC's corporate governance grade is "pending".

Last year, Ms Lim said it failed to submit its documents on time because of a delay created by the town council's migration to new IT software. The old vendor, a company run by the People's Action Party (PAP), terminated its services when the WP took over the town council, she added.

This charge led to a protracted exchange of accusations between the PAP and the WP of conflicts of interest involving close ties that the parties have with the vendors and companies that their town councils hire.

The Town Council Management Report will now be released annually instead of half-yearly, MND said. The report has been controversial since its inception in 2010. Meant as an accountability exercise to spur performance, the low grades of opposition-run town councils have led some to dismiss it as politically motivated.

This year, AHPETC was one of two town councils not to receive the top score of green for management of service and conservancy charges arrears. Ms Lim said it has stepped up enforcement measures including court prosecution, where other efforts have failed.

Some residents are allowed to pay their arrears in instalments, she said, adding that "improving the situation... will take time to effect".

Potong Pasir Town Council, chaired by PAP MP Sitoh Yih Pin, was the other. It received an amber grade, which connotes a medium score. He said collecting arrears from residents who are having financial difficulties is a "delicate and sensitive matter that will take time to resolve".

It is Potong Pasir's second consecutive amber grade under his watch, but he said it is not his top priority to get a green grade.

He is focused on raising funds from external sources to complete maintenance works such as re-wiring in Potong Pasir, he said.

It was in estate maintenance that the performance of town councils was the most chequered: Six scored green and the other nine, amber. The obstruction of common corridors was the most regularly spotted offence.

MND's Senior Minister of State Lee Yi Shyan urged town councils to be stricter with residents who are "persistently recalcitrant".

WP town council's 'main concern' is completing audit
By Andrea Ong, The Straits Times, 26 Nov 2013

THE Aljunied-Hougang-Punggol East Town Council's (AHPETC) "main concern" now is to bring the audit of its financial reports to a close soon, said its chairman Sylvia Lim yesterday.

She declined to give a firm deadline but said: "We expect the audit to come to a close soon (and) we see some signs of that already... We have to bring it to a close, which is our main concern."

The delay in submitting its audited reports to the Ministry of National Development led to the Workers' Party-run town council getting a "pending" grade for corporate governance in the latest report card on town councils, issued last week.

In a statement then, Ms Lim said AHPETC's auditors were still addressing some issues, including "complexities resulting from the handover legacy".

AHPETC appointed its auditors in early May this year, which Ms Lim yesterday said fell within the normal timeframe for town councils. Generally, the rule of thumb is for the audited financial reports to be submitted about six months after the close of the financial year in March, she said.

Asked if the handover issues had to do with AHPETC migrating to a new IT system, Ms Lim said: "Our IT system is at the moment still being refined, so it is not perfect yet."

When AHPETC also received a "pending" corporate governance grade last year, it cited the new IT system as a reason. It said the old vendor, a firm run by the People's Action Party (PAP), terminated its services after the WP took over the town council.

Ms Lim reiterated that commissioning an IT system from scratch would take 18 to 24 months. "Anything shorter than that, I think, would be a bonus," she said.

Asked if AHPETC would do anything differently next year to improve its corporate governance score, she said it "depends on how the auditors want to run the audit". "Every year they may come with different sorts of questions... how far they want to probe is another issue."

Emphasising she did not want a repeat of the drawn-out exchange between the PAP and WP after the release of last year's report card, Ms Lim said: "We are still grappling with some handover issues and, if the auditors need time to sort it out, then I think the time has to be spent to sort it out."

She noted that residents have not spoken to her about AHPETC's corporate governance grading.

Some, however, apologised for causing the council to get a red banding for the management of service and conservancy charge arrears.

However, AHPETC has made a "concerted effort" to deal with arrears management since last year, said Ms Lim.

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