Friday, 21 February 2014

PA responds to online reports on its accounts

It explains why auditors gave adverse opinion
By Andrea Ong, The Straits Times, 21 Feb 2014

THE People's Association (PA) last night responded to reports that independent auditors had raised concerns about its financial statements for four years, after stories about this began to circulate online.

It acknowledged that auditors had submitted an "adverse opinion" on its accounts from 2008 to 2011 because the financial statements of grassroots organisations under its charge were not included.

It said the matter had been raised in Parliament in 2008 and it had explained then its view that the funds in those accounts belonged to the grassroots organisations, which were operationally self-funding.

An "adverse opinion" is the most negative among the four types of audit opinions.

In their auditors' report to the PA for the years 2008 to 2011, KPMG and PricewaterhouseCoopers said they had submitted adverse opinions because the exclusion of the grassroots organisations' statements was not in compliance with the Statutory Board Financial Reporting Standards.

The PA is a statutory board under the Ministry of Culture, Community and Youth and receives more than $300 million in government grants each year.

In its reply to The Straits Times, the PA stressed that the auditors had given an adverse opinion "for one reason - not including the accounts of its grassroots organisations in the PA's accounts".

The auditors had said in their reports that PA's accounting and other records had been properly kept, in accordance with the law, the PA spokesman said, adding: "Government grants and the cost of staff support are fully accounted for in PA's financial statements."

In its statement, the PA also noted that Workers' Party chief Low Thia Khiang had raised the issue of the PA's financial reports in Parliament in 2008, and "was fully responded to".

"PA's view then was that the funds in these accounts belong to grassroots organisations, which are operationally self-funding.

"Further, all GROs are subject to proper procurement procedures, financial controls and good corporate governance practices," the PA spokesman said.

The PA has nevertheless since taken steps to consolidate all grassroots accounts into its financial statements, to be in full compliance with the financial reporting standards for statutory boards. "PA is on track to present a fully consolidated accounts for FY 2013," the spokesman said.

A report on the PA accounts was published on the sociopolitical website TR Emeritus yesterday.

A check by The Straits Times of the PA's annual and auditors' reports confirmed that the auditors had submitted an adverse opinion for four years.

In its report on the PA's accounts for FY2010/2011, KPMG said the financial statements for a total of 1,803 GROs were not consolidated in the PA's report.


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