Sunday, 9 March 2014

'Red' for Workers' Party town council's report card for FY2012

The grade for corporate governance 'takes into account auditor's findings'
By Andrea Ong, The Straits Times, 8 Mar 2014

THE Aljunied-Hougang-Punggol East Town Council (AHPETC) has been given a red grade for corporate governance in the Government's report card on town councils for the last financial year.

The updated grade, which had previously been pending, took into account the auditor's report for the council which flagged at least two counts of contraventions when it was submitted last month, said the Ministry of National Development (MND) in a statement yesterday.

The ministry listed AHPETC's failure to transfer service and conservancy charges to its sinking funds, as required by the Town Councils Financial Rules, and failure to keep proper accounts and records of its transactions and affairs, as required by the Town Councils Act.

The Workers' Party-run town council submitted its financial year 2012/13 audited financial statements, auditor's report and corporate governance checklist to the MND on Feb 10, three months after the ministry issued the Town Council Management Report for FY2012.


There are four types of audit opinions - a disclaimer is the second-worst, with the worst being adverse.

A disclaimer indicates a lack of proper records and information.

Consequently, the auditor is unable to obtain the necessary evidence to certify the financial statements as either accurate or inaccurate.

The auditor's findings prompted the MND to express its concern, but AHPETC chairman Sylvia Lim then said some of the issues could be attributed to the handover from the former town council under the People's Action Party in 2011.

The ministry disputed this.

A week later, Deputy Prime Minister and Finance Minister Tharman Shanmugaratnam directed the Auditor-General to audit AHPETC's accounts, citing the serious questions raised over the reliability and accuracy of its financial and accounting systems.

Auditor-General's Audit of Workers' Party-run town council FY2012-13 accounts flags major lapses

In its statement yesterday, the MND said AHPETC has also not submitted its auditor's management letter, the last of four documents needed for assessment in the town council management report, despite multiple reminders. It has reminded the council to do so as soon as possible.

One of the three documents AHPETC had submitted was the self-declared corporate governance checklist.

Ms Lim indicated that AHPETC had complied with 19 of the 20 items on the list.

One of these was the requirement to keep proper accounts and records, which she said the town council complied with, "subject to specific observations of audit".

The council only did not comply with the requirement to transfer service and conservancy charges to sinking funds, which she said has since been rectified.

Yesterday, Ms Lim said in a statement that the updated corporate governance grade from MND "comes as no surprise".

The factors the ministry took into account included matters that AHPETC had previously provided information on, she said.

As these matters are the subject of the ongoing Auditor-General's audit, the council would respond further, if there is a need to, after the audit.



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