If Only Singaporeans Stopped to Think: AHPETC does badly in S&CC arrears, corporate governance in Town Council FY2013 report

Thursday, 6 November 2014

AHPETC does badly in S&CC arrears, corporate governance in Town Council FY2013 report

* Auditor-General's Audit of Workers' Party-run town council flags major lapses

WP town council scores poorly over S&CC arrears

It also gets red mark for corporate governance in town council report
By Janice Heng, The Straits Times, 5 Nov 2014

IN THE last financial year, almost three in 10 households under Aljunied-Hougang-Punggol East Town Council (AHPETC) had overdue service and conservancy charges (S&CC) for three months or more.

This was 10 times the national average of 3 per cent, earning the town council a red mark in this area, in the annual Town Council Management Report released yesterday.

The Workers' Party-run town council also scored red in corporate governance. Three other town councils also tripped up in one of these two areas. But estate maintenance was the most widespread issue, with 11 of 16 town councils facing problems.

The Ministry of National Development's (MND) report, which covers the financial year from April last year to March this year, assesses performance in five areas with a red, amber and green banding system.

AHPETC was the only one to receive red - that is, the worst - scores. This was the second year running that it was red-flagged for corporate governance, and the third year for S&CC arrears management.

AHPETC scored poorly in corporate governance as it has not shown that it has rectified "various legal and regulatory contraventions" reported by independent auditors in the 2011 and 2012 financial years. Nor has it submitted its 2013 financial year financial statements and self-declared corporate governance checklist.

The MND report described the "sharp decline" in AHPETC's S&CC arrears situation as being "of grave public concern".

After Aljunied and Hougang town councils merged following the 2011 General Election, the arrears rate rose from 2.6 per cent in the 2010 financial year to 8.4 per cent in the next two years.

The rate rose to 29.4 per cent at end-April last year, meaning that nearly three in 10 households had S&CC payments overdue for three or more months.

From May last year, the town council stopped submitting its monthly S&CC arrears report altogether, despite reminders.

AHPETC did not respond to queries by press time.

The only other town council to fail to score green in this area was Potong Pasir. It continued to get an amber banding, although its arrears rate improved from 4.2 per cent last year to 3.7 per cent this year.

"It's a problem that we inherited," said Potong Pasir Town Council chairman Sitoh Yih Pin. The town council was previously run by the Singapore People's Party. "Step by step, we will have to solve it with sensitivity."

He added that needy families who have difficulties with payments are receiving help.

Two other town councils scored amber for corporate governance, due to "technical breaches". Ang Mo Kio Town Council was twice late in transferring funds to its sinking fund bank account as the authorised signatories were overseas at the time.

In one quarter, Chua Chu Kang Town Council did not transfer the correct sum to its sinking fund due to calculation errors.

Town councils were also rated on estate cleanliness, lift performance and estate maintenance. All did well and had the green banding for the first two areas.

But 11 out of the 16 town councils had the amber banding when it came to estate maintenance.

Obstruction of common areas was the top problem, accounting for 32 per cent of all estate maintenance issues. Noting that items left in such areas are potential fire hazards and could hamper evacuations in emergencies, MND urged town councils to address the problem with residents.

This is a longstanding issue, said Chua Chu Kang Town Council chairman Zaqy Mohamad. "I think for many years, residents have become quite used to having flower pots and other things in the common corridors."

Town councils will have to work with residents to convey the importance of complying with fire safety codes, he added.

The full report can be found at www.towncouncils.sg

MND takes issue with town council's claim
WP-run council stopped reporting S&CC arrears 'months before AGO audit'
By Tham Yuen-C, The Straits Times, 14 Nov 2014

THE Ministry of National Development (MND) has taken issue with a claim by the Workers' Party-run town council that it could not submit its service and conservancy charges (S&CC) arrears report because its staff were tied up with work for an audit by the Auditor-General's Office (AGO).

It pointed out yesterday that the Aljunied-Hougang-Punggol East Town Council (AHPETC) stopped submitting its monthly S&CC arrears report to MND after April last year.

"This was many months before the AGO audit, which started only in February 2014," the ministry said in a statement.

As a result, it does not know AHPETC's current rate of arrears, MND said, adding that the last available report shows an arrears rate of 29.4 per cent.

The MND statement is the latest response in an exchange sparked by the release last week of the annual Town Council Management Report.

AHPETC received a red banding - the worst - for the management of S&CC arrears, and for corporate governance. It was the only one of 16 town councils to get the banding.

WP chief Low Thia Khiang had reportedly said that the poor financial management did not impact the council's operations and services, and thus did not affect the safety and the living environment of the residents.

This prompted Minister of State for National Development Desmond Lee to express concern last Friday about the town council's financial health and its "shocking" arrears rate.

Responding to Mr Lee earlier this week, AHPETC chairman Sylvia Lim cited the AGO audit as a factor for her town council not being able to submit its arrears reports on time.

She said that "in order to get the arrears reports into the format MND required, our staff needed to spend time doing manual sorting and counting".

But, she added: "Our finance team had to prioritise the audit by our commercial auditors and then the AGO audit."

Last night, Ms Lim told The Straits Times she had offered to submit the data as is to the MND in July, but was told it had to be in its required format.

The MND, in its response, said "all town councils report their S&CC arrears rate monthly, using a simple table, stating how many households owed S&CC and for how long".

It added that AHPETC had done so as well, until April last year.

The AGO's audit of AHPETC's financial statements for the financial year 2012/2013 was ordered by Finance Minister Tharman Shanmugaratnam in February this year, after an independent auditor expressed concern about its accounts. The audit is still ongoing.

Besides the arrears report, Mr Lee also raised other issues related to the arrears in his statement last Friday.

He said the arrears rate of 29.4 per cent effectively meant that 39,000 households were subsidising 16,000 households, and warned that the town council's finances "must surely decline" if the trend continues.

He also noted that when Hougang Town Council was run separately, under Mr Low, it had the highest arrears rate among all town councils and had almost run into cash-flow problems, he added.

This was avoided, he said, only when Hougang Town Council merged with that of Aljunied GRC after the 2011 General Election, and their finances were co-mingled.

Ms Lim replied that the town councils had merged to take advantage of economies of scale.

She also said AHPETC was studying data on its overdue S&CC, and would address the issue after the AGO's audit on its financial statements was completed and made public.

She declined to give more details on the numbers cited by Mr Lee.

'Shocking' rise in WP town council arrears
AHPETC finances may be worse than stated, says Desmond Lee
By Lim Yan Liang, The Straits Times, 8 Nov 2014

THE sharp increase in the service and conservancy charge (S&CC) arrears of the Aljunied-Hougang-Punggol East Town Council is "shocking", Minister of State for National Development Desmond Lee said last night.

He indicated that the financial position of the Workers' Party-run council might be worse than stated, given that it had not submitted statements for the 2013 financial year despite reminders.

Mr Lee was critical of WP chief Low Thia Khiang's recent comments that S&CC arrears were a common problem - something he had also experienced in his previous Hougang constituency - and that residents would eventually pay up.

The severity of the arrears came to light in the annual report card on how town councils had performed in five areas.

The Aljunied-Hougang-Punggol East Town Council (AHPETC) received a red rating for S&CC arrears as well as for corporate governance.

Mr Low, in comments on the rating reported by the Lianhe Zaobao Chinese daily on Wednesday, said poor financial management did not impact the council's operations and services - and so did not affect the safety and living environment of the residents.

Mr Lee said he was taken aback by Mr Low's comments.

While some arrears could be because of some residents in temporary financial difficulty, the high rate suggested that residents who could pay were not doing so.

"As at April 2013 (when his town council last reported a shocking arrears rate of 29 per cent), 39,000 households in AHPETC were effectively subsidising 16,000 households who did not pay their S&CC," Mr Lee said in response to media queries.

"If this trend continues, the council's finances must surely decline and the council will not be able to sustain its operations. The delivery of essential services must then be affected, to the detriment of residents," he added, noting that the councils had to replace critical infrastructure - lifts and water tanks, for instance - at their own expense.

Mr Lee revealed yesterday that Mr Low, an MP for Aljunied GRC, had taken a similar approach to S&CC arrears management at the then Hougang Town Council. Its arrears rate in 2010 was 7.8 per cent - the highest then among all the town councils.

What Mr Low did not disclose at the time was that even the council's independent auditor had raised concerns over whether it had enough funds to support its daily operations, as it had a net operating deficit of about $92,000 and an accumulated deficit of about $9,000, said Mr Lee.

"What Mr Low also did not disclose is that Hougang managed to avoid a cash flow problem only after he merged Hougang with Aljunied after GE 2011," said Mr Lee.

But within two years, the new AHPETC's financial position deteriorated rapidly. Before that, Aljunied, under the People's Action Party, had an operating surplus of $3.3 million. But the merged entity had a deficit of $734,000 in the 2012 financial year.

He said the council's financial situation might be worse. It has not submitted financial statements and the Auditor-General is looking into the matter. Said Mr Lee yesterday: "And yet Mr Low says AHPETC 'has no cash flow problems'. I hope he is correct."

Neither Mr Low nor AHPETC responded to media queries by press time.

Sharp increase in AHPETC arrears has 'serious implications' for residents: Desmond Lee
Channel NewsAsia, 7 Nov 2014

Minister of State for National Development Desmond Lee has said he is taken aback with Workers' Party chief Low Thia Khiang's remarks to the media that residents of his Aljunied-Hougang-Punggol East Town Council need not worry about its poor performance in service and conservancy charges (S&CC) arrears management and corporate governance.

The Workers' Party-managed town council (TC) was the only one out of 16 which was banded "red" in the recently released Town Council Management Report.

On Friday (Nov 7), the Ministry of National Development released a statement from Mr Lee where he took issue with Mr Low's comments in a Lianhe Zaobao article dated Nov 6. "He explained that poor financial management does not impact the TC’s operations and services, and therefore residents’ safety and the living environment. He added that S&CC arrears were a common problem, which he also experienced in Hougang, and that residents would eventually pay up; 'it was a matter of time'," said the Minister of State.

Mr Lee said he disagreed with Mr Low's "sanguine assessment", and said the sharp increase in S&CC arrears has serious implications for residents. Part of Mr Lee's statement is reproduced below:

"As at April 2013 (when his TC last reported a shocking arrears rate of 29 per cent), 39,000 households in AHPETC were effectively subsidising 16,000 households who did not pay their S&CC.

If this trend continues, the TC’s finances must surely decline and the TC will not be able to sustain its operations. The delivery of essential services must then be affected, to the detriment of residents. We should bear in mind that all TCs have to replace at their own cost, critical infrastructure, like lifts and water tanks and carry out all sorts of other building, mechanical and electrical repairs.

Mr Low disclosed that Hougang TC had a similar approach to S&CC arrears management. Indeed, its S&CC arrears rate was 7.8 per cent in FY10, the highest amongst all TCs.

But what Mr Low did not disclose is that in the same year, Hougang TC’s own independent Auditor raised concerns regarding the adequacy of the TC’s operating funds to support its daily operations. This is because Hougang TC’s finances were in deficit – it had by then wound up with a net operating deficit of about S$92,000 and an accumulated deficit of about S$9,000.

What Mr Low also did not disclose is that Hougang managed to avoid a cash flow problem only after he merged Hougang with Aljunied after GE 2011. The two TCs’ finances were then co-mingled. Before merger, Aljunied had an operating surplus of $3.3m. Within two years, the merged AHPETC’s financial position has deteriorated rapidly. The operating surplus of $3.3m Aljunied had in FY10 had turned into an operating deficit of S$734,000 in FY12.

AHPETC’s financial position today may in fact be worse. For the TC has not submitted its FY13 financial statements, despite repeated reminders. It has also stopped submitting its monthly S&CC arrears report since May 2013, again despite repeated reminders. This was 10 months before the AGO Audit started in Feb 2014, so it could not be because of the AGO Audit.

And yet Mr Low says AHPETC “has no cash flow problems”. I hope he is correct.”

AHPETC 'to address arrears issue after audit'
By Tham Yuen-C, The Straits Times, 11 Nov 2014

THE town council run by the Workers' Party (WP) is studying data on its overdue service and conservancy charges (S&CC), and will address the issue after audits on its financial statements are completed and made public, its chairman, Aljunied GRC MP Sylvia Lim, said last night.

She declined to give detailed responses to questions on the financial health of the Aljunied- Hougang-Punggol East Town Council (AHPETC), saying the party would do so after the Auditor-General's Office (AGO) has completed the audit on its financial statements.

The council received a red banding - the worst - for the management of S&CC arrears, and for corporate governance in the latest Town Council Management Report issued by the Ministry of National Development (MND). It was the only one of 16 town councils to get the banding.

Minister of State for National Development Desmond Lee said last Friday that the council's 29 per cent arrears rate was shocking. It suggested 16,000 out of 55,000 households were not paying their S&CC. The council's finances could decline if the trend continued, affecting residents. He noted that the council had not filed statements for the 2013 financial year and its monthly S&CC arrears reports since May last year, despite reminders.

While Ms Lim declined to comment on the council's financial position, she said it had been transparent and open to scrutiny by the AGO.

As for not submitting statements, she said its finance team was strapped preparing documents for the AGO. Thus, its own audit was delayed. She said MND had been informed of it.

AGO is auditing AHPETC's financial statements for financial year 2012/2013 after an independent auditor expressed concern about its accounts.

Mr Lee also said that Hougang Town Council, when run by WP chief Low Thia Khiang, chalked up high S&CC arrears and avoided cash flow problems only after merging with Aljunied, following the 2011 General Election. Last night, Ms Lim said the councils merged to take advantage of economies of scale.

WP town council 'served residents well'
Png Eng Huat points to good performance in several areas after red marks in report
By Lim Yan Liang, The Straits Times, 7 Nov 2014

THE Workers' Party-run Aljunied- Hougang-Punggol East Town Council brushed aside its poor ratings in an annual report on how town councils are managed, and pointed instead to how well it did in areas that had an impact on residents' lives.

Town council vice-chairman Png Eng Huat said in a telephone interview yesterday that the National Development Ministry's report showed the council "did pretty well in the areas of cleanliness, maintenance and lift performance".

"There are areas with red bands that we acknowledge, and we are looking into how to improve them going forward."

The council was the only one of 16 to receive a red banding - the worst rating - for management of service and conservancy charges (S&CC) arrears, and corporate governance. It received an amber rating for estate maintenance, along with 10 other councils.

The report, covering the financial year from April last year to March this year, assesses town councils' performance in five areas.

Pointing to the green - or best rating - it received for estate cleanliness and lift performance, Mr Png said: "The most important thing is we still will work hard to keep the estate clean and maintain it well. Things like living conditions, the environment, are very important. The lifts as well. When you have a breakdown, you really need to get it fixed ASAP. These are things we will certainly improve on."

Mr Png, MP for Hougang, declined to say why the council scored red in two areas: "There is a detailed report we are studying. We are still looking into it so I can't comment further."

The report noted that nearly three in 10 households under the council had overdue S&CC for three months or more. It said the "sharp decline" in the council's S&CC arrears situation was "of grave public concern".

Asked if the level of overdue charges would affect the council's work, Mr Png said the arrears rate may not be up to date as the figure in the report was from April last year.

From May last year, the council also stopped sending its monthly S&CC arrears report to the ministry despite reminders. Asked why, he said it had "prioritised resources for the Auditor- General's Office (AGO) audit".

In February, Deputy Prime Minister and Finance Minister Tharman Shanmugaratnam directed the AGO to look into the council's accounts, after an independent auditor raised questions over the reliability and accuracy of its financial and accounting systems.

WP 'must explain town council's finances'
By Charissa Yong, The Sunday Times, 16 Nov 2014

The Workers' Party owes residents an explanation for the state of its town council's finances, said former People's Action Party (PAP) chairman Lim Boon Heng yesterday.

The opposition-run town council's swing from an operating surplus to a deficit in the short span of three years is worrying, he said at a community event in Aljunied.

"It begs many questions," he told reporters present.

The Aljunied Town Council had an operating surplus of $3.3 million in the 2010 financial year, when it was under the PAP.

But after the Workers' Party defeated the PAP in Aljunied GRC in the 2011 General Election and won the by-election in Punggol East last year, the merged Aljunied-Hougang-Punggol East Town Council (AHPETC) was formed.

The WP-run town council had a deficit of $734,000 in the 2012 financial year. It also had a service and conservancy charges arrears rate of 29.4 per cent as of last year.

Mr Lim said: "I'm personally quite disturbed. To be in arrears by so much means that things are getting out of control.

"If it's less than 10 per cent, you can probably manage. But once you go beyond that, you have to worry. And beyond 20 per cent, I think, is alarming."

He said that having run a town council before - in Ang Mo Kio - he knew that if arrears "go beyond a certain tipping point, you've lost control". "And when you've lost control, then things are going to be very difficult to manage."

Mr Lim, who was the one who suggested having town councils back in 1984, said they tested the ability of Members of Parliament to manage the affairs of the people.

"And if they can't even manage a simple thing like a town council, then it begs the big question: If you put them in charge of the country, what will be the outcome?" he asked.

Contacted last night, AHPETC chairman Sylvia Lim said that the town council will respond in due course. She has previously said that the town council is checking the arrears data and will address the matter.

Present at yesterday's Aljunied event were the PAP branch chairmen in the GRC, all long-time party activists : Mr Victor Lye in Bedok Reservoir-Punggol; Mr K. Muralidharan Pillai in Paya Lebar; Ms Chan Hui Yuh in Serangoon; Mr Kahar Hassan in Kaki Bukit; and Mr Chua Eng Leong in Eunos.

Mr Lim said they and the party's activists have been meeting and working with people there.

The branch chairmen co-organised yesterday's event, a family day with performances feting seniors.

It was attended by 2,000 residents, grassroots leaders and volunteers, as well as Speaker of Parliament Halimah Yacob.

MND discloses how it computes govt grants to town councils
Funding for town councils based on flat types, number of units: MND

The Ministry for National Development has clarified why the Aljunied-Hougang-Punggol East Town Council received smaller government grants of S$7.3 million for FY2011 and FY2012 compared to S$26.7 million in FY2010.
Channel NewsAsia, 20 Nov 2104

The funding for town councils is based on the number of HDB flat units and flat types in an area, said the Ministry of National Development (MND) on Thursday (Nov 20). MND said this, in response to media queries on government grants for town councils.

Questions have been raised in various forums on the grants given to the Aljunied-Hougang-Punggol East Town Council (AHPETC) run by the opposition Workers' Party in comparison to other town councils run by the ruling People's Action Party (PAP). Some alleged that government grants helped PAP-run town councils run an operating surplus instead of a deficit.

This comes after Minister of State for National Development Desmond Lee highlighted AHPETC's finances recently, saying its sharp increase in service and conservancy charges (S&CC) arrears has serious implications for residents.

MND had said AHPETC's poor performance in the annual Town Council Management Report released earlier this month (Nov 4) was of "grave public concern". The report banded AHPETC “red” in corporate governance and S&CC arrears management, as its arrears rate rose to 29.4 per cent as at end-April 2013.

MND's replies are reproduced below.

Question: How is the S&CC Operating Grant computed?

MND Answer: The S&CC operating grant is allocated to all Town Councils (TCs) based on the number of HDB flat units and the flat types. Smaller flat types get higher grants.

The grant enables TCs to subsidise the S&CC for residents living in 4-room and smaller flats, with more being allocated for 1-room (S$33.70 per month), 2-room (S$26.20 per month) and 3-room (S$17.00 per month) households. The grant for each 4-room household is S$9.00 per month.

This grant formula has been in place since 1999, and is applied consistently to all TCs. S&CC grants are not based on the number of voters, nor does it apply to private property residents. TCs will receive more grants if they have more and smaller HDB flat types.

Ang Mo Kio TC and Tanjong Pagar TC receive more grants than AHPETC because they have more and smaller HDB flats. Ang Mo Kio has 89,127 HDB flats, of which 39 per cent are 3-room or smaller. Tanjong Pagar has 75,050 HDB flats, of which 59 per cent are 3-room or smaller. In comparison, AHPETC has 71,760 flats, of which only 29 per cent are 3-room or smaller. Likewise, even though Chua Chu Kang has about the same number of HDB flats (71,348) as AHPETC, Chua Chu Kang receives less S&CC grant (S$4.9 million compared to AHPETC’s S$7.2 million), because only 12 per cent of its flats are 3-room or smaller.

Question: What is the difference between Operating Surplus and Accumulated Surplus?

MND Answer: The operating surplus = income – expenditure for any one year. The TC’s operating surplus for that year is not affected by the transfer to the Sinking Fund under Section 34 of the TCs Act.

The accumulated surplus is the amount of operating surplus cumulated over the years. Under Section 34 of the TCs Act, all TCs have to transfer the stipulated amount of their accumulated surplus to their Sinking Fund after an election. This is the TC’s own Sinking Fund. The TC can use this to pay for future major repair and repainting works. After GE 11, Aljunied transferred S$3.7 million Accumulated Surplus (80 per cent of total Accumulated Surplus) to its Sinking Fund, as required by law.

Question: If Aljunied had transferred its accumulated surplus to its own Sinking Fund, can MND clarify MOS Desmond Lee’s remarks about the operating surplus under Aljunied vis-à-vis the operating deficit under AHPETC? Why is it that the Aljunied TC got S$26.7 million in government grants in FY2010/2011, then a much lower $7.3 million in both FY 2011/2012 and FY2012/2013?

MND Answer: MOS Desmond Lee stated in his statement of 7 Nov 2014: “What Mr Low (Thia Khiang) also did not disclose is that Hougang managed to avoid a cash flow problem only after he merged Hougang with Aljunied after GE 2011. The two TCs’ finances were then co-mingled. Before merger, Aljunied had an operating surplus of S$3.3 million. Within two years, the merged AHPETC’s financial position has deteriorated rapidly. The operating surplus of S$3.3 million Aljunied had in FY10 had turned into an operating deficit of S$734,000 in FY12.”

MND has observed that AHPETC’s financial position has deteriorated rapidly, based on AHPETC’s own financial statements. Despite an increase in income (AHPETC’s income in FY12 was S$29.8 million, compared to $26.8 million in FY10, a 11 per cent increase), its expenditure increased more significantly (its expenditure in FY12 was S$35.4 million, compared to $27.3 million in FY10, a 30 per cent increase). Its operating deficit before grants was $5.6 million in FY12 compared to $500,000 in FY10 (1,120 per cent increase). After grants and less transfers, it ran an operating deficit of S$734,000 in FY12 compared to a surplus of S$3.3 million in FY10.

Of the S$26.7 million in government grants received by Aljunied in FY10, S$19.2 million was a one-off grant to help TCs offset the cost of the Lift Upgrading Programme. So the perceived drop in government grants after FY10 is due to the one-off grant (Hougang TC, under the Workers’ Party, also received S$5 million in FY10).

Question: Can MND share the table which AHPETC used to report its S&CC arrears for the month and the TC’s Apr 2013 report (the last instance in which MND said AHPETC reported its monthly arrears)?

All TCs submit their S&CC arrears report monthly, using the same table. The table is simple (sample below), and has been in use by all TCs including Hougang Town Council since Apr 2008. In fact, AHPETC used the form for some months till Apr 2013 when it reported an arrears rate of 29.4 per cent. Since then, the TC did not submit the monthly returns. Based on the TC’s last reported S&CC arrears rate of 29.4 per cent, 39,000 households in AHPETC were effectively subsidising 16,000 households who did not pay their S&CC.

MND notes from AHPETC’s submission that 10,000 (63 per cent) out of the 16,000 households only started owing arrears in the last two years. AHPETC’s report also showed that the arrears rate for hawkers was 8.2 per cent while that for commercial tenants was 50.2 per cent. The TC stopped submitting the required monthly S&CC arrears report to MND after Apr 2013. We do not know AHPETC’s current arrears rate.

Question: What can MND do if a TC refuses to submit the required information?

MND Answer: Under the TCs Act today, MND has no power to compel TCs to submit information to MND, and there is no penalty under the TCs Act if the TC does not do so. There are currently only three offences that attract fines – these relate to the misuse of TCs’ funds, contravention of TC-Lift Upgrading Programme (LUP) rules and the wilful withholding of information required by an auditor without reasonable cause. This is because the TCs are supposed to be directly accountable to their residents. MND is reviewing the TCs Act with a view to strengthen regulatory oversight over the TCs, to better safeguard residents’ interests.

Call for answers on arrears issue from Aljunied residents
By Kelly Ng, TODAY, 21 Nov 2014

While they were largely sympathetic towards those in genuine need who cannot pay their service and conservancy charges (S&CC), some residents living in estates managed by the Aljunied-Hougang-Punggol East Town Council (AHPETC) whom TODAY spoke with have urged it to be more transparent about the source of its high arrears rate and what it is planning to do to tackle the problem.

Calling on the town council to share more information about the issue, the residents said they wanted to know, for example, who are those who are not paying, why they are not doing so and what is being done about those in need.

Reactions culled from street interviews with 30 residents living in the estates showed that many adopted a sympathetic bent, but only if it involves those who are genuinely in need and cannot afford to pay. In such cases, they said, more should be done to help those in need.

Nevertheless, eight residents felt that whatever the case was, AHPETC needed to be more transparent about the issue.

Said Mr Christopher Tan, 26, who lives in a three-room flat in Hougang: “We have to pay our dues whether others do or not, so I don’t think it is unfair. But I would want to know why people aren’t paying up and how long the arrears have been overdue.”

Mr Ng Soon Huat, 58, a Bedok Reservoir resident who works in the hotel industry, added: “I’ll want to know why there’s such a big proportion (of residents in arrears)? Why will they not want to pay?”

Another resident, Ms Carmen Chen, 31, a social worker who lives in Hougang, also wanted greater clarity.

“This will probably clear up any ambiguous guesses by the public or residents staying in the areas,” she said, while adding that the town council had done “good work” in maintaining the estate.

Political watchers contacted also raised the transparency issue. Singapore Management University law don Eugene Tan, for instance, called on town councils in general to provide a breakdown on the overdue amounts.

“Assuming a uniform profile of HDB dwellers across the island, why does AHPETC have a much higher proportion of arrears?” he said.

“A compassionate, or more lenient, approach in collecting S&CC may impose an unfair burden on those who pay their dues in a timely manner ... a pragmatic approach, while efficient, can come across as cold, administratively unforgiving.”

Institute of Policy Studies’ senior research fellow Dr Gillian Koh added: “... some may think that the WP is compassionate and even hope arrears in S&CC owed may be forgiven. Others may feel that ... it is not fair if some pay and others don’t, especially since the government now already gives GST vouchers, so that the poor are already assisted with their S&CC.”

Dr Koh cited former opposition Member of Parliament Chiam See Tong, who was known to have charged lower S&CC for his Potong Pasir constituency years ago, but that also meant his estate’s quality of services would differ.

“That can be another approach, but at least it is a declared one and everyone then pays an equally lower charge,” she said.

The town council has been largely silent on the issue so far. Last week, its chairman Sylvia Lim said the matter would be addressed after audits on its financial statements are completed and made public.

In response to TODAY’s queries, AHPETC’s vice-chairman Pritam Singh reiterated that the town council is “currently checking the S&CC arrears data and will address this matter in due course”.

‘No error’ in transfer of surpluses to AHPETC Sinking Fund: MND
The transfer of S$3.7 million – or 80 per cent of Accumulated Surplus – to the Workers’ Party-managed Sinking Fund following the 2011 General Election was in accordance with the Town Councils Act, the Ministry of National Development says.
Channel NewsAsia, 21 Nov 2014

The Ministry of National Development (MND) on Friday (Nov 21) confirmed that the transfer of S$3.7 million – or 80 per cent of Accumulated Surplus – to the Workers’ Party-managed Sinking Fund following the 2011 General Election was in accordance with the Town Councils Act.

Following the MND clarification on Thursday that funding for Town Councils is based on the number of HDB flat units and types in a given estate, sociopolitical website theonlinecitizen had asked if a factual error had been made, citing a segment of the Town Councils Act which states: "If the Member or Members elected and the previous Member or Members for the constituency stood in elections for different political parties – all its surpluses relating to such area of the Town comprised in that constituency shall be transferred to the prescribed sinking funds of the Town Council relating to that area."

However, the MND on Friday noted that that was “no error” in the original response, as under Section 34 (4) of the act, should the area of a town be changed due to electoral boundary changes, the 80 per cent figure applies.

Under the Act, it states: “Where the boundaries of any constituency within a Town are altered under the Parliamentary Elections Act and there is an election in any or every new constituency so formed … the Town Council shall transfer 80% of its surpluses to the prescribed sinking funds of the Town Council.”

AHPETC yet to explain serious financial mismanagement: Desmond Lee
TODAY, 21 Nov 2014

Minister of State (National Development) Desmond Lee today (Nov 21) issued a statement on the high service and conservancy charge (S&CC) arrears rates at Aljunied-Hougang-Punggol East Town Council (AHPETC). Among the issues raised, Mr Lee questioned the delay in explaining the arrears rates and noted that while AHPETC chairman Sylvia Lim cited the Auditor-General’s Office (AGO) audit as a reason for the town council not being able to submit its arrears reports on time, the town council had stopped providing the data 10 months before the AGO audit started.

Here is the statement by Minister of State (National Development) Desmond Lee in full:

“AHPETC has yet to explain its serious financial mismanagement, and the S&CC arrears. Instead, we have seen a coordinated online campaign to distract the public, using falsehoods, half-truths and speculations, by friends, sympathisers and proxies of the Workers’ Party (WP). The aim is to confuse the public and distract them from the real issues. MND has addressed these untruths. This is what the WP often does when caught under the spotlight – raise a flurry of red herrings in the hope that people forget that they have not come clean.

The key issue is accountability and transparency.

By its own admission, the AHPETC has seen 29.4 per cent of its residents owing S&CC for three months or more. That was in Apr 2013, a sudden spike beyond the already high arrears rates consistently reported in the TC’s previous submissions.

How did this happen? And what is the current arrears rate?

Only the TC knows the answer, but it refuses to answer. Why? Ms Sylvia Lim and Mr Pritam Singh have said they will give answers in “due course”. Why the delay and obfuscation?

Since May 2013, AHPETC has stopped submitting its S&CC arrears data to MND. It now also refuses to tell the public the truth. Ms Sylvia Lim has given the excuse that this is because they are busy with the AGO Audit. How can this be the reason, when the TC stopped providing the data 10 months before the AGO Audit even started? And surely the TC must know the arrears position, whether or not an Audit is in progress?

There are other concerns. AHPETC received the same S&CC grants in FY12 that it got before the 2011 General Election. Yet, in FY10 the TC ran an operating surplus of S$3.3m, but in FY12 it ran a deficit of S$734,000. Why did this happen? Is the S&CC from Aljunied GRC residents being used to cover the deficit in Hougang TC? (In FY10, Hougang TC had an operating deficit of S$92,000.) If so, surely residents of Aljunied GRC are entitled to know?

Just as the TC had not answered questions raised by their own Auditors, Foo Kon Tan Grant Thornton, it has also not answered questions from the public about the state of its finances today.”

WP yet to respond on town council's finances: Desmond Lee
By Tham Yuen-C, The Straits Times, 22 Nov 2014

THE Workers' Party (WP) has yet to respond on the financial state of its Aljunied-Hougang-Punggol East Town Council (AHPETC), Minister of State for National Development Desmond Lee said last night.

It instead launched a "coordinated online campaign to distract the public, using falsehoods, half-truths and speculations, by friends, sympathisers and proxies".

"This is what the WP often does when caught under the spotlight - raise a flurry of red herrings in the hope that people forget that they have not come clean," he said in a second statement in as many weeks on the issue of AHPETC's finances.

Mr Lee noted the Ministry of National Development (MND) had addressed these "untruths".

In a statement on Thursday, the MND outlined how grants are disbursed to all town councils, how surpluses are used, and detailed aspects of AHPETC's income and expenditure.

The town council was red flagged over a sharp increase in its service and conservancy charges (S&CC) arrears and for corporate governance, in the latest annual report on town councils.

Contacted last week, AHPETC chairman and Aljunied GRC MP Sylvia Lim said the town council was studying S&CC data and would respond after the Auditor-General's Office (AGO) ends its audit into AHPETC's financial statements.

Mr Lee said yesterday accountability and transparency were key issues. About one-third of residents defaulted on S&CC payments based on an arrears report by AHPETC in April last year. This was "a sudden spike beyond the already high arrears rates" that it consistently reported, he said. "How did this happen? And what is the current arrears rate? Only the town council knows the answer, but it refuses to answer. Why?" he said.

He added that it now "refuses to tell the public the truth".

He was also critical of Ms Lim's explanation for AHPETC failing to submit arrears reports since May last year. She said its finance team was busy with the audit by the AGO and its own commercial audit, and did not have time to prepare the reports.

Describing this as an "excuse", he said AHPETC stopped sending arrears reports 10 months before the AGO audit started. Also, it ought to know the state of arrears whether or not an audit was going on.

He also asked if S&CC grants to AHPETC were used to cover a deficit in Hougang Town Council. He said Aljunied Town Council had an operating surplus of $3.3 million in financial year 2010 - when it was under the People's Action Party. But by financial year 2012 - under the WP - it had an operating deficit of $734,000.

After the 2011 General Election, the WP merged Aljunied and Hougang town councils. It later added Punggol East after winning a by-election there in January last year.

On Nov 7, Mr Lee said Hougang - under WP chief Low Thia Khiang until 2011 - managed to avoid a cash flow problem only after merging with Aljunied.

He said yesterday that Aljunied residents had a right to know what happened.

Last night, AHPETC vice-chairmen Pritam Singh and Png Eng Huat said the town council "has not obfuscated or intentionally delayed" responding on matters Mr Lee raised.

"(The town council has) made it known to the public that we are looking into the S&CC arrears data, and will respond to the query on the financial and arrears situation in due course."

They were also surprised Mr Lee saw it as an issue of transparency and accountability as AHPETC's accounts were made available to the AGO - and they expect it to be made public when the audit ends.

No takers for AHPETC managing agent role
WP town council looking at options including directly managing estates
By Tham Yuen-C, The Straits Times, 6 Dec 2014

A TENDER by the Workers' Party (WP), seeking a managing agent for its Aljunied-Hougang-Punggol East Town Council (AHPETC), closed after three weeks without a bid from any company, including its current managing agent.

The tender, advertised in The Straits Times and on the town council's website, closed on Monday. It was opened on Nov 7.

Yesterday, AHPETC chairman and Aljunied GRC MP Sylvia Lim said the town council is looking at a few options.

It could extend the contract with its current managing agent FM Solutions and Services (FMSS), which expires in July next year, or conduct another tender, she said.

Alternatively, the town council may directly manage the estates under it, instead of outsourcing the work to a managing agent.

Among the 16 town councils in Singapore, only the Bishan-Toa Payoh Town Council, run by the People's Action Party (PAP), does not use a managing agent.

The last time the WP called a tender for a managing agent was in April 2012 and it received only one bid - from FMSS.

The company was the town council's existing managing agent then, after it was appointed to the role by the WP in 2011.

The WP was criticised for making the appointment without calling for a tender, as was done by most town councils when hiring managing agents.

But the party cited time constraints as it had to take over the town council from the PAP on Aug 1, about three months after the 2011 General Election.

FMSS managing director Danny Loh could not be contacted yesterday on why his company did not submit a bid this time.

In recent weeks, AHPETC had been in the news over its performance in the latest annual report on town councils.

It got the worst banding for the management of arrears in service and conservancy charges, and for corporate governance.

This resulted in the Ministry of National Development raising concerns about the town council's financial health.

* WP-run town council acts on S&CC owed
By Tham Yuen-C, The Straits Times, 15 Jan 2015

THE town council run by the Workers' Party (WP) has taken steps to collect some of the service and conservancy charges (S&CC) it is owed, but says it will take legal action only when all else fails.

Mr Png Eng Huat, vice-chairman of the Aljunied-Hougang- Punggol East Town Council (AHPETC), told The Straits Times yesterday that legal proceedings are started "as a last resort after some time has elapsed".

"From the first reminder right up to the legal letter sent to the resident, there are ample time and opportunities for the resident to make payment or negotiate a payment plan with the town council," he said.

He added that residents can also approach their MP for help.

AHPETC has come under fire for failing to collect payments for S&CC on time.

In the latest annual town council report released last November, the town council was given the worst banding for its management of S&CC arrears and for corporate governance.

Mr Png said yesterday that since 2012, the town council has been looking into the cases of residents who owe S&CC.

Some of them had approached the People's Action Party (PAP) branch chairmen in Aljunied GRC for help after receiving lawyers' letters of demand from AHPETC in the last few months, according to a report on Tuesday in Chinese-language daily Lianhe Zaobao.

Post by Lianhe Zaobao.

Mr Chua Eng Leong, who is the PAP branch chairman in the Eunos ward, told The Straits Times yesterday that he had been approached by 12 such residents since last September. Many had not paid their S&CC for more than a year, he said.

One woman had stopped paying since July 2011, and owed AHPETC about $2,800. Last month, she received a summons to attend court over the matter.

Mr Chua said: "A lot of them are in financial difficulties and they tell me all of a sudden, without warning, they were sent these letters."

Asked about it, Mr Png said that, for a start, the town council typically sends reminders to residents who do not pay their S&CC.

"The town council is mindful of its responsibility to collect charges owed and has sought to strike a balance and exercise compassion," he added.

Last November, AHPETC chairman Sylvia Lim had said the town council would address the issue of the S&CC arrears after the Auditor-General's Office had completed the audit of the town council's financial statements and made them public.

** Workers' Party town council says S&C arrears of 29.4% incorrect, due to human error
By Tham Yuen-C, The Straits Times, 27 Jan 2015

THE Workers' Party (WP) yesterday blamed human error for its town council's erroneous reporting of a high arrears rate in the payment of service and conservancy (S&C) charges, a situation that drew flak from some government leaders.

The chairman of the Aljunied-Hougang-Punggol East Town Council (AHPETC), Ms Sylvia Lim, shedding light on the controversy for the first time since it erupted last year, said the rate of 29.4 per cent given in its April 2013 arrears report was "an instance of reporting and human error".

She did not say what the actual rate should be.

But a table given in yesterday's statement - and which had been submitted to the Housing Board in 2013 - shows AHPETC was owed about $1.9 million in S&C charges in April 2013, less than the $2 million owed in March 2013 when it reported an arrears rate of 7.42 per cent.

That being the case, its arrears rate in April 2013 should have been lower than 7.42 per cent.

"A comparison of the arrears report submitted for March 2013 and April 2013 would have shown up the error," said Ms Lim, an MP for Aljunied GRC.

"Unfortunately, everyone did not notice the anomaly in the April 2013 report that was later published in the Town Council Management Report.

"We acknowledge the oversight, and regret the error in reporting to HDB."

AHPETC had come under fire for not collecting S&C payments on time after the National Development Ministry said last November that the council had failed to submit monthly arrears reports since April 2013. That was soon after the annual report card on the performance of all town councils showed AHPETC getting the worst banding for its management of S&C arrears and for corporate governance.

Yesterday, Ms Lim also gave the town council's latest S&C arrears rates as at end-September last year. They were 5.66 per cent for homes and 7.24 per cent for businesses.

She said AHPETC had taken some time to give the information, as it had engaged a consultant to review its data and processes. The review shows its staff, who had manually prepared the S&C arrears reports, had left out an "additional step of sorting to avoid double-counting of the same household".

She also said the staff had to extract, sort and count data generated by the IT system, as AHPETC did not have a "fully operational computer system" that could aggregate S&C arrears reports in the required format.

This had also resulted in the town council submitting its arrears reports late, she added.

She acknowledged the manual process is "not the most ideal and efficient way of doing aggregated arrears reporting, as the data size is voluminous".

But since last November, AHPETC has developed and tested a new module for its IT system that would let it aggregate S&C data in various combinations.

"This enhancement will improve productivity in reporting. AHPETC will strive to make further improvements to better serve its residents," said Ms Lim.