# MND’s 1 July Reply to Media Queries on AHPETC's FY2013 Financial Statements

- **Source:** Ministry of National Development
- **Published:** 2015-07-01T13:00:00.000Z
- **Author:** Ministry of National Development
- **Original:** https://www.mnd.gov.sg/newsroom/press-releases/view/mnds-1-july-reply-to-media-queries-on-ahpetcs-fy2013-financial-statements
- **Topics:** Market Updates

## Featured rationale

The deterioration and audit concerns could weaken confidence in estate governance, potentially increasing pressure for tighter oversight of maintenance funds and resident-paid service charges.

## AI summary

AHPETC reported a $2.01 million FY2013 operating deficit and $1.42 million accumulated deficit after submitting qualified financial statements 10 months late.

## Original article

All Town Councils (TCs) were required to submit their audited financial statements and reports for Financial Year (FY) 2013 to the Ministry of National Development (MND) by 31 August 2014. After repeated reminders and a delay of 10 months, the Aljunied-Hougang-Punggol East Town Council (AHPETC) submitted to MND its FY2013 audited financial statements and reports on 30 June 2015. 

MND will study the financial statements and reports submitted but note the following: 

a. AHPETC’s FY13/14 financial statements are still qualified, with disclaimers of opinion (see Annex). This is the third consecutive year that AHPETC had received qualified statements from its own independent Auditors. 

b. The TC had not complied with the Town Councils Act and Financial Rules in various areas (see Annex).

c. AHPETC went from an annual operating surplus of $1.1mil in FY11 to a deficit of $1.53mil in FY12 and a larger deficit of $2.01mil in FY13. The TC had previously understated its annual operating deficit in FY12 by half. 

d. AHPETC had an accumulated deficit of $1.42mil in FY13, compared to a small accumulated surplus of $853,000 in FY12. The TC had previously overstated its accumulated surplus in FY12 as $1.84mil. 

e. AHPETC’s financial position has consistently deteriorated between FY11 and FY13, even though the TC received full government grants from MND during these three years. 

AHPETC’s latest financial statements and reports reinforce MND’s existing concern about the TC’s state of financial affairs.

Annex 

Audit Alliance LLP, the Auditors newly appointed by AHPETC, had flagged 8 areas of concern in AHPETC, including non-compliance with legal and regulatory requirements: 

a. Opening Balances. The Auditor was unable to determine if the FY13 opening balance was fairly stated. The Auditor also was unable to verify the accuracy of the amounts carried forward for certain receivables from stakeholders as well as payables to creditors and accrued expenses, which remained unresolved even after the AGO Report. 

b. Conservancy and Service Receivables. The Auditor was unable to determine the accuracy of the S&CC owed to the TC that was carried forward from the previous FY. 

c. Creditors and Accrued Expenses. The Auditor was unable to ascertain the completeness of the TC’s liabilities as at 31 Mar 2014 

d. Conservancy and Service Fees Received in Advance. The Auditor was unable to determine the accuracy of the S&CC paid in advance to the TC that was carried forward from the previous FY. 

e. Related Party Transactions. The Auditor found that the TC’s Deputy GM, who is a shareholder and director of FMSS, certified 12 invoices received from FMSS for MA services, totalling $2.1m, and subsequently approved the related payment vouchers. There was no segregation of duty between the person certifying the invoices and the person approving the related payment vouchers. The total RPT value increased to $8.5m in FY13, from $6.8m in FY12. 

f. Lapses in tender specifications prepared by MA. The Auditor found that the managing agent failed to declare whether the specifications gave preference to any particular tenderer, for 3 tenders. There was also no documentation on whether the tender specifications were approved by the Tenders and Contracts Committee of the TC. 

g. Transfer to Sinking Funds. The TC contravened the Town Council Financial Rules by failing to transfer due amounts into the bank account of the sinking funds. AHPETC’s transfers were up to 15 months late, and errors were discovered in the computation only after the AGO Audit. 

h. Wrong usage of Sinking Funds. The TC paid for town improvement expenses out of their sinking fund, which was not allowed under the Town Councils Act.

Background 

Each year, TCs are required to submit their audited financial statements, auditor’s report, and annual reports to the Ministry of National Development (MND), by 31 August, within five months of their financial year closure. MND will then table the reports to Parliament. A copy of the audited financial statements and any report made by the Town Council’s auditor shall also be forwarded to the Auditor-General. 

All TCs have been able to meet the submission deadline, except AHPETC. AHPETC have not submitted their reports on time ever since their formation in 2011. Their first set of reports for FY2011 was only submitted to MND on 11 January 2013, a delay of more than 4 months. Their second set of reports for FY2012 was submitted to MND on 10 February 2014, a delay of 6 months. 

In addition, for FY2011 and FY2012, AHPETC’s then-auditors, M/s Foo Kon Tan Grant Thornton LLP (FKT) had issued Disclaimers of Opinion for two consecutive years. FKT listed four areas of concern in its Disclaimers of Opinion for FY2011 and this increased to 13 areas of concern for FY2012. In audit terms, a Disclaimer of Opinion is a serious matter. It means that the auditors are unable to state that the financial statements provide a true and fair account of the TC’s financial position. In FY2012, FKT also issued a qualified opinion on AHPETC’s other legal and regulatory requirements, stating that AHPETC had not complied with the provisions of the Town Councils Act and Financial Rules in various respects. 

As the observations in AHPETC’s Auditor’s Reports raised serious questions about the reliability and accuracy of its financial and accounting systems, on 19 February 2014, the Auditor-General’s Office (AGO) was appointed to conduct an audit on AHPETC’s FY 2012/13 financial accounts. This was the first time in the history of TCs that the Auditor-General had undertaken a special audit on a TC to look into concerns about its financial circumstances, under Section 4(4) of the Audit Act. 

The AGO published its report on 9 February 2015. The AGO report identified many weaknesses and lapses in AHPETC, and concluded that until AHPETC addressed and rectified these weaknesses, “there can be no assurance that AHPETC’s accounts are accurate and reliable, or that public funds are properly spent, accounted for and managed.”. 

The AGO Report was debated in Parliament on 12 and 13 February 2015. AHPETC’s members who are also Members of Parliament, voted in support of a motion that expressed grave concern over the AGO’s report on AHPETC, and unanimously called on all TCs to uphold high standards of accounting, reporting and corporate governance. 

During the debate, the Minister for National Development stated that MND expected AHPETC to remedy the problems and weaknesses identified in the AGO Report, as well as submit an unqualified set of its FY2013/14 Audited Financial Statements and Reports by 30 June 2015 and its FY2014/15 Audited Financial Statements and Reports by 31 August 2015. AHPETC was also called upon to take steps to ascertain if TC monies (which include government grants and service and conservancy charges collected from the residents and businesses in the towns under AHPETC’s charge) had been improperly paid out, and if necessary to take action to recover such payments.

## Chinese translation

> Translation model: grok_cli

### 国家发展部7月1日就阿裕尼-后港-榜鹅东市镇理事会2013财政年度财务报表的媒体询问回复

所有市镇理事会（TCs）须于2014年8月31日前提交2013财政年度（FY）经审计财务报表及报告予国家发展部（MND）。在多次催促及延迟10个月后，阿裕尼-后港-榜鹅东市镇理事会（AHPETC）于2015年6月30日向国家发展部提交其2013财政年度经审计财务报表及报告。

国家发展部将研究所提交的财务报表及报告，但注意到以下事项：

a. AHPETC的2013/14财政年度财务报表仍为保留意见，并附有无法表示意见的声明（见附件）。这是AHPETC连续第三年从其本身独立审计师处获得保留意见报表。

b. 该市镇理事会在多个方面未遵守《市镇理事会法令》及财务规则（见附件）。

c. AHPETC从2011财政年度的年度营运盈余110万元，转为2012财政年度赤字153万元，以及2013财政年度更大的赤字201万元。该市镇理事会此前将其2012财政年度年度营运赤字少报了一半。

d. AHPETC在2013财政年度累计赤字142万元，相较2012财政年度小幅累计盈余85.3万元。该市镇理事会此前将其2012财政年度累计盈余多报为184万元。

e. 尽管该市镇理事会在这三年期间获国家发展部全额政府津贴，其财务状况在2011至2013财政年度之间持续恶化。

AHPETC最新的财务报表及报告强化了国家发展部对该市镇理事会财务状况的既有关切。

附件

由AHPETC新委任的审计师Audit Alliance LLP指出AHPETC存在8个关切领域，包括未遵守法律与监管要求：

a. 期初余额。审计师无法确定2013财政年度期初余额是否公允列报。审计师亦无法核实若干应收利益相关方款项以及应付债权人及应计费用结转金额的准确性，这些问题即使在总审计署报告后仍未解决。

b. 服务与保育费应收款项。审计师无法确定从上一个财政年度结转、市镇理事会应收服务与保育费（S&CC）的准确性。

c. 债权人及应计费用。审计师无法确定截至2014年3月31日市镇理事会负债的完整性。

d. 预收服务与保育费。审计师无法确定从上一个财政年度结转、预付予市镇理事会的服务与保育费的准确性。

e. 关联方交易。审计师发现，身为FMSS股东兼董事的市镇理事会副总经理核证了12张来自FMSS的管理代理服务发票，合计210万元，并随后批准相关付款凭证。核证发票者与批准相关付款凭证者之间未有职责分离。关联方交易总价值从2012财政年度的680万元增至2013财政年度的850万元。

f. 管理代理编制招标规格的疏失。审计师发现，管理代理未能就3项招标声明规格是否给予任何特定投标者优惠。亦无文件记录招标规格是否经市镇理事会招标与合同委员会批准。

g. 转拨至沉淀基金。该市镇理事会违反市镇理事会财务规则，未将到期款项转入沉淀基金银行账户。AHPETC的转拨延迟长达15个月，且仅在总审计署审计后才发现计算错误。

h. 沉淀基金使用不当。该市镇理事会以沉淀基金支付市镇改善费用，这在《市镇理事会法令》下是不允许的。

背景

每年，市镇理事会须在财政年度结束后五个月内，即8月31日前，向国家发展部（MND）提交经审计财务报表、审计师报告及年报。国家发展部随后将报告提交国会。经审计财务报表及市镇理事会审计师所作任何报告的副本亦须转交总审计长。

除AHPETC外，所有市镇理事会均能按时提交。AHPETC自2011年成立以来从未按时提交报告。其2011财政年度第一套报告迟至2013年1月11日才提交国家发展部，延迟逾4个月。其2012财政年度第二套报告于2014年2月10日提交国家发展部，延迟6个月。

此外，就2011及2012财政年度，AHPETC当时的审计师Foo Kon Tan Grant Thornton LLP（FKT）连续两年发出无法表示意见声明。FKT在2011财政年度无法表示意见声明中列出四个关切领域，2012财政年度增至13个关切领域。在审计术语中，无法表示意见是严重事项。这意味着审计师无法声明财务报表真实公允地反映市镇理事会的财务状况。在2012财政年度，FKT亦就AHPETC其他法律与监管要求发出保留意见，指出AHPETC在多个方面未遵守《市镇理事会法令》及财务规则的规定。

由于AHPETC审计师报告中的观察对其财务与会计系统的可靠性与准确性提出严重质疑，2014年2月19日，总审计署（AGO）获委任对AHPETC的2012/13财政年度财务账目进行审计。这是市镇理事会历史上首次由总审计长根据《审计法令》第4(4)条对市镇理事会进行特别审计，以审视有关其财务状况的关切。

总审计署于2015年2月9日发表报告。总审计署报告指出AHPETC存在许多弱点与疏失，并结论道，在AHPETC处理并纠正这些弱点之前，“无法保证AHPETC的账目准确可靠，或公共资金获妥善使用、入账及管理。”

总审计署报告于2015年2月12日及13日在国会辩论。同时身为国会议员的AHPETC成员投票支持一项动议，对总审计署有关AHPETC的报告表示严重关切，并一致呼吁所有市镇理事会恪守高标准的会计、汇报与公司治理。

辩论期间，国家发展部长表示，国家发展部期望AHPETC纠正总审计署报告中指出的问题与弱点，并于2015年6月30日前提交无保留意见的2013/14财政年度经审计财务报表及报告，于2015年8月31日前提交2014/15财政年度经审计财务报表及报告。AHPETC亦被要求采取措施查明市镇理事会款项（包括政府津贴及从AHPETC辖下市镇居民与商户收取的服务与保育费）是否被不当支付，并在必要时采取行动追回该等款项。