MND applies to Court for Independent Accountants to be appointed to safeguard S&CC grants disbursed to AHPETC

The Ministry of National Development (MND) applied to Court to appoint Independent Accountants to safeguard government grants to the Aljunied-Hougang-Punggol East Town Council (AHPETC), and to take necessary steps in respect of payments made by AHPETC. The court documents were served on the AHPETC today.

This is a follow-up to the Auditor-General’s Office (AGO) report on the audit of AHPETC and to the Parliamentary debate in February on this report. 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.”

Parliament noted with concern the AGO’s findings, and unanimously called on all Town Councils to uphold high standards of accounting, reporting and corporate governance. In the debate, Minister Khaw Boon Wan spelt out what this meant for AHPETC: it had to take immediate, clear and unequivocal steps to resolve the problems identified by the AGO. These steps included commissioning a forensic audit to examine whether payments made by AHPETC have been correctly and lawfully made and properly authorised, and if necessary to take action to recover such payments. AHPETC has not indicated that it is willing to take these actions.

Earlier (in June 2014), AHPETC had written to request MND to disburse the Service and Conservancy Charges (S&CC) Operating Grant for FY 2014 “without further delay”, stating that “the continued withholding of the grant to AHPETC is likely to critically and adversely affect the TC’s cash flow position”. But before MND does so, there must be adequate safeguards to ensure that AHPETC accounts for and manages these grants properly.

MND has therefore applied to Court to appoint Independent Accountants to safeguard the S&CC grants to be disbursed to AHPETC. If the Court grants the order, MND will be able to disburse the S&CC grants for both FY14 and FY15 to AHPETC. AHPETC will have to keep the grants in segregated accounts and payments out of these accounts exceeding certain thresholds will have to be co-signed by the Independent Accountants.

MND is also asking the Court to empower the Independent Accountants to look at past payments made by AHPETC and to take appropriate action to recover losses suffered by AHPETC and its residents, provided the Independent Accountants obtains the Court’s permission to do so.

The Independent Accountants, however, will not take over the operations of AHPETC, nor will they seek to remedy the problems identified by AGO and AHPETC’s auditors. These remain the responsibility of AHPETC’s Town Councillors.

MND hopes that AHPETC will cooperate fully with the proposed Independent Accountants in order to continue receiving S&CC grants, safeguard public funds and protect the interests of residents.