Town Councils’ FY2018 Financial Statements and the FY2018 Town Council Management Report

Presentation of Town Councils’ FY2018 Financial Statements to Parliament

The Ministry of National Development (MND) has presented the FY2018 audited financial statements of all Town Councils (TCs) to Parliament, and the TCs will be making them available on their websites.

2. All TCs had unqualified financial statements for FY2018.

Results of the FY2018 Town Council Management Report

3. MND has also released the FY2018 Town Council Management Report (TCMR) covering the period April 2018 to March 2019. Under the TCMR, TCs are assessed across five indicators, using three colour bands. The assessment is based on measurable objective criteria submitted by the TCs and their auditors. This is also the first report which has adopted the revised Performance Standards for Estate Cleanliness and Estate Maintenance.

4. The results of the FY2018 TCMR are comparable with that of previous years, with improvements observed in the area of Estate Maintenance. The results are summarised below. More details can be found at Annexes A and B.

TCMR Indicators

TCMR Indicators

Result

Result

Estate Cleanliness

Assesses town cleanliness in areas such as presence of litter, bulky refuse and graffiti.

Estate Cleanliness

Assesses town cleanliness in areas such as presence of litter, bulky refuse and graffiti.

15 TCs scored “Green”

1 TC scored “Amber”

15 TCs scored “Green”

1 TC scored “Amber”

Estate Maintenance

Assesses town maintenance in areas such as damaged pipes/walls and obstructions in common areas.

Estate Maintenance

Assesses town maintenance in areas such as damaged pipes/walls and obstructions in common areas.

13 TCs scored “Green”

3 TCs scored “Amber”

13 TCs scored “Green”

3 TCs scored “Amber”

Lift Performance

Assesses the performance of lifts as measured by frequency of lift breakdowns and functioning of the Automatic Rescue Device (ARD)[1].

Lift Performance

Assesses the performance of lifts as measured by frequency of lift breakdowns and functioning of the Automatic Rescue Device (ARD)[1].

All TCs scored “Green”

All TCs scored “Green”

S&CC Arrears Management

Assesses the effectiveness of TCs’ S&CC arrears management.

S&CC Arrears Management

Assesses the effectiveness of TCs’ S&CC arrears management.

All TCs scored “Green”

All TCs scored “Green”

Corporate Governance

Reflects the strength of TCs’ corporate governance through governance-related observations by their auditors and their self-declared compliance with the Town Councils Act (TCs Act) and subsidiary legislation such as Town Councils Financial Rules (TCFR).

Corporate Governance

Reflects the strength of TCs’ corporate governance through governance-related observations by their auditors and their self-declared compliance with the Town Councils Act (TCs Act) and subsidiary legislation such as Town Councils Financial Rules (TCFR).

14 TCs scored “Green”[2]

2 TCs scored “Amber”

14 TCs scored “Green”[2]

2 TCs scored “Amber”

[1] The ARD brings the lift car to the nearest lift landing during a power failure.

[2] Please refer to paras 6 to 8 for details affecting Aljunied-Hougang Town Council.

Observations

5. The broad observations for the indicators are as follows:

a) Estate Cleanliness. 15 TCs were banded “Green” and 1 TC was banded “Amber”. TCs which had less than 4 counts of cleanliness observations per block on average were banded “Green”, while TCs which had 4 to less than 8 counts of cleanliness observations per block on average were banded “Amber”.

b) Estate Maintenance. 13 TCs were banded “Green” and 3 TCs were banded “Amber”. TCs which had less than 4 counts of maintenance observations per block on average were banded “Green”, while TCs which had 4 to less than 8 counts of maintenance observations per block on average were banded “Amber”.

c) Lift Performance. All TCs were banded “Green” as there were less than 2 breakdowns every month for every 10 lifts managed by the TCs, and the lifts’ ARD failure rate was zero.

d) S&CC Arrears Management. All TCs were banded “Green” as there were less than 4 in 100 households that owed arrears for 3 months or more, and less than 40% of the monthly collectible S&CC for the town was overdue.

e) Corporate Governance. 14 TCs were banded “Green”, and 2 TCs were banded “Amber” due to one count each of non-compliance with the TCs Act and the TCFR respectively:

i) Holland-Bukit Panjang – Collection of charges for the use of outdoor display areas (ODAs) by third-party retailers. This goes beyond the provisions of the Town Councils (Use of Common Property) Rules which require the ODAs to be confined to incidental use by existing businesses.

ii) Jurong-Clementi – The TCFR allows quotations of up to $3,000 to be obtained verbally and approved, and thereafter circulated to the Town Council for information. While the TC had obtained approval from the appropriate authority for these quotations, it had not circulated them as required by the TCFR.

6. Aljunied-Hougang Town Council (AHTC) has achieved a “Green” banding for the Corporate Governance indicator. This was due in large part to the efforts of KPMG (the accountants appointed by AHTC pursuant to a Court order in 2015), which assisted AHTC in its remediation of past control failures and audit points over a period of 24 months. HDB had provided funding for this work done by KPMG.

7. Separately, MND notes the recent High Court judgment in October 2019 which found that Ms Sylvia Lim and Mr Low Thia Khiang, both elected town councillors of AHTC, had acted dishonestly and in breach of their fiduciary duties, and that their conduct had lacked integrity and candour. Despite these serious and grave findings, AHTC has resolved during its recent quarterly meeting that Ms Lim and Mr Low do not need to recuse themselves from AHTC’s financial matters.

8. For good governance, AHTC should take interim measures to safeguard its procurement and payment processes immediately. Until and unless the Court findings in respect of Ms Lim’s and Mr Low’s conduct are reversed by the appellate Court, they remain good and should be taken seriously by AHTC. In particular, MND remains concerned as to whether the measures implemented under KPMG’s guidance are adequate to guard against a recurrence of the past control failures if Ms Lim and Mr Low continue to be involved with AHTC’s financial affairs, especially since the adequacy of the measures is entirely dependent on their implementation by the individuals involved with AHTC’s financial affairs. In this regard, MND has written to AHTC on 4 December 2019 to request for information on AHTC’s reasons for not requiring Ms Lim’s and Mr Low’s recusal on AHTC’s financial matters, and on whether AHTC intends to implement other interim measures or safeguards. Upon receiving AHTC’s response, MND will further consider whether regulatory action needs to be taken in order to ensure the proper safeguarding of public monies entrusted to Town Councils.

TCMR Review

9. From FY2020, the Lift Performance Indicator will be revised to a holistic assessment which considers the frequency and duration of lift faults. This will serve as a more direct measure of the experience of residents in using their lifts. The revised Indicator will be a composite measure of the frequency of fault occurrences of all faults measured by the Tele-Monitoring System (TMS) used by TCs, and the duration of lift downtime experienced by residents as a result of such TMS faults. TCs which have less than 2 lift faults per 10 lifts and less than 1 hour of downtime per lift each month, will be banded “Green”. The remaining indicators are being reviewed progressively, and details will be announced when ready.

Enquiries

10. Members of the public can refer to the TCs’ FY2018 financial statements on the respective TCs’ websites. The TCMR results can be found on www.mnd.gov.sg/towncouncils.