AHPETC says finances in order, but auditors withhold opinion
WP chairman Sylvia Lim (right) and WP CEC member Png Eng Huat holding up the party's Annual Report for Financial Year 2014/2015 on Aug 30. Photo: Robin Choo
SINGAPORE — After two years of deficits, the Aljunied-Hougang-Punggol East Town Council (AHPETC) said there had been a turnaround in its financial position in its latest audited financial statements filed yesterday. It would have a S$1.7 million surplus for financial year 2014/15, if the S$7.2 million in government grants withheld by the Ministry of National Development (MND) had been disbursed.
AHPETC immediate past chairman Sylvia Lim attributed the “turn-around” in AHPETC’s financial position to factors including higher revenue, lower general and administrative expenditure and savings due to the use of contestable energy.
Under such a contract, a consumer whose electricity consumption meets a certain criteria can choose between packages with different price plans and services provided by the energy retailer.
For FY2014/2015, the town council collected S$52.1 million in service and conservancy charges, about S$5.9 million more than the previous financial year. Over the same period, general and administrative expenditure fell by about S$1.1 million to S$9.4 million.
However, AHPETC’s independent auditors said it could not express an opinion on the town council’s books — the third time in a row this has happened — because of insufficient information in three areas.
First, the audit firm, Audit Alliance, said it could not be sure of the town council’s opening balances, because of disclaimers noted in previous audits. Specifically, the areas that remain unresolved from the FY2012/13 report concerned S$397,000 in receivables from various stakeholders, including reimbursements from citizens consultative committee, as well as S$23,000 in payables and accrued expenses.
Second, although AHPETC said it had received S$215,000 in conservancy and service fees from other town councils, it could not provide supporting documents to back this up, said Audit Alliance.
Third, AHPETC could not give a detailed breakdown of advance receipts of conservancy and service fees amounting to S$508,000, said Audit Alliance, in its report dated Aug 24.
As for whether AHPETC was found to have complied with legal and regulatory requirements, Audit Alliance reported a qualified opinion, based on issues in two areas: Quarterly transfers to its Sinking Fund were late, and money was used from the Sinking Fund for Neighbourhood Renewal Programmes.
Other than these, the auditors said AHPETC’s “receipts, expenditure, investment of moneys and the acquisition and disposal of assets” during the financial year are in accordance with the Town Councils Act.
“Proper accounting and other records have been kept, including records of all assets of the Town Council, whether purchased, donated or otherwise,” they added.
In the chairman’s review she penned in AHPETC’s annual report, Ms Lim acknowledged that “there are still information gaps and legacy issues” relating to clarity on the town council’s opening balances. She also said AHPETC will continue to improve its financial management, which has been under public scrutiny for some time, leading to a special audit being called by MND.
The Auditor-General’s Office had noted major lapses in governance and compliance, resulting in an unprecedented application by the ministry for the court to appoint independent accountants to oversee government grants — this has been rejected by the court and a decision on an appeal is pending.
MND has been withholding grants from AHPETC, as it has said it has no guarantee that the money would be used properly. AHPETC, meanwhile, has asked that the full sum be paid to its sinking fund account.
Ms Lim noted that despite challenges faced by AHPETC, services to residents were not disrupted. Nevertheless, she acknowledged that service levels can be improved in some aspects of the town council’s work.
Reiterating the “daunting odds” that AHPETC had to overcome, Ms Lim said she took satisfaction in the fact that the town council was able to file its accounts in time for FY2014/2015 — and less than two months after, it filed its FY2013/14 report, which was submitted late to the authorities.
In an open letter to residents, Ms Lim sought to reassure all residents that the town council “places your interests at the heart of its work and continues to make improvements to its financial management”. She reiterated that there was “never any conflict of interest whatsoever” in AHPETC’s dealings with its former managing agent FM Solutions & Services.
“Neither the WP nor any of its MPs or members has any interest in the business of FMSS. None of the directors and shareholders of FMSS is a member of the WP,” she said. FMSS is owned by WP supporters, the late Mr Danny Loh and his wife Ms How Weng Fan.
