AHTC resolves five more areas of non-compliance
TODAY file photo
SINGAPORE — The Workers’ Party-run Aljunied-Hougang Town Council (AHTC) has resolved five more areas of non-compliance with the Town Councils Act since December, according to the latest monthly report by auditing firm KPMG released yesterday.
The five audit points were on the issue of related party transactions. This means the town council, previously flagged for making slow progress in remedying control failures, has resolved eight out of 17 audit points, nearly a year after KPMG issued its first report in April last year.
And of 71 control failures earlier identified by KPMG, 36 have been fully addressed, 13 more than in last month’s report.
KPMG was appointed by AHTC on court orders to help fix compliance and governance lapses uncovered in a special audit by the Auditor-General’s Office.
The report was released by AHTC on its website yesterday. Among the newly resolved audit points were the incomplete disclosure of transactions in the financial statements; waiver of open tenders and competitive quotations for services; and lack of disclosures, due diligence and assessment of potential conflicts of interest prior to awarding contracts to the related parties.
It has also resolved the issues of weaknesses in the approval of payments, as well as approvals for services obtained and written agreements executed after the awarding and commencement of services provided by the related parties.
The steps taken to resolve these five audit points include establishing the necessary policies and procedures, and KPMG said randomly selected samples showed that the required processes and approvals were performed.
Remediation measures implemented still have to be tested in three areas: The incorrect use of sinking fund monies; weaknesses in procurement and payment related processes and the untimely recording of lift repairs and upgrading expenses; and absence of guidelines for verification of works and issuance of work orders.
Six more audit points with remediation measures in place are subject to further reviews and recommendations by KPMG.
These include areas like the management of service and conservancy charges arrears; weaknesses in the handover process and safeguarding of accounting records; and reconciliation of direct and indirect tax, for instance.
It will take three to six months to determine whether measures taken by AHTC to resolve these issues are effective, KPMG said in its 10th monthly report. AHTC has also implemented Phase One of its replacement accounting system on Jan 3.
Previously, KPMG had also flagged issues of serious conflicts of interest and a failed control environment at the town council, as well as systemic weaknesses.
