Channel NewsAsia
Updated: 03/07/2014 18:12 | By Channel NewsAsia

AHPETC's corporate governance graded "red" for FY2012

AHPETC's corporate governance graded "red" for FY2012


AHPETC's corporate governance graded "red" for FY2012

SINGAPORE: The Ministry of National Development (MND) has said the Aljunied-Hougang-Punggol East Town Council's (AHPETC's) corporate governance will be graded "red" for the FY2012 Town Council Management Report (TCMR).

The bandings -- green, amber or red -- will allow residents to assess the different areas of a town council's (TC) performance.

MND said the corporate governance indicator, in particular, reflects the strength of the TCs' corporate governance through governance-related observations by their auditors and their self-declared compliance with the Town Councils Act and the Town Council Financial Rules.

It said this is the first time a town council has received a "red" banding for corporate governance.

It added that it will assess the follow-up action, if any, after the town council submits the auditor's management letter which is still outstanding, despite repeated reminders.

On 21 November 2013, when MND published the FY2012 TCMR for all Town Councils (TCs), AHPETC's corporate governance assessment was marked "pending".

This was because AHPETC had then not submitted its FY2012/13 audited financial statements, auditor's report, auditor's management letter and self-declared corporate governance checklist, which were material for assessment.

On 10 February 2014, AHPETC submitted to MND its FY2012/13 audited financial statements, auditor's report and self-declared corporate governance checklist.

MND has assessed the TC's corporate governance based on the TC's submission.

The ministry notes from the report of AHPETC's auditor -- Foo Kon Tan Grant Thornton LLP -- that AHPETC had not complied with the provisions of the Town Councils Act and the Town Councils Financial Rules, and that AHPETC had at least two counts of contraventions.

These are - firstly, failure to transfer funds into the bank account of the sinking funds, as required under {Rule 4(2B)(a) of} the Town Councils Financial Rules; and secondly, failure to keep proper accounts and records of its transactions and affairs, as required under {section 35 of} the TCs Act.

On Friday, MND said it will update the "red" grade of AHPETC's corporate governance accordingly in the FY2012 Town Council Management Report (http://www.towncouncils.sg/doing/Results_FY12TCMR.html).

A news release from MND adds that to date, the AHPETC has not submitted its auditor's management letter to MND, despite multiple reminders.

MND has reminded AHPETC to do so as soon as possible.

On 24 February, the Auditor-General's Office said it has started work on its audit of AHPETC. These include all audit assignments, preliminary information gathering, and also the planning and carrying out of the audit work on the ground.

The Auditor-General was tasked by Minister for Finance Tharman Shanmugaratnam to conduct an audit of AHPETC's latest financial statements.

The move came at the request of Minister for National Development Khaw Boon Wan, following a "disclaimer of opinion" by independent auditors engaged by the AHPETC to audit their financial statements.

This means that the independent auditors were unable to express an opinion on the financial position of the town council due to insufficient evidence.

In response to MND's statement on the banding for AHPETC's corporate governance, chairman of AHPETC Sylvia Lim said this "comes as no surprise".

She said, "the factors that MND took into consideration included matters on which we had provided information in our statement of 14 February 2014 and in the Town Council's Annual Report itself. These matters are the subject of an ongoing audit by the Auditor-General's Office, and we will respond further, if there is a need to, after the audit."

The Workers' Party runs the AHPETC.  - CNA/de

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