Aljunied-Hougang-Punggol East Town Council (AHPETC) has been red flagged by the Ministry of National Development (MND) in two areas in the latest Town Council Management Report that was released today.
MND said its "persistent poor performance in corporate governance and service and conservancy charge (S&CC) arrears management is of grave public concern'.
AHPETC had been red flagged for two areas: S&CC arrears management, which examines the extent of town councils' S&CC arrears that residents have to bear, and corporate governance, which reflects the town councils' financial rules.
Other areas in which a town council's performance is assessed includes estate cleanliness, estate management, lift performance, S&CC arrears management and corporate governance. Three colours are used to band the town councils for each category: red, green and amber.
According to MND, this is the second successive report that AHPETC had been banded red for corporate governance and the third successive time to be banded red for S&CC arrears management.
Under corporate governance, MND said AHPETC's independent auditors for FY11 and FY12 have reported various legal and regulatory contraventions. MND stated that the town council had not rectified them.
Also, AHPETC has yet to submit its FY12 financial statements and its self-declared corporate governance checklist, said the report.
As for S&CC arrears, the situation is "of grave public concern", said MND.
The ministry explained that Aljunied's S&CC arrears rate rose from 2.6 per cent in FY10 to 8.4 per cent in FY11 and FY12, after Aljunied merged with Hougang. MND said these rates were significantly above the national norm of about 3 per cent.
AHPETC had committed to improve the arrear's situation, but its rates further increased to 29.4 per cent as at end April, 2013, stated the report.
MND also said that from May 2013, the town council stopped submitting its monthly S&CC arrears report altogether, despite repeated reminders.
While most town councils have performed well in certain areas, some could do better in estate maintenance, service and conservancy charge arrears management and corporate governance, said the report, which covers the period from April 2013 to March 2014.
The report pointed out that estate maintenance remains an area for improvement, as 11 town councils had scored Amber in this catgeory. Obstruction of common areas was the top most observation under this category.
Other town councils that were highlighted in the report include Potong Pasir Town Council, which scored Amber for S&CC arrears maangement, and Ang Mo Kio Town Council (AMKTC), as well as Choa Chu Kang Town Council (CCKTC).
The two were banded amber in the corporate governance category for technical breaches.
AMKTC was late in transferring funds to its sinking fund bank account on two occasions by six and eight days respectively, because the authorised signatories were overseas when the transfers were due.
CCKTC did not transfer the correct amount to the sinking fund for the quarter ended Sep 2013 due to errors in calculations.
MND said both town councils have since rectified the breaches.