MND's concerns over accounts are old issues: AHPETC

MND's concerns over accounts are old issues: AHPETC
AHPETC chairman Sylvia Lim (in blue jacket) together with her team walks in the supreme court.

The Aljunied-Hougang-Punggol East Town Council (AHPETC) said last night that areas of concern highlighted by the Government about its recently submitted accounts were "old issues", and that it was making progress in clearing up other problems.

The Workers' Party-run town council submitted its accounts for the financial year (FY) 2013/2014 to the Ministry of National Development (MND) on Tuesday - a deadline that was newly set after it failed to meet the original due date 10 months ago.

But its own auditors, Audit Alliance, flagged eight areas of concern in the report, including that of related party transactions - a reference to AHPETC's managing agent FM Solutions and Services, which is owned by some key town council officials.

AHPETC was also unable to resolve three of the 13 disclaimers raised by its previous auditors, Foo Kon Tan Grant Thornton, in its FY 2012/2013 report. Disclaimers mean the auditors were unable to form an opinion on the veracity of the financial records.

MND said on Tuesday that AHPETC's latest financial statements and report reinforced its "existing concern about the town council's state of financial affairs".

But in a response posted on its website yesterday, AHPETC said related party transactions were "an old issue on which AHPETC has made progress".

And any concerns will be "completely removed" after July 15 when the managing agent's contract expires and AHPETC will manage the town council directly.

AHPETC also said "significant progress has been made on clearing past disclaimers".

But it conceded that its future audit reports were likely to still "contain qualifications relating to specific items, especially handover opening balances, which remain unresolved even with the assistance of the Auditor-General's Office (AGO), despite 10 months of extensive work".

The AGO conducted a year-long special audit of AHPETC's accounts, which ended this February and unearthed accounting and governance lapses.

AHPETC yesterday also explained why it went from having an annual operating surplus of $1.1 million in FY 2011/2012 to a deficit of $1.53 million in FY 2012/2013, and a deficit of $2.01 million in FY 2013/2014.

MND highlighted these and said AHPETC understated the deficit in FY 2012/2013.

Responding, AHPETC said that the FY 2012/2013 deficit was corrected and restated after the AGO's audit findings.

In FY2013/2014, the deficit "increased substantially as a result of higher operating expenses".

AHPETC added that although it had failed to comply with the Town Council Act and Town Council Financial Rules in some aspects, its auditors said its "receipts, expenditure, investment of monies and the acquisition and disposal of assets" were in compliance with the Act.

This article was first published on July 3, 2015.
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