'Safeguards in place' so AHTC will get $12.9m of grants

'Safeguards in place' so AHTC will get $12.9m of grants
Workers’ Party MPs Sylvia Lim (left) and Png Eng Huat (centre) with lawyer Peter Low arriving at the Supreme Court on Jan 22, 2016.
PHOTO: The Straits Times

The town council run by the Workers' Party (WP) will be receiving long-awaited grants from the Ministry of National Development (MND), which says it is now satisfied that safeguards are in place to ensure the proper use of the money.

The Aljunied-Hougang Town Council (AHTC) will get $12.9 million, said the ministry without disclosing when the money will be handed over.

Another $1.8 million is earmarked for Punggol East constituency, which was previously part of the WP's Aljunied- Hougang-Punggol East Town Council (AHPETC).

This sum will go to the Pasir Ris-Punggol Town Council (PRPTC) as the constituency was won by the People's Action Party in last year's general election.

The ministry held back a total of $14.7 million in operating grants for the financial years 2014/2015 and 2015/2016. Yesterday, it noted that AHTC has said it "fully accepts all conditions set by MND in relation to the grants".

The conditions include appointing independent accountants, setting up segregated bank accounts to receive the grants, and getting the accountants to sign off on large payments from the accounts.

AHTC hired a team of accountants from KPMG last month to look into its books.

This followed a Court of Appeal order for the town council to appoint a Big Four accounting firm to help establish whether any past payments it made were improper and if money should be recovered, among other things.

"With these safeguards in place, the ministry will be disbursing the grants to AHTC," said MND.

When contacted, Punggol East MP Charles Chong welcomed the disbursement of the grants.

But he noted that PRPTC had not received the full amount of Punggol East's sinking funds due from AHTC.

He said in 2013, $22.5 million in sinking funds had been handed over to the WP-run town council, after the opposition party won Punggol East in a by-election that year.

But AHTC has so far transferred back only an "interim amount" of $10 million in sinking funds, he said, adding that the exact amount owed is still being worked out.

"The sooner this is resolved the better, as we have to get back what is due to us to be fair to the residents," Mr Chong said.

The WP did not respond to media queries by press time.

The MND had earlier withheld the grants due to lapses in financial governance in AHPETC identified by its own auditors and a special Auditor-General's Office report released in February last year.

The ministry and the Housing Board subsequently applied to the courts to appoint independent accountants to inspect AHPETC books and rectify the lapses.

After months of disagreements, the Court of Appeal ordered AHTC to select one of the Big Four accounting firms.

At a hearing on the issue, Chief Justice Sundaresh Menon said in January this year that the accountants' task "should not be underestimated" because they had to ensure a public body was meeting its legal obligations and using its public funds properly.

They would also have to look into whether any past payments made by the town council "were improper and ought therefore to be recovered".

This article was first published on April 15, 2016.
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