SINGAPORE - The Ministry of National Development has expressed concern that independent auditors have been unable to fully verify Aljunied-Hougang-Punggol East Town Council's (AHPETC) accounts for the second year in a row.
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Here is the full statement from the Ministry of National Development:
Town Councils (TCs) are required by law to submit their audited financial statements to the Minister for National Development, for presentation to Parliament. A copy of the audited financial statements and any report made by the Town Council's auditor shall also be forwarded to the Auditor-General.
All TCs were required to submit their financial statements by 31 August 2013 for the financial year 2012. After seven reminders from September 2013, the Aljunied-Hougang-Punggol East Town Council (AHPETC) finally submitted to MND its audited financial statements and a report from its auditors, M/s Foo Kon Tan Grant Thornton LLP on 10 February 2014.
The AHPETC's auditors reported that AHPETC had not complied with the provisions of the Town Councils Act and the Town Councils Financial Rules. The auditors reported that:
(a) AHPETC had not transferred funds into its Sinking Funds as required under Rule 4(2B)(a) of the Town Councils Financial Rules.
(b) the auditors had not been able to determine the completeness of the related party disclosures in AHPETC as the TC had not made available to the auditors details of project management service fees paid to a related party. (Related party transactions refer to transactions where the TC's key management personnel have a personal financial interest.)
(c) AHPETC had not made available to the auditors its latest management accounts and records of minutes subsequent to the financial year end, to allow the auditors to ascertain whether AHPETC's financial statements properly reflected adjustments or disclosures needed in light of relevant subsequent events.
(d) the auditors were unable to determine the validity and accuracy of various items in AHPETC's accounts, including receivables of some $1.8 million recorded in Sundry Debtors, lift repair and lift upgrading expenses of some $20 million, temporary unidentified receipts from residents and HDB of some $308,000, and advance receipts from residents in respect of conservancy and service charges of some $507,000. There were also unexplained differences of GST payable of some $518,000 and unreconciled differences of some $63,000 in cash and bank balances.
The AHPETC auditors' observations have led the auditors to submit a disclaimer of opinion on AHPETC's financial statements. This is the second year that AHPETC's auditors have submitted a disclaimer of opinion on its accounts. This is a cause for concern. The auditors have submitted their audit report to the Auditor-General on 13 Feb 2014 as required under the law.