MND seeking to make town councils more accountable

THE difficulty residents have in holding town councils accountable over managing their money has prompted the National Development Ministry (MND) to look for a solution.

It is studying the town council framework to see what can be done to ensure better protection of public funds, National Development Minister Khaw Boon Wan told Parliament on Monday.

While residents can hold their councils to account in areas such as estate cleanliness and maintenance at election time, it is hard to exercise effective oversight in other areas such as financial management, he added.

When asked for more details of the review, MND would only say that the study, announced last May, will look at the laws governing councils. This includes the Town Councils Act and Town Councils Financial Rules.

Mr Khaw's remarks came in response to Mr Alvin Yeo (Chua Chu Kang GRC), who asked what measures MND had in place to protect residents' interests if a council failed to observe good corporate governance and responsible accounting.

The minister noted that in extreme situations, such as a council failing to maintain its estate, or if residents were in danger of some kind, then "the Minister for National Development can intervene... and appoint someone else to perform its duties".

His comments come two weeks after Finance Minister Tharman Shanmugaratnam directed the Auditor-General to audit the books of Aljunied-Hougang-Punggol East Town Council (AHPETC) for the past two financial years after independent auditors failed to give the Workers' Party-run town council a clean bill of health.

Mr Khaw, with AHPETC chairman Sylvia Lim and WP secretary-general Low Thia Khiang present in the House, also spoke of how the laws give MPs "much latitude to run town councils within broad and general rules of governance".

The Town Council Act lists only three offences: misusing council funds; contravening council lift upgrading programme rules; and wilfully withholding information required by an auditor without reasonable cause. All three attract fines, said Mr Khaw.

While the Act may have limited enforcement powers, individuals who run councils are subject to the same laws that apply elsewhere. "Criminal and civil liabilities apply when their actions amount to transgressions of such laws," Mr Khaw said, adding that councils are expected to manage their own affairs and be accountable to their resident-voters.

This responsibility includes keeping proper accounts, which must be audited annually and promptly submitted to the MND for tabling in Parliament.

The ministry then announces its concerns and observations so residents are informed and can hold their councils to account.

The MND also regularly publishes a town council report, said Mr Khaw, so residents know how their councils are performing.

Get a copy of The Straits Times or go to for more stories.