Failures in governance at Aljunied-Hougang Town Council (AHTC) exposed millions of dollars in public funds to improper use and application, and could amount to criminal conduct if deliberate, independent auditor KPMG said in a report on the town council's accounts released yesterday.
Payments with a value of at least $23 million were approved by town council members with a conflict of interest, raising questions on whether they were fully justified.
Improper payments totalling some $1.5 million were also identified, of which at least $600,000 ought to be recovered, KPMG added.
The 68-page report KPMG submitted to AHTC and the Housing Board on Monday detailed how the Workers' Party-run town council, formerly known as Aljunied-Hougang-Punggol East Town Council was exposed to serious conflicts of interest.
The direct owners of two companies appointed as its managing agent, as well as providers of essential maintenance services, held key management and financial control positions in the town council at the same time.
The two companies are FM Solutions and Services (FMSS) and FM Solutions and Integrated Services (FMSI).
For instance, six shareholders of FMSS, which from 2011 to 2015 was engaged by the town council to be its managing agent and provider of essential maintenance services, held various positions in the town council during that period, including the posts of secretary, general manager and finance manager.
This meant that FMSS shareholders working in the town council effectively approved and made payments to themselves when they paid FMSS, said KPMG. Payments totalling $23,299,483 were approved by people in conflicting positions, it added.
The KPMG report is part of its ongoing audit of AHTC following lapses in governance flagged by its own auditors as well as by the Auditor-General's Office in February last year, which was debated in Parliament.
The town council appointed KPMG to look into its books following an order by the Court of Appeal.
AHTC, in a statement yesterday evening, said it is studying the report in detail.
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