Aljunied-Hougang Town Council says MND's statement on its financial statement is 'selective and incomplete'

SINGAPORE - The Ministry of National Development (MND) was "selective and incomplete" in its statement on Aljunied-Hougang Town Council's (AHTC) qualified financial statement, said the town council on Friday evening (Dec 14).

AHTC was the only one of 16 town councils to receive a qualified financial statement from its external auditor, which MND said was due to the town council's failure to record expenses incurred in a timely manner.

In its town council management report for the 2017 financial year, the ministry issued the Workers' Party-run town council an amber rating for corporate governance for "failure to maintain updated accounts and records of expenses due to an internal control weakness". This was the first time since 2013 that AHTC did not receive the lowest red rating.

Three other town councils received an amber rating for corporate governance - Bishan-Toa Payoh, Tampines and Tanjong Pagar.

Responding to the ministry, AHTC pointed out that MND's observation omitted points made by its external auditor, including the fact that "there are no material misstatements found in the expenses and related payable transactions during the financial year."

In contrast, MND described the errors made by Tampines Town Council in an "even-handed and balanced tone", AHTC said.

Tampines Town Council had transferred the wrong sum from its operating fund to the sinking fund and lift replacement fund.

AHTC's financial statements were qualified by its external auditor because of an internal control weakness, where the town council did not record expenses incurred in a timely manner.

MND said Tampines Town Council had "identified the computational error and rectified it", but added the issue was still considered as a case of non-compliance as the correct amount was not transferred within one month after the end of the quarter.

AHTC also noted that the MND statement said it has received qualified statements from its external auditor for seven years in a row.

This gives the impression that AHTC has "stood still for seven years", the town council said.

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It added: "We believe MND's specific reference to seven consecutive years is deliberately calculated to lower the esteem of AHTC in the public eye."

MND's town council management report looks at how town councils have performed in five areas: estate cleanliness, estate maintenance, lift performance, management of arrears in service and conservancy charges (S&CC), and corporate governance.

In each area, town councils are assessed based on "measurable objective criteria" submitted by town councils and their auditors. They receive green, amber or red scores depending on their performance.

AHTC scored green ratings for estate cleanliness, lift performance and management of arrears in service and conservancy charges (S&CC), and amber ratings for corporate governance and estate maintenance.

In previous years, AHTC had been given mostly red ratings in corporate governance and S&CC arrears management, aside from an amber rating in the latter area for the 2016 financial year.

This article was first published in The Straits Times. Permission required for reproduction.