The Ministry of National Development (MND) on Friday (Mar 20) applied to the court to appoint Independent Accountants, in order to safeguard government grants to the Aljunied-Hougang-Punggol East Town Council (AHPETC).

The court documents were served on the town council on Friday.

In June 2014, AHPETC had requested that MND disburse the Service and Conservancy Charges (S&CC) Operating Grant for FY 2014 “without further delay”, stating that “the continued withholding of the grant to AHPETC is likely to critically and adversely affect the TC’s cash flow position”.

“But before MND does so, there must be adequate safeguards to ensure that AHPETC accounts for and manages these grants properly,” the ministry said in its statement on Friday. “MND has therefore applied to Court to appoint Independent Accountants to safeguard the S&CC grants to be disbursed to AHPETC. If the Court grants the order, MND will be able to disburse the S&CC grants for both FY14 and FY15 to AHPETC.”

The town council will have to keep the grants in segregated accounts, and payments out of these accounts exceeding certain thresholds will have to be co-signed by the Independent Accountants, said the MND.

The ministry added that is also asking the Court to empower the Independent Accountants to look at past payments made by AHPETC, and to take appropriate action to recover losses suffered by AHPETC and its residents – provided the Independent Accountants obtains the Court’s permission to do so.

However, the Independent Accountants will not take over the operations of AHPETC, nor will they seek to remedy the problems identified by AGO and AHPETC’s auditors, said MND. “These remain the responsibility of AHPETC’s Town Councillors.”

In the Auditor-General’s Office (AGO) report on AHPETC accounts for FY2012-13, the AGO report identified “major lapses” in governance and compliance. “Until the weaknesses are addressed, there can be no assurance that AHPETC’s accounts are accurate and reliable, or that public funds are properly spent, accounted for and managed,” the AGO said in its report.

Following a debate in February, Parliament unanimously noted with concern the AGO’s findings, and called on all Town Councils to uphold high accounting, reporting and corporate governance standard. During the debate, Minister for National Development Khaw Boon Wan called on AHPETC to take “real and concrete steps” to resolve the problems identified by the AGO.

“Make restitution to the residents for the losses to their town council. Submit a clean set of accounts for FY 2013 to Parliament by Jun 30, 2015. Submit your accounts for FY 2014 on time by Aug 31, 2015. Account to Parliament, account to your residents and those in this House,” said Mr Khaw on Feb 13.

“These are not high hurdles. These are the basic requirements for any organisation, for anyone seeking to run for office in any organisation. Every town council has been able to do this, including those run by opposition MPs in the past. ”

However, in its statement on Friday, the MND noted that AHPETC has not indicated that it is willing to take these actions.

“MND hopes that AHPETC will cooperate fully with the proposed Independent Accountants in order to continue receiving S&CC grants, safeguard public funds and protect the interests of residents,” it said in its statement.

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