AHTC says will strive to comply with rules in response to town councils report

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SINGAPORE: The Aljunied-Hougang Town Council (AHTC) will take remedial action to comply with town council financial rules, it said on Monday (Nov 20), after it was flagged for unsatisfactory corporate governance in the Ministry of National Development’s (MND) Town Council Management Review for FY2016.

“AHTC has reviewed our statutory auditor’s comments. We will strive to keep all inadvertent administrative errors to a minimum and comply with the Town Council Financial Rules (TCFR),” chairman Pritam Singh said in a statement.

The review rates the town councils “green”, “amber” or “red” on five indicators: estate cleanliness, estate maintenance, lift performance, arrears management and corporate governance.

AHTC was banded “red” for corporate governance, the only town council out of 16 to receive the worst rating. It was banded “green” for estate cleanliness and lift performance, and “amber” for estate maintenance and arrears management.

AHTC noted in its statement on Monday that the town council’s rating for arrears management improved from “red” to “amber” for the first time since 2011.

However, it was rated “red” for corporate governance for having three audit observations, one of which was for a waiver of quotation, which was done to continue with a service provider at the same charges.

AHTC said it called for quotations for a human resources system in August, inviting six vendors, but only the existing service provider responded.

“The town council assessed it would have been more viable to continue with the existing service provider for one more year, as the service provider had confirmed it would not increase its charges for services rendered,” it said.

A second lapse was that the fixed asset count report was not certified as required. AHTC said that there were “no adverse findings or anomalies” in two fixed asset sightings that were conducted during the financial year, but that the report was not certified as required under the TCFR.

To fix this, AHTC said that it has drawn up a fixed asset checklist with a column specifically requiring certification by a key officer of the council.

A third lapse was because a quarterly transfer to the sinking fund was late by three days, due to staff oversight in signing the bank instructions, AHTC said. The town council said it has enhanced its internal system to monitor key deadlines.

The town council has appointed Baker Tilly Consultancy (Singapore) as its internal auditor for two years to check on the AHTC’s internal control procedures, it added.

AHTC also that said it recorded an operating surplus of about S$4 million this financial year and plans to devote a portion of it to town improvement works next year. The surplus is due to new contracts secured at favourable rates, it said.

“For example, the total amount of savings arising from the town council’s contestable energy contract is about S$1.2 million over two years.”

It also reported that it has been working with KPMG to rectify a list of control matters previously identified for resolution, and that 76 per cent of the audit points have been resolved. The town council expects to resolve the outstanding audit points by early next year.

It added that while lift performance was banded “green”, it has seen a “distinct pattern of rising lift expenses”.

“We anticipate these higher charges to have a significant impact on the town council’s operating costs in the years to come,” Mr Singh said.

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