The Aljunied-Hougang-Punggol East Town Council (AHPETC) will not have a Managing Agent from July, as no one has come forward to submit a bid, said chairman Sylvia Lim in an open letter to residents published in the June edition of the Good Neighbours newsletter.
“Come July 2015, we will be embarking on direct management of the TC, as no MA (Managing Agent) has submitted a bid to work for AHPETC. We will do our best to keep costs down and protect AHPETC’s long-term financial interests,” she wrote.
She added that the Workers’ Party-run town council would continue to serve residents to the best of its ability despite the “challenging political climate”.
Ms Lim said the three-page letter aimed to clarify any misconceptions that may have arisen, as well as to update residents on matters concerning the management of the town council.
Earlier this year, a report by the Auditor-General’s Office pointed out serious lapses in the town council’s books. This sparked a two-day debate in Parliament.
Among the lapses identified was a failure to manage conflict of interest when it came to transactions involving its Managing Agent FM Solutions & Services (FMSS). Its owners were also senior party officers.
In the letter to residents, Ms Lim said AHPETC had not given contracts to friends, and that public tenders had been called in 2012.
“AHPETC does not and cannot reserve contracts for friends in a public tender,” she said, adding that a tender was not called for MA services only in the one-year period from July 2011 to July 2012.
The then newly-elected MPs had decided to award FMSS a one-year provisional contract – to ensure a smooth takeover of town management and avoid any disruptions in services to residents.
The town council is also said to have overpaid FMSS by an estimated S$1.6 million a year, over a four-year period.
But Ms Lim said what AHPETC pays its Managing Agent cannot be compared to the “weighted average” of rates that all other town councils pay.
She pointed to tables detailing the rates for residential and commercial units between 2011 and 2014, saying that there is “a lot of variation” in rates among the town councils – which reflect the different geography and requirements of each town. This, in turn, affects how they are managed.
Ms Lim added that this, and later contracts involving FMSS, were fairly priced and based on “strict reasoning” using available market information.
In wrapping up her letter, Ms Lim told residents that since the AGO report, AHPETC has made some improvements, and hired external accountants to help clean up its accounts as well as to further strengthen processes and controls.
“The work is making progress and certain financial issues will take time to resolve. AHPETC is also working towards filing its audited accounts by the deadlines set by the Ministry of National Development (MND),” she said.
MND is currently appealing a High Court decision not to appoint independent accountants to safeguard Government grants to the town council. The court did also point out that grave and serious questions had been raised about the state of the town council’s accounts.
The ministry said there is an urgent need for independent accountants to be appointed with powers of inquiry and recovery, given the “serious questions” raised about payments AHPETC had made to related parties — a reference to the town council’s managing agent firms.
The case is likely to be heard on Aug 3.