Tag: AGO

  • Damanhuri Abas: Ministers Must Be Held Accountable For Lapses In Financial Management In Their Ministries

    Damanhuri Abas: Ministers Must Be Held Accountable For Lapses In Financial Management In Their Ministries

    In the name of God, the Most Gracious, the Most Merciful.

    On Thursday, the AGO released its report on serious and major lapses in financial management across several government Ministries and Statutory Boards  across Ministries, to the tune of hundreds of millions of tax-payers money.

    The Singapore government has always pride itself for its much vaunted so-called corrupt free practices and non-tolerance to any corruption. But this revelation from the AGO clearly provides evidences that may show otherwise.

    Singaporeans first need to salute and congratulate the AGO for being courageous in reporting the truth of financial lapses that may be pervasive across the government sectors. And it really begs the question of the kind of flimsy oversight being practiced under the watch of the million-dollar paid Ministers.

    Surely it is only just and fair for Singaporeans to expect a much better job by those premium paid Ministers. Or are they becoming precisely sloppy due to their own self being extremely cash-rich making them lacksadalsicle towards public money under their care.

    Firstly, Singaporeans demand to know from Ministers running those Ministries and Statutory boards their explanations for these serious financial lapses in their respective Ministries. Why and how can it be possible that given the enormous powers vested to them and the people they had assisting them, yet they failed miserably in supervising and ensuring such wastage of public funds given to their care by tax-payers who had to slogged it our tireless for their hard-earned money to pay taxes.

    Secondly, there are plenty of precedents of cases that were given much publicity in the press that led to jail terms to several individuals for lesser amount of money involved, such as the recent case of Hari Raya lighting involving Majlis Pusat. This case involved some inflations of invoices for payments while not going into the pockets of the management team involved, were deemed as CBT worthy cases. And now the expose by the AGO are plenty of worst cases of possibly CBT worthy ones such as the gross inflation of consultation fees of $410,000 for a Bin construction that only cost $60,000. Clearly someone pocketed much public money here.

    For these and many more reasons of consistency and transparency that the public demands accountability by all the Ministers whose Ministries were flagged by the AGO, for the clear failure of oversight.

    What is more fundamental here is the need to call these Ministers to task as they were only a while ago demanding such serious consequences to WP and its leadership for alleged financial lapses involving the AHPETC. Ministers were so bold as to even call for severe action even for hara-kiri as a benchmark for lapses of management of public money. Now these same Ministers have been very silent when they are now caught for much bigger quantum of losses of public money that they are responsible for.

    Singaporeans must not allow the AGO report to go quietly away but must insist that Ministers come clean and explain the serious failures of their own governance of public money and must take the full responsibility for it. Singaporeans remember clearly that these Ministers are paid premium justified precisely on terms that now dictate consequences upon their failures of duty.

    The government must now walk their own talk.

     

    Source: Damanhuri Abas

  • Parliament To Debate Lapses Highlighted in AGO’s Audit Of  WP’s AHPETC

    Parliament To Debate Lapses Highlighted in AGO’s Audit Of WP’s AHPETC

    Parliament will sit today, with the Auditor-General’s report on the audit of the Aljunied-Hougang-Punggol East Town Council (AHPETC), as well as the calculation of public transport fares on the agenda.

    A total of 45 questions were submitted by Members of Parliament for this sitting: Thirty-three questions for oral answer and 12 for written answer.

    Minister of National Development Khaw Boon Wan will move a motion on the Auditor-General’s report on the AHPETC, which flagged major lapses in “governance and compliance”.

    The Ministry of National Development will call for a stronger legislative framework for town councils, in order to hold those responsible for their good management to proper account, and will also call on all Town Councils to uphold high standards of accounting, reporting and corporate governance to safeguard residents’ interest.

    The Members of Parliament have also submitted questions on a wide range of topics, covering childcare centres, public transport fees, the Productivity and Innovation Credit scheme and the rental or sale of HDB flats, among others.

    The State Lands (Amendment) Bill and the Land Acquisition (Amendment) Bill will be introduced during this Parliament sitting. The second reading for the Deep Seabed Mining Bill will also be deliberated.

    The report by the Auditor-General following its audit of the Aljunied-Hougang-Punggol East Town Council (AHPETC) revealed that key individuals running the town council also have stakes in companies it hired to manage its estates.

    Experts have said that in cases where there are such conflicts of interests, a possible solution may be to have an independent body overseeing some of the town council’s management processes, such as when it calls for tenders.

    Lapses in the management of related party transactions were among the findings in the Auditor-General’s report that was released on Monday (Feb 9).

    The Auditor-General’s report found that AHPETC had hired two managing agents to carry out estate maintenance services. One of these was FM Solutions and Services Management (FMSS), which was first set up in May 2011.

    FMSS’ managing director, general manager and two deputy general managers are shareholders in the company. They are also on the management board of the AHPETC – holding the position of secretary, general manager and deputy general managers.

    AHPETC’s secretary also owns FM Solutions and Integrated Services (FMSI), a sole proprietorship. FMSI was engaged as a managing agent to manage precincts under the Hougang Town Council from April 2011 to June 2012.

    Among the lapses highlighted in the Auditor-General’s report, it was found that a fee of S$1.28 million paid to the two companies for services during the financial year of 2012 to 2013 was not recorded in its financial statements.

    Invoices made to the two companies were also issued and signed by the town council’s general manager and secretary, who were acting in their capacity as director of FMSS and owner of FMSI respectively.

    The report said the town councils did not adequately manage the conflicts of interests that arose.

    Associate Professor Mak Yuen Tee, who is with the National University of Singapore Business School, said: “The minimum is to declare and make people aware that you have those conflicts, to then not be involved on both sides of the transactions. In other words, you should not be verifying the payments and then approving the payments.

    “Ideally, you want a situation where you are not sitting on both sides – either you step off the town council or you do not get involved with the managing agent.”

    A possible alternative is to have an independent body overseeing some of the management processes like tenders for projects where there might be potential conflicts of interests.

    Assoc Prof Mak added: “If you need estate management services, one issue would be what are the available options out there. If you call a tender, are you able to get different organisations to participate in the tender?

    “I am involved in organisations where we call tenders and sometimes you do not have enough options and you end up selecting from a list of one. Ideally, you do not want that to happen but sometimes it will. If that happens and you end up in a related party situation, then that is where you need to take steps to mitigate that by involving people who are independent to review and to approve.”

    Another solution is to develop or adopt a framework that can help the town council improve its management processes and manage risks.

    Mr Sidney Lim, managing director of Protiviti Singapore, a company that deals with corporate governance, said: “The framework essentially looks at the three different risks that organisations face – the compliance risk, operational risk and reporting risk. And what is in the framework is a series of processes as well as components to help them manage and improve on corporate governance.”

     

    Source: www.channelnewsasia.com

  • AGO Finds Governance Lapses In WP-Run AHPETC

    AGO Finds Governance Lapses In WP-Run AHPETC

    The financial affairs of Aljunied-Hougang-Punggol East Town Council (AHPETC) will be in the spotlight in Parliament on Thursday (Feb 12), after the Auditor-General’s Office (AGO) issued a report finding lapses in governance and compliance by the town council.

    These lapses, detailed in the report issued today (Feb 9), include failing to transfer monies into sinking fund bank accounts as required by the Town Councils Financial Rules, and inadequately managing conflicts of interest when it came to procuring services for the Workers’ Party-run town council.

    The Auditor-General also found that there was no proper system for monitoring service and conservancy charges arrears, and internal controls were poor, which could lead to wrong payments for goods and services. The town council also does not have a proper system for record management and accounting, which led to it being unable to provide relevant documents for audits. As such, its financial statements did not accurately reflect its state of affairs and transactions, the Auditor-General found.

    “Unless the weaknesses are addressed, there can be no assurance that AHPETC’s financial statements are accurate and reliable and that public funds are properly spent, accounted for and managed,” the report stated.

    The Auditor-General was last year directed to conduct an audit of the AHPETC’s accounts for FY2012-13, after independent auditors said they were unable to express an opinion on the town council’s financial statements for the second consecutive year. The auditors, Foo Kon Tan Grant Thornton, said they could not determine if items worth more than S$22 million were valid or accurate.

    A copy of the Auditor-General’s report was submited to Finance Minister Tharman Shanmugaratnam and National Development Minister Khaw Boon Wan last Friday (Feb 6). A copy was also given to AHPETC the next day.

    In a joint statement, the Ministry of National Development and Ministry of Finance said National Development Minister Khaw Boon Wan will move a motion on the AGO report when Parliament sits on Thursday.

    For the full report, click here

    Below are some examples of the lapses.

    Lapses in management of sinking funds

    – Under Town Councils Financial Rules, town councils must make the necessary transfers to sinking fund bank accounts within a month of the end of each financial year (FY) quarter. These funds are separately maintained for improvement and long-term maintenance of properties.

    – For FY2012/13, AHPETC only transferred S$1.5 million to the sinking fund in Feb 2013. It transferred another S$2.74 million in Jan 2014, but this was still less that what was required under the rules. Following the AGO’s query, AHPETC transferred another S$1.2 million in June 2014.

    Lapses in governance of related party transactions

    – AHPETC’s key officers had ownership interests in two companies engaged by the town council for estate services — FM Solutions & Integrated Services (FMSI) and FM Solutions & Services (FMSS)

    – FMSI’s sole proprietor is AHPETC’s secretary Danny Loh Chong Meng. He is also one of FMSS’ directors and shareholders, together with his wife AHPETC general manager How Weng Fan and deputy general managers Yeo Soon Fei and Johnson Lieow Chong Sern

    – On two occasions for contracts worth S$5.2 million and S$20.7 million, no evidence was found to show that there were proper disclosures of the interests of the related parties, the conflicts of interest, and an assessment of safeguards, before AHPETC entered into agreements with FMSS.

    Lapses in management of conservancy and service charge arrears

    – AHPETC’s conservancy and service charges arrears report submitted to Ministry of National Development for March 2013 showed 4,379 units with arrears of three months or more. But its report submitted to its Finance and Investment Committee showed 17,502 units in arrears for three months or more as of March 31 2013.

    Lapses in internal controls and procurement

    – On one occasion, AHPETC awarded a contract amounting to S$88,346 without calling a tender. The cost later increased to S$101,641 due to changes in scope of work and this was only approved by the AHPETC chairman, although it should have been approved by the town council under the Town Councils Financial Rules

    – Waivers of quotation for purchases were approved by AHPETC deputy general manager, but no documentation was provided to show that he was delegated the authority to do so

    Inadequacies in record management and accounting system

    – AHPETC could not find the accounting documents for April to July 2011, resulting in its auditor being unable to issue an audit opinion for the town council’s FY2011/12 financial statements

    – AHPETC did not record lift upgrading programme expenses in the financial statements for the years in which the expenses were incurred. As a result, there were understatements of about S$240,000 and S$8.14 million in FY2010/11 and FY2011/12 respectively. There was also overstatement of S$8.38 million in FY2012/13.

     

    Source: www.todayonline.com