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Tag: The Workers’ Party

  • PAP Caught In Catch-22 Situation In Aljunied GRC

    PAP Caught In Catch-22 Situation In Aljunied GRC

    The ruling People’s Action Party (PAP) organising secretary Ng Eng Hen’s latest comments on PAP’s readiness for the next polls are another sign the General Election could be near, possibly soon after the National Day Rally, said political analysts.

    And ratcheting up intrigue in the forthcoming elections, which must be held by January 2017, they added, are Dr Ng’s comments about the PAP’s strategy for the electoral battle in Aljunied and the make-up of the possible new candidates it has found.

    In an interview with The Sunday Times published yesterday, Dr Ng, speaking on contesting Workers’ Party (WP) in Aljunied Group Representation Constituency (GRC), was quoted as saying: “Why would we want to field somebody that we know has a higher chance of being rejected and deprive ourselves of an office-holder?”

    Analysts said such a strategy captured the challenges the PAP faces in reclaiming the first-ever GRC it lost — its team of candidates in 2011 included several ministers and Mr Ong Ye Kung, a new face touted as a potential office-holder. Whether the WP keeps its team in Aljunied intact — headlined by party chief Low Thia Khiang and chairman Sylvia Lim — is one factor to consider, they said.

    Former Nominated Member of Parliament Eugene Tan said the PAP is caught in a Catch-22 situation: “Putting heavyweight candidates may reflect how seriously the party wants to win back Aljunied, but they could risk losing office-holders. However, taking the less risky option almost certainly results in a situation where WP is more likely than not to retain their seats.”

    Dr Gillian Koh, senior research fellow at the Institute of Policy Studies, added: “For things to flip in Aljunied, minimally, it will have to be the case where voters decide they do not want a WP team, or that the WP splits the two big leaders from the GRC. It will not be a vote for a PAP team.”

    What compounds the equation is the theory that the best time to claw back a constituency is immediately after it has been lost, said Associate Professor Tan. “After a while, voters could become comfortable with the fact that it has become an opposition ward, as with Hougang.”

    However, political scientist Bilveer Singh, from the National University of Singapore, said that should the WP leaders venture into other constituencies, it would weaken the party’s position and the public may “punish the WP for ‘abandoning’ them”.

    He hypothesised that the PAP could stay away from pushing the issue. “At a strategic level, Dr Ng may be signalling that the PAP can live with Aljunied being run by the WP. It is good for democracy and, yet, having exposed the problems of bad governance that Aljunied residents will have to live with, the choice will be up to the voters,” he said, referring to the scrutiny on the opposition party’s town council management.

    With Dr Ng indicating that the slate of new PAP candidates is ready, Assoc Prof Tan felt that the polls could be called within the next six months, while Assoc Prof Singh said it could be as early as weeks after the National Day Rally — normally held two weeks after National Day.

    Recent hints that polls could be held soon include Prime Minister Lee Hsien Loong’s May Day Rally speech, which observers said carried a heavy political accent, and his targeted Cabinet reshuffle in April.

    Meanwhile, on Dr Ng’s comments that the new faces from the civil service, military and police will be “in the minority” — contrary to the norm for the party — Assoc Prof Singh said the PAP may have realised it needs to recruit talent that reflects the changing socio-economic and political flavour of the nation. “The Opposition has hardly got the government-type people on its slots and has been doing well with the electorate,” he noted.

    Whether coming from the private or public sector, Dr Koh stressed that candidates need to be able to manage complexities at the helicopter-view level, as well as have a good understanding of how ordinary Singaporeans think, feel and act.

    Echoing Dr Ng, she added: “Managing a town council is the very basic criteria, and has to be done well. So whether from the public sector or the private one, the heart of service and these capabilities will be key.”

     

    Source: www.todayonline.com

  • AHPETC: MND’s Concerns Highlight Old Issues

    AHPETC: MND’s Concerns Highlight Old Issues

    The Aljunied-Hougang-Punggol East Town Council (AHPETC) says the areas of concern cited by the Ministry of National Development (MND) on its recently submitted accounts were “old issues” that have been explained previously, and that progress is being made to clear up other problems.

    Although the Workers’ Party-run (WP) town council met a newly imposed June 30 deadline to submit its accounts for the financial year (FY) 2013/2014, the MND noted on Wednesday that the accounts were already late by 10 months.

    But AHPETC responded on Thursday night saying “this is an old issue previously explained inside and outside of Parliament …”

    AHPETC chairman Sylvia Lim had said in the foreword of the town council’s annual report that its resources were taken up by an audit by the Auditor-General’s Office (AGO) from March 2014 to January 2015. As such, it was only able to secure a commercial auditor to prepare the accounts after many months.

    The MND said that AHPETC’s own auditors, Audit Alliance, were unable to verify the accounts for the third year running.

    The auditors flagged eight areas of concern, including the presence of related party transactions. This was a reference to two companies engaged by AHPETC, including managing agent FM Solutions and Services, being owned by some key officials of the town council..

    Here, AHPETC’s response was that related party transactions was “an old issue on which AHPETC has made progress”.

    It added that “any concerns will be completely removed after July 15, 2015, when the current managing agent contract expires and AHPETC is directly managed.”

    The town council also said “significant progress has been made on clearing past disclaimers”. This was a reference to the 13 disclaimers – of which three remain unresolved – raised by previous auditors Foo Kon Tan Grant Thornton in its FY 2012/2013 report.

    But AHPETC acknowledged that future audit reports were likely to still “contain qualifications relating to specific items especially handover opening balances, which remain unresolved even with the assistance of AGO, despite 10 months of extensive work”.

    MND on Wednesday also highlighted the state of the town council’s operating surplus and deficit.

    AHPETC had gone from an operating surplus of $1.1 million in FY 2011/2012 to a deficit of $1.53 million in FY 2012/2013.

    By FY 2013/2014, the deficit hit $2.01 million.

    But the town council said in its statement on Thursday that its operating deficit had increased substantially in FY 2013/2014, as operating expenses had risen.

    Meanwhile, the additional revenue it received from the collection of service and conservancy charges (S&CC) in Punggol East – which the WP won in a 2013 by-election – were more than offset by increases in conservancy, cleaning, lift maintenance, and utilities, amongs others things.

    AHPETC also took issue with the MND’s statement the town council had understated its annual operating deficit in FY 2012/2013 by half.

    “The annual operating deficit for FY 12/13 was restated in response to the findings of the AGO audit. The adjustments included corrections as well as provisions made for impairment,” it said.

    It added: “We believe that the trend in changes in AHPETC’s financial position and results of operations will become clearer following the audit (for) FY 2014/2015.”

    These accounts are due for submission to the MND by Aug 31.

    AHPETC also highlighted two points in its auditor’s report that it wanted to “draw public attention” to.

    First, that its auditors said the town council complied with the Town Councils Act in “the receipts, expenditure, investment of moneys and the acquisition and disposal of assets”.

    And second, that the auditors attested that “proper accounting and other records have been kept, including records of all assets of the Town Council whether purchased, donated or otherwise”.

    This was in response to the MND having said that AHPETC failed to comply with the Town Council Act and Town Council Financial Rules as there were lapses in tender specifications prepared by its managing agent; that sinking fund transfers were late; and that town improvement expenses were wrongly paid out of the sinking fund – points that were also made by AHPETC’s own auditors.

     

    Source: www.straitstimes.com

  • MND: AHPETC’s Accounts Exacerbate Concerns

    MND: AHPETC’s Accounts Exacerbate Concerns

    A day after the Aljunied-Hougang-Punggol East Town Council (AHPETC) submitted its overdue financial statements and report for FY2013, the Ministry of National Development (MND) issued a response, saying that the documents reinforced its concerns about the town council’s state of financial affairs.

    The MND, noting that the statement and report — submitted on Tuesday (June 30) — were 10 months late and that AHPETC required repeated reminders, said it will study the report. But it pointed out the auditors engaged by AHPETC had disclaimers of opinion in their report — the third consecutive year the town council has received qualified statements from its independent auditors.

    Audit Alliance, the auditors appointed by AHPETC, had flagged eight areas of concern, some of them similar to issues raised by the Auditor-General’s Office (AGO) in its report on AHPETC accounts for FY12/13.

    The auditors found that there was no segregation of duty between the person certifying invoices from FM Solution and Services (FMSS) for Managing Agent services, and the person approving related payment vouchers. AHPETC’s deputy general manager, who is a shareholder and director of FMSS, certified 12 invoices received from FMSS for Managing Agent services totalling S$2.1 million, and approved the related payment vouchers. The total value of related party transactions increased to S$8.5 million in FY13, from S$6.8 million in FY12.

    The auditor also found that in the case of three tenders called, the Managing Agent failed to declare whether the specifications gave preference to any particular tenderer.

    There was also no documentation on whether the tender specifications were approved by the Tenders and Contracts Committee of the town council.

    AHPETC also breached the Town Council Financial Rules by failing to make transfers into the bank account of the sinking funds as required. Its transfers were up to 15 months late and errors were discovered in the computation only after the AGO audit.

    And it paid for town improvement expenses out of its sinking fund, which is not allowed under the Town Councils Act.

    The auditor also said it could not verify whether certain items in the accounts were accurate, such as the FY13 opening balance, and the completeness of the town council’s liabilities as at March 31 2014.

    All town councils must submit their audited financial statements, auditors’ reports and annual reports to the MND by August 31 each year. These are then tabled to Parliament and a copy of the audited financial statements and any report made by the town council’s auditor is also forwarded to the Auditor-General.

    The MND noted that AHPETC went from an annual operating surplus of S$1.1 million in FY11 to a deficit of S$1.53 million in FY12 and a deficit of S$2.01 million in FY13. The town council also previously understated the annual operating deficit in FY12 by half.

    “AHPETC’s financial position has consistently deteriorated between FY11 and FY13, even though the (town council) received full government grants from MND during these three years,” the MND said. “AHPETC’s latest financial statements and reports reinforce MND’s existing concern about the (town council’s) state of financial affairs.”

     

    Source: www.todayonline.com

  • Sylvia Lim’s Open Letter To The Residents

    Sylvia Lim’s Open Letter To The Residents

    Dear Residents,

    There has been Parliamentary debate and many adverse media reports on the issue of Managing Agent contract of the Aljunied-Hougang-Punggol East Town Council (AHPETC). I am writing to you to clarify any misconceptions that may have arisen. I also wish to update you on a few matters concerning the management of AHPETC.

    Public Tenders for AHPETC Contracts

    Has AHPETC given contracts to “friends”?

    It has not.

    The fact is that in 2012, public tenders were called and advertised in the Straits Times newspaper for the contracts for Managing Agent (MA) and Essential Maintenance and Services Unit (EMSU) services. In 2014 and 2015, public tenders were also called for the MA and EMSU contracts respectively. Anyone can submit a bid for a public tender. AHPETC does not and cannot reserve contracts for friends in a public tender.

    A tender was not called for MA services only for the one year period from July 2011 to July 2012 when urgent taking over work was needed. The elected Members of Parliaments (MPs) decided to award the newly formed FM Solutions & Services Pte Ltd (FMSS), consisting primarily of managers and staff from the former Hougang Town Council, a one-year provisional contract to take over the initial management of the Town Council, without calling a public tender. This was in order to ensure a smooth takeover of town management in view of the short time on hand to do so and to avoid any disruption in services to the residents.

    Not calling a public tender for an MA contract is allowed under Para 76 of the Town Councils Financial Rules. However, the Town Councillors did not award a standard three-year MA contract to FMSS at this point, as the Town Council intended to call for a public tender for MA services as soon as possible after takeover of town management has been completed and operations have been stabilised.

    Managing Agent Rates & “Overpayment”

    You may have seen and read reports that AHPETC “overpaid” FMSS by an estimated $1.6 million a year and therefore supposedly estimated as $6.4 million over four years.

    To support this allegation a table showing 2014 Managing Agent (MA) rates of Town Councils was distributed during the parliamentary debate on 12 Feb 2015 and the Law Minister said that “FMSS charges the Town Council $14.92 for each commercial unit compared with between $4.80 and $6.65 for all other Town Councils.”, and that “FMSS charged the Town Council $7.43 for every residential unit. Others charge between $4.80 and $6.65”. He used these as the basis to derive at the above estimated overpayments, comparing FMSS’ rates with a “weighted average” of MA rates in other TCs in 2014.

    We were puzzled by the MA rates used by the Minister and hence I filed questions in Parliament to ask the Minister for National Development for more information. On 5 March 2015, the Minister provided Parliament with the tables which I will reproduce here to clarify the matter.

    Table 1 – MA Rates Per Residential Unit by Town Council (2011-2014)

    Town Council 2011 2012 2013 2014
    AHPE $7.87** $7.87** $7.01 $7.43
    Ang Mo Kio $5.08 $5.08 $5.08 $5.33
    Choa Chu Kang $5.13 $5.13 $5.06* $5.06
    East Coast $6.10 $6.20 $6.30 $5.10
    Holland-Bukit Panjang $5.95 $6.10 $6.20 $6.30
    Jurong $5.35 $5.45 $5.55 $5.55
    Marine Parade $5.13 $5.13 $5.13 $5.13
    Moulmein-Kallang $6.63 $6.63 $6.63 $5.80
    Nee Soon $6.05 $6.20 $6.30 $6.40
    Pasir Ris-Punggol $6.11 $6.20 $6.25 $5.50
    Potong Pasir $6.63 $7.80 $7.80 $5.80
    Sembawang $6.05 $6.20 $6.30 $6.40
    Tampines $5.00 $5.00 $4.79* $4.79
    Tanjong Pagar $6.22 $6.25 $6.45 $6.65
    West Coast $6.01 $6.01 $6.10 $6.21

    Note:
    * Indicates there was a change in MA during the period of the predominant rate.
    ** Derived by MND using total MA fees paid, which includes for managing parking lots, and making no distinction between residential and commercial rates.

    We make the following observation from Table 1 on MA rates for residential units:

    1) MA rates of PAP Town Councils in 2014 were lower compared to preceding years for six TCs. In 2011, there were eight PAP TCs with MA rates per residential unit over $6, and nine in 2012 and 2013. In 2014, the number dropped to five and the “weighted average” MA rate in PAP TCs was the lowest.

    2) Compared to 2013, MA rates per residential unit dropped drastically in 2014 for four PAP TCs even though the MA did not change: East Coast from $6.30 to $5.10, Moulmein-Kallang from $6.63 to $5.80, Pasir Ris-Punggol from $6.25 to $5.50, and Potong Pasir from a high of $7.80 to $5.80.

    Next, we look at the data on MA rates for commercial units:

    Table 2 – MA Rates Per Commercial Unit by Town Council (2011-2014)

    Town Council 2011 2012 2013 2014
    AHPE $7.87** $7.87** $14.08 $14.92
    Ang Mo Kio $5.08 $5.08 $5.08 $5.33
    Choa Chu Kang $5.13 $5.13 $5.06* $5.06
    East Coast $11.50 $11.50 $11.50 $5.10
    Hollang-Bukit Panjang $5.95 $6.10 $6.20 $6.30
    Jurong $5.35 $5.45 $5.55 $5.55
    Marine Parade $5.13 $5.13 $5.13 $5.13
    Moulmein-Kallang $6.63 $6.63 $6.63 $5.80
    Nee Soon $6.05 $6.20 $6.30 $6.40
    Pasir Ris-Punggol $11.50 $11.50 $11.50 $5.50
    Potong Pasir $6.63 $7.80 $7.80 $5.80
    Sembawang $6.05 $6.20 $6.30 $6.40
    Tampines $5.00 $5.00 $4.79* $4.79
    Tanjong Pagar $6.22 $6.25 $6.45 $6.65
    West Coast $6.01 $6.01 $6.10 $6.21

    Notes: * and ** as noted for Table 1 above.

    We noted from Table 2 that prior to 2014, some MAs of PAP TCs practiced charging a higher rate for managing commercial property compared to residential property. For example, the MA rate for commercial units at East Coast and Pasir Ris Punggol TCs were $11.50 when their residential rates were in the range of $6. The former MA managing of Aljunied TC, CPG Facilities Management (“CPG”), also had the same practice and hence the former Aljunied TC had a differential MA rate for residential and commercial units (see Table 3).

    In 2014, as seen from the tables, all MAs managing PAP TCs adopted the practice of charging a flat rate for MA fee for both commercial and residential units. Hence, by taking the 2014 rates only, the commercial rate of $14.92 for AHPETC stood out compared with the flat rates of PAP TCs.

    In any case, if we use the same logic of the ministers to derive at “overpayment” estimates, PAP TCs such as Tanjong Pagar (77,300 units), Nee Soon (65,000 units) and Sembawang (67,000 units) are also overpaying their MAs by around $860,000, $530,000 and $550,000 a year respectively. I am not alleging Tanjong Pagar, Nee Soon and Sembawang TCs are overpaying their MAs. My point is that comparing the MA rates of a TC to the “weighted average” of MA rates for all TCs is not a good way to judge the fairness of the rates charged by the MA. As you can see in Table 1 & 2 above, there is a lot of variation in MA rates among TCs, which reflect the different geography and requirements of each town.

    Fair-Pricing the MA Contract in an Uncompetitive Situation

    During the parliamentary debate, the Law Minister also brought up Tampines and Choa Chu Kang TCs because these towns are supposedly comparable to or host a similar number of units as AHPETC. Incidentally, these two PAP TCs also charged the lowest MA rates in 2014 (see Table 1). The contrast is there, but Tampines and Choa Chu Kang are not easily comparable to AHPETC because all towns are different in terms of geography and other town characteristics that affect how they are managed.

    As stated earlier, we decided to award FMSS a one-year provisional contract to ensure a smooth transition to avoid any disruption in services to the residents before calling for a public tender in 2012. The question was how to fairly price the one-year MA contract.

    Reasonably, we used the contractual MA rates agreed to between the former Aljunied Town Council and their MA, CPG, as our reference point for fair-pricing the MA contract (Table 3). There was no reason to doubt the professionalism of the former Aljunied Town Council in contracting the following MA rates with CPG. More importantly, we believed, as evidenced by the varying MA rates in Table 1 & 2, the contractual MA rates with CPG reflected the cost of managing the bulk of the town in terms of its unique geography and town characteristics.

    Table 3. CPG’s contractual MA rates for Aljunied TC

    Period Residential Commercial
    1 August 2010 – 31 July 2011 $6.03 $12.80
    1 August 2011 – 31 July 2012 $6.37 $12.80
    1 August 2012 – 31 July 2013 $6.73 $12.80

    Hence, when Aljunied-Hougang Town Council (AHTC) appointed FMSS as MA for one year, the contract provided for the taking over of the management of the former Aljunied TC at the same MA rate agreed between the former Aljunied TC and CPG for that year (1 August 2011 – 31 July 2012). In other words, our contract with FMSS was substantially the same as CPG’s contractual MA rates for the second year, $6.37 for residential unit and $12.80 for commercial unit (highlighted in Table 3). This was the first cost component for the one year transitional contract. However, there was a second cost component that covered the taking over of the existing staff of the former Hougang Town Council at their existing salary, and also some additional staff who had to come in to prepare for the handover before the actual handover date.

    In its tenders for MA services in 2012 and 2014, AHPETC did not receive competing bids. Only FMSS submitted a bid for our public tender for MA in 2012. In the absence of a competing bid, we again returned to the CPG contractual rates and used the third year rate (2012) as the reference point (Table 3).

    We awarded FMSS the MA contract at the contractual rate for residential units of $7.01 for 2012/13. This rate represented a premium of approximately 4% compared to the third-year CPG residential rate of $6.73 for 2012. We also assessed the increase in the MA fees to be reasonable for several reasons, including the need to operate an additional TC office in Kaki Bukit and the lower economies of scale enjoyed by FMSS as a smaller operator compared to CPG. We were also aware of the MA rates in several PAP TCs being in the range of $6 to $7 at the time of the tender i.e. in 2012.

    The subsequent rise in FMSS’ contractual MA rate from $7.01 in 2012/2013 to $7.43 for 2013/14 for residential units mirrors the annual 6% rise in the CPG contractual MA rates for residential units.

    To summarise, our contractual commitments with FMSS have been based on strict reasoning using available market information in 2012 when tender was called in the absence of competing bids, while placing residents’ interests in undisrupted services at the forefront.

    Follow-ups on the Report by the Auditor-General’s Office

    AHPETC underwent a rigorous 10-month audit by the Auditor-General’s Office (AGO) in 2014. The AGO found some areas where there had been lapses in financial management and weaknesses in controls. AHPETC has made some improvements and has also acted promptly to hire external accountants to assist to clean up its accounts and to further strengthen its 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.

    Transition to Direct Management

    Come July 2015, we will be embarking on direct management of the TC, as no MA 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. On behalf of my fellow MPs and Town Councillors, I would like to thank you for your concern and support. Despite the challenging political climate, we will continue to serve you to the best of our ability.

    SYLVIA LIM
    CHAIRMAN
    ALJUNIED-HOUGANG-PUNGGOL EAST TOWN COUNCIL

    June 2015

    This letter was extracted from the June 2015 edition of Good Neighbours newsletter.

    Click here for the Open letter in Chinese

    Click here for the Open letter in Malay

    Click here for the Open letter in Tamil

     

    Source: www.ahpetc.sg

  • AHPETC: No Managing Agent Has Submitted Bid

    AHPETC: No Managing Agent Has Submitted Bid

    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.

     

    Source: www.channelnewsasia.com