Tuesday, 10 February 2015

AHPETC AGO Special Audit - A reasonable man's response

The AGO special audit report for AHPETC may be in, but the jury is still out. I live in East Coast, right next to Aljunied GRC and for now I am willing to give Worker's Party of Singapore (WP) the benefit of the doubt. There is some documentation missing, and some hard questions still need answers, but overall, the Worker’s Party deserve to be heard before we make up our minds.

I know many of my neighbours are interested in the money issues of the Aljunied TC and watching them closely.  The key questions we have to consider are:

1. Have the WP MPs been taking money for their own personal use?

2. Have they been swindling the residents, not cleaning their areas and not providing services?

3. Have they been practising good governance?

Let’s take these questions one at a time.

1. Money for Personal Use?

There is some $6.6 million that cannot be accounted for. This may seem to be a large amount but bear in mind that the monthly collection of a town council is around $3 million.  It is not so much the money, but where it has gone.  So far, we cannot trace where it has gone, but there is no proof that it has gone into the pockets of the MPs.

What we should do: Give the WP more time to answer. Keep asking questions

2. Swindlers?

Much has been made about the related party transactions (RPT).  This is essentially what happens when the same person does the work and approves payment for it. There are no “checks and balances” – I agree. But it could be just a practical reason – the general manager Ms How certifies that the work was done and approves payment for it. Usually these are two steps by two different people but since they are small team, maybe they wanted to save a step.

The deeper problem is that Ms How is also the one receiving the money.  She and her husband own FMSS, the managing agent for the town council. And since the contracts are for large amounts - $26 million so far – this may cause some concern. But remember that the town councillors also knew that the parties were related. So they are not doing anything that was not known to the WP MPs.

What we should do:  Ask questions. Check if work was really done.

3. Good Governance?

Clearly, their governance is poor. Anyone who trades shares will know that RPT is bad news for a company. The AGO also found that there is poor oversight in the use of sinking funds – for example, $17,000 was used for a Lucky Draw event rather than for estate works. But the thing is, once they were told this, the town council did the right thing and put the money back.

The deeper problem is that of the surpluses. When they took over the council, there was a $3.3 million surplus. At the time of the audit, there was a $700,000 deficit. This is worrying because day to day, missing documentation is ok, but a deep hole of about $4 million is quite serious. But we don’t know what this means until we get a comprehensive statement from WP.

What we should do: Overall, the AGO report shows that many things could have been done better, and that there are still documents missing. For now, I say, let the WP look for these documents. Let them answer the questions posed. Let’s keep an open mind.

The only thing I want is to make sure that there are enough safeguards for the sinking funds in my own Town Council. I am willing to give the AHPETC more time to answer, but until they answer, the reasonable thing to do is to keep my own sinking funds safe. Not hand it over to them. Some may say this is kiasu, but I think it is the reasonable thing to do.

No comments:

Post a Comment