Singapore General Election 2015: Hougang-Gate

(1)    Png Eng Huat and Low Thia Khiang  declared that Hougang Town Council (HGTC) was always in the black. Not true.

Based on the TC’s own accounts, HGTC had operating deficits of $96,000 for 2008 and $102,000 for 2009 and $92,000 for 2010 (ending Mar 2011). Fact is they have been spending more than their income every year.

(2)    Png Eng Huat and Low Thia Khiang said that Hougang had a surplus when it merged with Aljunied. Half-true-deliberately misleading. 

(3)  Low Thia Khiang declared that there was no need for Hougang to merge with Aljunied. Not True.

Any book-keeper or accountant will tell you that the financial state of the TC is determined at the end of each year when the  income collected each month and expenses spent each month are totalled and squared. For instance, if you look at your own finances in a year, on the month you get  your bonus, you probably have a surplus. But when you add up the expenses against your income for the months in the rest of the year, your bankbook and bills will tell you whether you are spending more than you earn or not and whether you have savings (surplus) or debt.

What Low and Png did was to carefully select a month (May 2011) at the start of the financial year (which starts on 1 Apr 2011) to create a false picture of a surplus when in fact their finances reflected a pattern of deficit in Hougang which began in 2008. But by merging the Hougang accounts with Aljunied, they ensured that this will be buried from public view.

The TC’s own auditors, Kelvin Wong & Co,  on Mar 2011 stated that there is uncertainty over the adequacy of operating funds and that the HGTC’s so called surplus is just a snapshot and is not a good reflection of the TC’s finances because bonuses, property tax, GST expenses, etc were included in the financial report. In short, he is saying to Hougang TC that you are rich on payday, but actually you are in debt  because you have not settled all your bills and still spending more than you earn.

The Story of FMSS: More than meets the eye

More to it than meets the eye: the story of FMSS

The numbers speak loudly enough for themselves – FMSS and its owners have clearly managed the TC to their own advantage and profiteered from it. In all, $3 million dollars in salaries, fees and profits last year– crazy margin - three dollars out of every S&CC ten dollar spent on the MA is sheer profit and benefits for the 4 owners. What adds insult to injury is that while they got paid big bucks, they didn’t even deliver a basic standard of administration and financial system to past muster under the TC’s own auditors. Four years this went on until the AGO audit exposed the mess the TC was in. Then Sylvia Lim finally had to step in and try to clean up the mess.

What is really difficult to comprehend is Sylvia Lim’s defensive reactions over FMSS. Each time, the TC screwed up – which means FMSS screwed it up - as highlighted by their own auditors, she will defend the FMSS with spurious and some plainly, false assertions.  When all else fails, she hide behind the argument that their relationship with FMSS is purely commercial and the contract was awarded via open tender bla bla bla. When AGO found a case of FMSS having misled the TC which wound up paying 40 % more than was rightly the amount, she trivialised it as a mathematical error and even took personal responsibility as Chairman of the TC for the “mistaken overcharging” by FMSS. Now when confronted this week with the glaringly obscene profits that the FMSS owners made off the TC, she dismissed it and declared there has been no overcharging by FMSS. 

The latest distraction she is trying to throw smoke with is that the Government shouldn’t look into all these things (even if it involved public monies) and that all this is an abuse of Government power. Are you kidding? As an elected MP, she has a legal duty to manage the TC conscientiously and safeguarding the residents interests and monies is at the heart of that.  No different from the Government, namely MND which oversees the TCs under the TC Act. This  duty of the office - of the elected MP of AHPETC and of the Minister for ND - requires that no stone be left unturned and that no one looks the other way to find out if residents have indeed been short-changed and overcharged by FMSS. The public has a right to know what the hell happened in the 4 years that the FMSS ran the TC, laughing to the bank but leaving behind such a huge rotten mess brewing under the façade of efficient enough cleaning services and other visible activities, which lull residents to believe that everything in the TC is hunky dory.

When you research and trace the facts, the picture that comes out tells you that there is more to FMSS than meets the eye. I have no doubt that FMSS was set-up at the initiative of the WP leaders. It was incorporated on 15 May 2011,  13 days after the GE; preparation for incorporation – collect/submit forms and getting lawyers to draw up incorporation documents - probably occurred at least a week before that. All this happened before CPG spoke to Sylvia expressing wish to terminate their service as the MA. In an interview reported in Straits Times (19 Aug 2011), Sylvia revealed that CPG asked to be released from their MA contract in “late May”

Ms How and her husband, Danny, long time supporters of the WP, were trusted aides who ran Hougang TC. They managed to put up almost $500,000 in a jiffy as paid up capital for the new company. And most telling, the company was set up as a “limited exempt private company” which means that its annual accounts need not even be submitted to ACRA . Completely out of public scrutiny.

There was obvious pre-meditation and strategy by the WP in the formation of FMSS. They had a hand in forming it, more than they have disclosed. To be fair, they had just won a GRC and were obviously nervous about trusting the CPG who had been running the TC under the PAP. They needed to rely on their own people. The FMSS was a WP trusted and WP aligned entity from the point of its creation. In my view, there is nothing wrong with what they did, even if they chose to keep it secret. No big deal, they did what they had to do. This is politics, man.

The story however starts to go bad after FMSS took over running the TC and ran it to the ground. Ms How, used to being her own boss under Low Thia Khiang in Hougang, ran AHPETC like the way she ran Hougang. Sylvia Lim had little control over her even when Ms How behaved in a rude and disrespectful manner to her - there was little she could do about it. But the truth it, Sylvia was quite happy not to have to deal with boring, mundane stuff like running a TC. She had her sights on higher things, they were on a roll, everyone in the WP was politically high. So no surprise, that in the same ST interview reported in Aug 2011, she assured that the party can run the TC and has set aside the first 6 months after the GE to focus on the TC and after that “ a few months down the road, we will start to think about the next general election and the new areas we would like to contest”

Four years passed – disclaimers piled up each year by their own auditor – FKP - as the TC under FMSS couldn’t even produce a clean set of accounts. I recall that the High Court Judge Quentin Low said that in another setting, this state of affairs would have led to civil if not criminal sanctions. What FMSS was guilty of was incompetence and greed. What Sylvia and her fellow WP MPs were guilty of was negligence arising from the arrogant belief that running a TC was no big deal. She had assured voters that the WP can easily run a GRC TC and were ready.  She thought she could have the challenge of running a GRC TC done in 6 months and then just focus on politics.

This under-estimation of the complexities of a GRC level TC management and over-estimation of the experience and expertise of FMSS is the root of why things went so wrong in AHPETC. This is why Sylvia assumed that the PAP’s AIM IT system contract would not be renewed and never bothered to ask; indeed like FMSS, the WP preferred to have their own system over which they had total control. Sylvia asked AIM for short extensions to get her own system going and this was acceded to; she even thanked AIM at the end of it all. But when things go wrong because of FMSS incompetence (even manual records got lost and couldn’t be traced), Sylvia blamed AIM. When their own auditors raised a list of growing disclaimers, Sylvia blamed “handover issues” implying that George Yeo fixed them up – this was a constant and tiresome refrain until debunked. The fact is the “handover” of documents and records was between the CPG and FMSS held under the supervision of the TC with Sylvia at the helm. Poor Georgie boy had nothing to do with it. I heard that when CPG left after a proper handing over records with FMSS signing for all documents received, Sylvia hosted a big makan to thank the CPG folks for staying back and handing over properly to ensure a seamless transfer. (Sylvia’s reflex to deflect and blame others seem deep seated.More recently she blamed deficits in the past to MND withholding their grants – the facts are completely the opposite! AHPETC TC was in deficit for those years when they had the full grants (FY 12/13, FY 13/14)  and they reported an operating surplus for FY 14/15, the year when the grant was withheld!)

When the AGO auditors went in to do a special audit of the TC , they were horrified to find that the TC’s archival and record system consisted of a room full of piled up boxes overflowing with documents.  No proper record keeping and many missing records, some conveniently so for FMSS as related third party transactions were found to be an issue by the AGO and even later by the TC’s own auditors. What was Sylvia and her MPs doing during all this time?  To be blunt, they had been sleeping on the job, underestimated the challenge of running a GRC TC and trusted the wrong people to do it but who screwed them. The only problem is because the monies are all residents’ monies, the ones who got royally screwed are the residents of AHPETC and many of them till today don’t even know it.

Sylvia makes a fine speech about the duties of MP looking after the TC. During the 2011 GE, she assured the voters that she and her team have the experience to run a GRC TC – no fear.  But the truth is she didn’t bother to spend any time looking after the TC. Hubris led her to presume that she could just oursource her duties to look after the TC to a trusted MA like FMSS and focus on cultivating her political ambitions. Indeed I recall seeing her on stage pleased as Punch when her fellow MP, Pritam Singh commended her to the rally audience as a political leader with Prime Minister material (aiyoh ).Some of you may recall it too. (Anyway the bloody PAP machinery makes sure you don’t forget it by running the footage ad nauseum on the social media.)

A word on the FMSS people. I know that there is no love loss between Sylvia and Ms How. Danny who died suddenly has been a victim of sorts too. By all accounts, he was a nice man and it is really quite nasty of Sylvia of constantly press him for recovery of monies and when he agreed, changed her mind to demand for even more. ( A FMSS staff told me that Danny was a good boss and FMSS a good and fair employer). As a lawyer Sylvia should have worked through proper legal channels but she wanted to do it confidentially for political damage control reasons and so she kept putting pressure  Danny personally to cough up more monies on the grounds of overpayment due to poor service. ( This is completely at odds with  Sylvia’s public assertion later that payment according to contract cannot be overpayment!) Sylvia of course didn’t dare to deal with Ms How as the fiery woman would probably have kicked her in the groin ( slapping is reserved only for use by WP candidates J).

I have always thought that Sylvia was a nice  damsel and Ms How was the bad egg; but I have revised my view since researching this story – Ms How is abrasive, hot tempered and cantankerous, a  rough diamond, but what you see is what you get. Sylvia is really a devious character (maybe politics have changed her) and she has shown herself to have no compunction to lie in your face. She is of course under great pressure too because she is left to shoulder this AHPETC-FMSS mess by herself and some of her fellow MPs have clearly distanced themselves from her on this issue.

Anyway back to the story: a  business is driven to make profits; it is not a charity. So I suppose one can argue that there is really nothing wrong for FMSS owners to pursue profits; they are not obliged to save for the TC. On the other hand, it is the elected MPs whose job and duty it is to oversee and manage the MA and ensure that they don’t profit at the expense of the residents. No checks, no balance. The WP MPs failed in their duty because the buck ends with them – final responsibility for managing the TC rests with them, the elected MPs. 

The Government wants to do a forensic audit of the 4 years of TC accounts when the TC was run by FMSS. Eventhough Sylvia has found instances of overcharging and was exposed trying to recover monies from FMSS privately, she resists any such forensic audit.

I am glad that Sylvia has finally took charge of TC affairs since Mar this year. But she must stop “protecting” FMSS in order to exercise political damage control to avoid the public knowing just how much their friends have screwed them and the residents, right under their noses for four years.

The PAP is not going to win back Aljunied this GE. You can bet on it. No need for Sylvia to be so kiasu and kiasi. Do the right thing even if the truth turns out to be inconvenient politically. Because in the long run, you will be politically stronger for it.

It is time for Sylvia to take ownership and not keep on sweeping this FMSS-TC episode under the carpet. Afterall she has taken the first steps already and have as reported in her latest audited accounts cleaned up the shit and improved the situation. She cannot pretend not to have an inkling of what a mess she is left with in the TC, she cannot pretend that the last 4 years under FMSS didn’t happen. Time to step up and do the right thing. Do a forensic audit and get it cleaned up once and for all.

“The bottom line is this: We are responsible to ensure that the town runs well. The managing agent is employed for their professional expertise, and they have to deliver ….We are quite well aware of the need to be careful with these monies which come from the residents and also from government grants. We will definitely want to protect these monies” (Sylvia Lim, ST 19 Aug 2011)

I believe Sylvia Lim meant these words when she said them then. Time for her to go back and live by them and stop ducking the problem.

AHPETC Financial Report FY2014/2015

AHPETC, now directly run by the Workers' Party, proudly announced that they have submitted the statutory required documents on time. If one did not know the full story, one would be surprised as to why there is great fanfare for an organization to do what it is required by law to do.

Accompanying that announcement, was also a statement that AHPETC had achieved a slight surplus for Financial Year 2014/2015. In and of itself, these 2 statements convey to the layman that all is fine in AHPETC. Unfortunately, what the two statements failed to do,  which they were deliberately designed to do, is to tell the truth about what went on and is still going on in AHPETC.

The following infographic tells you what AHPETC does not tell you .... or want you to know. #sharethetruth #ge2015 #sgelections

AHPETC: Observations from a Former Town Council GM

Observations of a Former Town Council GM

Reading the news report today “AHPETC faced losses while agent’s profits jumped 300%” shocked me. Being a former General Manager (GM) of a Town Council myself, it is  quite unbelievable that the APHPETC is running into deficit and yet correspondingly, their Managing Agent, FMSS is making so much profits. In fact, anyone who has ever operated a business will know that it is impossible for services based business to earn an after-tax profit of 36%, let alone an after tax-profit of 36% after paying $1.14 million in director fees. Either the client is downright dumb and is willing to be milked, or the client is complicit. Even the Orh Luak man at the Old Airport Road market cannot earn so much.

The best that my TC ever earned in a year is 10%. But these were few and far between. A typical TC's profit margin is on average 5%. FMSS' profit margins without the benefit of scale is phenomenal by any standard. 

Like many of my friends in this industry, I had smelled a rat. Unfortunately the gang at AHPETC were tight-lipped and nothing ever slipped. Given the cash cow they were sitting-on, I now know why. Afterall, who would want to kill the goose that lay the golden egg? Now that everything is coming to light, I think it is time for me to share my thoughts ...

a. Monthly S&CC. It is impossible for a TC (or any business for that matter) not to know its monthly S&CC arrears. Anyone that can accept that it takes a complicated system to calculate this is obviously blinded to logic. AHPETC's decision to stop submitting their S&CC arrears is clearly a ruse. The form requested by MND is a simple matrix that any 1st year accounting student can fill. We should also not forget, that the Hougang TC and even AHPETC had been submitting it according to the table for several months before it suddenly became impossible for them to do it. My guess, AHPETC wanted to build the perception of Government bullying.

b. AGO Audit. When it became impossible for AHPETC to politically deny an AGO audit into their books, AHPETC switched tactics to one of hiding information. Thus when basic accounting information like starting bank balances were asked for, AHPETC blamed George Yeo. This misdirection was subsequently dismissed when AGO discovered evidence that AHPETC themselves had certified in a handing and taking over documents that all the information was provided. When this happened, AHPETC then began to blame the political environment and how no one wanted to work for AHPETC. In reality, nothing had changed. The same sub-contractors that did work for Ajunied under George Yeo, continued to do work for AHPETC. In fact, almost all of AHPETC's sub-contractors do work for both PAP-run Town Councils and AHPETC. Here, AHPETC continued to build on the perception of Government bullying but also started playing I am a victim of the circumstance card.

Despite what AHPETC or the WP tries to say, one thing is for certain. A mess existed and there is something definitely wrong at AHPETC. Given Sylvia Lim's assurances that FMSS had been providing excellent services to the residents of Aljunied, Hougang and Punggol East, I am surprised that the WP had not renewed FMSS' contract. Also, given the fantastic profits to be made, I am equally surprised that FMSS did not re-tender for the contract. Perhaps all is not well at AHPETC. All that is left for me to say is that now that the WP has decided to take over the role of running the TC themselves, it remains to be seen if Sylvia Lim will be able to sort out the mess.

My only hope is that the residents of Aljunied, Hougang and Punggol East are not made to suffer for Sylvia Lim's incompetency or whatever you want to call it.

Is AHPETC in Financial Trouble

Is AHPETC in financial trouble?

A simple matter of three points and one question ...

What is Sinking Fund?

The Sinking Fund is a long term savings fund required by law. The Fund is to pay for repair and replacement of major things like lifts and electrical re-wiring.

For instance, over the next 10 years, AHPETC needs to pay $54m from SF just to replace lifts in the older blocks. That leaves only $55m from its current SF to do many other essential works:

· Repairs and Repainting of over 700 blocks (which alone may be as much $100m if not more)

· Implementing LUP (this can be as much as $20m)

· Electrical Re-wiring

· Repair and Replacement of old sanitary pipes

· If there is not enough money in the SF, these critical things will not get done. Residents affected will suffer.  Their property value will drop.

· The TC meeting its SF requirements on time therefore is critical

How is Sinking Fund Collected

Each month every TC collects S&CC from residents. Every 3 months, the TC is required to deposit one third of the total S&CC collected into the SF.

In addition, the Government gives the TC an annual grant. One third of this must also be paid into the SF. The rest is up to the TC to use.

What is the Sinking Fund Situation in AHPETC

AHPETC has defaulted on their SF payments. Their present outstanding SF deficit is $9m. AHPETC will have to pay another $13.5m into their SF for the rest of this financial year (FY2015/16). AHPETC therefore needs a total of $22.5m ($9m + $13.5m) to meet their SF obligations this financial year. 

MND currently holds $14m grants due to AHPETC because their accounts have not been cleanly passed by their own auditors. At the Sylvia Lim’s request, MND is prepared to release the grants if the TC furnishes its latest financial status.  AHPETC has chosen not to give the info despite many reminders.

When MND releases these grants,  $4m must be deducted upfront for additional deposit into the SF. This leaves $10m for the TC to use.

This $10m is not enough to cover the AHPETC’s SF requirements for this financial year. The TC needs to find another $12.5m this financial year to do so from their operating account.

One Simple Question Sylvia Lim Needs to Answer to Residents

Under George Yeo’s team, the TC ran an annual operating surplus of $3.3m. Under the WP, this has turned into an annual operating deficit of $1.5m by early 2013.

Their latest financial situation is unknown because they cannot even produce a clean set of audited accounts for the last 3 years. Whatever it is, the negative and downward trend known so far must give residents cause for concern.

Residents should ask Sylvia Lim to state plainly and honestly: 

· How much surplus money they have in the TC operating account after paying off all bills and meeting SF obligations this financial year.

Residents have a right to know the truth. Is the AHPETC boat leaking and sinking slowly into eventual insolvency? 

MND Rebuts TOC's Distortions on AGO Report

TOC Targets MND Over AGO Accounting Lapse

Andrew Loh's The Online Citizen (TOC), the defacto mouth-piece of the Worker's Party, has gone on over-drive to attack the Ministry of National Development (MND). This is because MND is the government agency that is taking the Worker's Party managed AHPETC to task over the alleged misappropriation of public S&CC grants.

 

In a 18 July 2015 article, TOC accused NParks of: (a) a series of serious accounting lapses of several years involving tens of millions of dollars for the Gardens by the Bay project; and (b) challenged MND's statement that the integrity of the procurement process has not being comprised.

 

True to their lack of journalistic integrity and hidden agenda to mislead Singaporeans, TOC has deliberately disseminated distortions and untruths. The truth of the matter is that:

 

a.    there was only one audit carried out by AGO. The observations cited by AGO came from the audit conducted between August 2013 to June 2014.

b.    MND verified that checks were carried out for the transactions in question, it AGO and MND were satisfied that payments made to suppliers were supported by purchase orders and approved. No exceptions were noted except for two overpayments to suppliers which had been recovered.

 

In short, unlike the situation with AHPETC, MND has been open on the matter and has held the officers involved accountable. Before TOC accuses MND, TOC should look at their own party. One must surely question TOC why they give so much credibility to an AGO report on MND, but dismiss AGO's report on AHPETC.

AGO Finds Lapses in PA's Financial Management System

Yes, it is true! The independent Auditor-General Office (AGO) found lapses in People's Assocation's (PA) financial management of funds. This is the same AGO who after auditing AHPETC, found that "there can be no assurance that AHPETC’s accounts are accurate and reliable, or that public funds are properly spent, accounted for and managed."

 

As expected, opposition supporters were quick to jump on the bandwagon to draw similarities between the PA and AHPETC. While there are some similarities, what they fail to acknowledge is that there is a significant difference in how the lapses are being handled. Organizations of respectable sizes are bound to have lapses. It is impossible not to have them as the large numbers of people and transactions make it a mathematical certainty that it will happen. What is more important, and this alludes to the character and value of the organization and its management, is how the lapses are handled.

 

In the case of AHPETC, the Worker's Party continued to hide, lie and mislead the public. Instead of being open and transparent, they continue to keep crucial information and records from even their own appointed auditors. Even after their promise in Parliament to submit an unqualified audited statement by July 2015, this has not happened. WP MPs have continued to dodge the issue and those running AHPETC have stayed silent. Pritam Singh even went to extent to tell Singaporeans that they do not need to answer to Parliament. In the case of AHPETC, no investigation, no accountability, no responsibility, no transparency.

 

Compare this to how the People's Action party responded to the lapses. The PA took the lapses seriously, immediately convened an investigation, accepted responsibility for the lapses and the Chairman of the Citizen's Consultative Committee (CCC) resigned from his position even before wrong-doing (if any) was confirmed.

 

Thus while we are disappointed in what has happened to the PA (and the other Government agencies named in the AGO's audit report), we are confident that, where the Government is concerned, things will always be open and transparent.

 

I hope that through this incident, Singaporeans will be able to see through the smoke and mirrors of the Worker's Party and realise the true character and values of opposition leaders like Low Thia Khiang, Sylvia Lim and gang. For the sake of Singapore, we must indeed vote wisely!

AHPETC is Insolvent ... WP #epicfail

Article originally appeared in TalkingSingapore.com

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The 2nd day of Court hearing to determine the Ministry of National Development's (MND) request to appoint an independent auditor to safe-guard public S&CC grants to AHPETC, as well as to determine if earlier public funds had been misappropriated, reached a startling conclusion.

Legal Counsel for MND, Aurill Kam, laid out the facts of the case and it was revealed that AHPETC is technically insolvent. In short, without immediate help from the Government, the opposition run town council of Aljunied, Hougang and Punggol East would run out of money for essential services as soon as next month (June 2015). This charge was not disputed by AHPETC.

Ms Kam said that it would not be an overstatement to say that the Workers' Party-run town council is "technically insolvent" and that the town council had been "economical with the truth", when its leaders told Parliament in February that it had been making transfers to the sinking fund for 2014. Payments to the fund are to be made quarterly, but at that time, the town council had already missed the payment for the third quarter.

MND maintains that unless independent accountants are appointed, fresh grants that are disbursed to the town council will not be protected, and there can be no assurance that serious steps will be taken to credibly review whether there have been any wrongful payments, breach of duty, or unlawful conduct so far.

In the mean time, residents of AHPETC have to seriously think if they can live with the consequences of their Vote. Essentially, what the Worker's Party is saying is that if your town council runs out of money, you will just have to suffer lift breakdowns and dirty corridors until the next general election. To Sylvia Lim and Low Thia Khiang, how they run the opposition ward is something between them and the voters. It is not for the Government nor the courts to intervene. To them, you live with your choice for better or for worse. AHPETC belongs to the Worker's Party and WP is the law.

The decision of the Court has serious implications for the next Singapore General Elections. If the Courts agree with the Worker's Party that there is nothing the Government can do, opposition supporters need to think carefully before they cast their protest votes. Many opposition supporters have been frivolous with their votes as they believed that even if the opposition does not do a good job, the Government would not just let things be because we’re all taxpayers after all and the grant are really taxpayers’ money.

Anyway, it’s in court now. Even if the residents decide that they wanted to do anything, there is nothing they can do. Perhaps Mr Lee was right. You vote for WP, you will repent at WP's leisure. Nobody can do say or do anything about any failure, including misappropriation of money and bankruptcy, in the Republic of AHPETC.

AHPETC Court Case on Independent Auditor

A Fearful AHPETC Responds ... Finally

2 days before MND's application to the Singapore Courts to appoint independent auditors for AHPETC is heard, AHPETC made a surprising announcement that they have appointed their own external consultants to look into their accounts. (See our earlier article MND Moves to Protect Public Monies) While this is a welcome move, and something the Government has been asking for the past 3 years, the timing of the announcement is suspiciously political.

Coming at the eleventh hour, this move is clearly designed to delay the appointment of an independent auditor who would have full access to all AHPETC financial records. This is likely to mean that the Worker's Party is afraid that a full forensic audit of AHPETC accounts will likely reveal the following misuse of public funds:

Firstly, as mentioned in the Parliamentary Debate on the AGO's Special Audit, the AGO reported that approximately $6.1 million of public funds to FMSS and FMSI (both owned by Worker's Party supporters) was not fully justified or properly computed.

Secondly, the illegal commingling of S&CC funds and the late (or non-transfer or inadequate) transfer of residents' money to the Sinking Fund. This impacts residents as building adequate financial reserves is necessary to ensure that key community infrastructure like lifts can be upgraded or replaced for the safety of residents.

Thirdly, the gross over-payment for the services of a Managing Agent. By some accounts, this is rumored to be much as 100% above market rates for their General Manager Ms How Weng Fan. Such gross over-payment is equivalent to being an inducement for her to be less than truthful to the residents of Aljunied in order to safe-guard her own self-interest.

AHPETC: What Sylvia Lim does not want Singaporeans to know ...

In the on-going saga over the likely misappropriation of government S&CC grants by AHPETC, one common refrain we hear from Ms Sylvia Lim and the Worker's Party is that the AGO Special Audit gave them a clean bill of health. The WP is telling their residents that if there is reasonable suspicion of any offence being committed, the CPIB/CAD would have been called in to investigate. So if CPIB and CAD have not stepped-in, this proves that AHPETC has done nothing wrong.

What Ms Sylvia Lim, the Worker's Party and AHPETC have not told their residents is that the AGO Special Audit did not NOT find any criminal wrong-doing as this was beyond the scope of the audit. What the AGO Special Audit did find was that the financial reports submitted by AHPETC are not reliable and not accurate. MND has now asked for the appointment of an Independent Auditor, who will be tasked to do a forensic audit, and the CPIB/CAD will be called in once an offence is found. This is precisely why AHPETC does not want the Courts to appoint an Independent Auditor

AGO Special Audit - AHPETC Responds .... finally!

SINGAPORE: The Aljunied-Hougang-Punggol East Town Council (AHPETC) has appointed an external accounting firm to assist in cleaning up its earlier  accounts, the Town Council’s chairman Sylvia Lim announced on its website on Saturday (May 2).

The accounting firm will also "give advice on strengthening its internal controls and processes in financial management, and on internal audit matters", it added.

AHPETC also said it is "working hard" on completing its annual audits, "with a view to filing our audited FY 2013/14 accounts by 30 June 2015 and FY 2014/15 accounts by 31 August 2015".

Below is the statement in full:

INTERIM UPDATE ON FOLLOW-UPS ON AGO REPORT

"I hope this message finds you well.

"You would have noted media reports and Parliamentary debates concerning the Auditor-General’s Office’s (AGO) Report on its audit of Aljunied-Hougang-Punggol East Town Council (AHPETC) released in February 2015. The AGO had found some lapses and weaknesses that needed to be addressed.

"You will soon be receiving a letter from us giving you details of some key points from the AGO Report and Parliamentary debate, and clarifying some misconceptions that have been circulated. Due to the importance of the subject, we have taken some time to prepare this letter.

"Meanwhile, in this short interim note, I wish to inform you of two major tasks that AHPETC has since been following up on. First, on 3 March 2015, we appointed an external accounting firm to assist AHPETC in cleaning up its earlier accounts and also to give advice on strengthening its internal controls and processes in financial management, and on internal audit matters. Secondly, we are working hard on completing our annual audits, with a view to filing our audited FY 2013/14 accounts by 30 June 2015 and FY 2014/15 accounts by 31 August 2015. These tasks are critical to complete.

"The past months have been challenging, but AHPETC remains undaunted.

"At the heart of it all, AHPETC’s Members of Parliament from the Workers’ Party are mindful of our duty to be accountable to you, the residents who have put us in office to serve. You have supported us, and we will do our best despite the challenges we face. Thank you for your concern and understanding."

Sylvia Lim

Chairman

Aljunied-Hougang-Punggol East Town Council

AHPETC Saga: MND Moves to Protect Public Monies

The Ministry of National Development (MND) has on 20 March 2015 made an application to the High Court of Singapore to appoint independent accountants to safeguard Government grants to Aljunied-Hougang-Punggol East Town Council (AHPETC).

This is an unprecedented move by the Government to protect residents’ interests.

The move is in response to Sylvia Lim's demand in June 2014 to MND to release close to $14 million in S&CC grants which MND has withheld pending the outcome of the AGO's special audit. MND had withheld disbursement of the grants as they have a fiduciary duty to ensure that public funds are used correctly. With the appointment of independent auditors, MND can proceed with the disbursement and ensure that Aljunied residents' interests are not affected by the on-going saga.

Going through the courts process to apply for independent accountants would help allay accusations that the spotlight on AHPETC is politically motivated, Singapore Management University law lecturer Eugene Tan said. “I don’t think anyone would have any basis to say that the courts are being used,” he said.

By doing this, the Ministry of National Development (MND) is “demonstrating their resolve” to assure residents that this was not a political battle, he added. “Whether it is politically motivated or not, we can’t run away from the fact that there are real issues raised by the Attorney-General’s report."

National University of Singapore (NUS) Institute of Policy Studies sociologist Tan Ern Ser said independent accountants are expected to be professional and non-partisan, and therefore objective and unbiased, thus helping to snuff out rumblings that the episode is a political attack on the Workers’ Party.

Associate Professor Eugene Tan also said the MND’s hands are “tied” due to the Auditor-General’s report on the AHPETC’s accounts, detailing governance lapses at the town council. “The MND has to follow up on the remedial action ... because if they do nothing, (the MND) would be accused of failing in their duties,” he said.

He added that the move would ultimately serve to safeguard residents’ interests. “They would get the government grants they are entitled to, and if there were any wrongful payments made, then those would be made good,” he said.

Any measure taken to enhance governance, accountability and transparency is a good thing, said Dr Tan Ern Ser, while Dr Singh said this would remind other town councils to be more careful and transparent in their operations. This is something which the Workers' Party of Singapore had publicly supported during the Parliamentary Debate on AHPETC.

TRS Lies Again Over PAP Flyer Campaign at Aljunied

The Real Singapore (TRS) lies again with their misleading headlines over the PAP flyers at Aljunied GRC. To perpetuate their lies, TRS has drawn an analogy with the 2009 prosecution of Chee Siok Chin, Gandhi Ambalan and others who had walked from Hong Lim Park to Queenstown Remand Prison, while distributing flyers, to commemorate the anniversary of the World Bank IMF meetings protest. The charge was unlawful procession (without permit) under what is now the Public Order Act.

There is no basis to say that Victor Lye and others, who had gone separately, block to block, to distribute flyers, had conducted an unlawful procession. Moreover, many opposition parties regularly walk around, in markets, hawker centres and other public areas, in large groups, to sell their newsletters and distribute flyers and other materials.

There are even numerous online articles showing members of the opposition (in party uniforms) walking around and selling their newsletters and distributing flyers. Since TOC and TRS question whether Victor Lye's actions are illegal, does it mean that the actions of the Worker's Party (WP), the Singapore Democratic Party (SDP) and the National Solidarity Party (NSP) are also illegal? Or does TOC and TRS not consider these illegal since they are putting out pro-WP, pro-opposition material?

Stop the lies! #Sharethetruth #WPoutofcontrol

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"procession" means a march, parade or other procession (whether or not involving the use of vehicles or other conveyances) -

(a) comprising 2 or more persons gathered at a place of assembly to move from that place substantially as a body of persons in succession proceeding by a common route or routes; and

(b) the purpose (or one of the purposes) of which is - (i) to demonstrate support for or opposition to the views or actions of any person, group of persons or any government; (ii) to publicise a cause or campaign; or (iii) to mark or commemorate any event,

and includes any assembly held in conjunction with such procession, and a march by a person alone for any such purpose referred to in paragraph (b)(i), (ii) or (iii);

AHPETC WP Favors Their Friends - FMSS

Friends with Benefits: WP favors its own.

The WP town councillors say that they had to use FMSS, they had no choice because no one wanted to work with them. This is patently false (hyperlink to “Crying wolf) because there are many companies that work with both PAP and WP TCs.

Instead, the truth is that WP actively chose to favour its own supporters

1. The WP benefits its friends at the expense of residents

FMSS was clearly set up with the intention of taking over the management of the newly-formed AHTC. The personnel behind FMSS likewise knew that they would be doing so. Otherwise, why would anybody bother forming FMSS?

FMSS was only incorporated 4 days after the 2011 General Elections, and is largely-owned by AHPETC Secretary Mr Danny Loh (Secretary) and his wife Ms How Weng Fan, General Manager of the town council. These material facts were not recorded in town council meeting minutes.

Shortly after its set-up, FMSS was awarded AHTC’s 1st MA and EMSU Contracts for FY2011-12 by waiver of tender.  In other words, AHTC did not call any tenders, and neither did it make any effort to inquire if other companies would be keen to provide the services. 

AHTC had already decided beforehand that it wanted to award these contracts to FMSS.  This is made clearer by the Audit’s finding that, for the 1^st EMSU contract, the TC had in fact paid FMSS fees of some 36.7% higherthan those charged by two incumbent contractors. For the 2^nd MA and EMSU Contracts for FY2012-15, FMSS, as sole bidder, was awarded both tenders.  Specifically, FMSS’ MA rate for FY2012-13 was some 20% higherthan the former ATC’s MA rate and some 50% higher than Tampines TC’s (comparable in size to AHPETC) MA rate for the same FY. 

The increased MA rates led to higher S&CC for residents.

Clearly, the WP had decided from the start that it would award the contracts to FMSS. That is why they got their supporters and AHPETC officers to set up the company in the first place.

By favouring FMSS, the WP has also allowed FMSS to set higher rates than other MAs.  

2. The entire arrangement appears only to benefit FMSS, with no real benefit to the TC or residents.

The AHPETC had allowed its officers to set up FMSS to provide services to the TC, instead of hiring them directly, as was the case in Hougang.  Such an arrangement meant that, on top of paying these officers’ salaries (which formed part of the MA fees), the TC had to fork out an additional 3.5% project management fee to FMSS. 

It is also curious that FMSS, being a company with no track record and only one client, was given the contracts, since it offered no economies of scale and/or cost savings to AHPETC. 

3. WP politicized Town Councils

By using an MA set up by WP associates, AHPETC has effectively politicised town council management. This makes Mr Low’s complaint that town council management is politicised hypocritical - he himself had politicised AHPETC management in the first place.

Nobody is ‘out to get them’, nor are companies intentionally avoiding them.

The WP is crying wolf to say that no one wants its business. We would play into its hands should we continue this political baiting, pitting the WP against the PAP. This is primarily a municipal and not a political issue.

The TC has clearly not served the interests of its residents. The residents are the real victims of this saga. There are more than 150,000 residents in the town– and $3 million in S&CC fees coming in each month. The issue at hand must surely be to correct the mistakes and put in measures to safeguard the funds and interests of the town.