The hole is getting bigger

Okay, does anyone remember that there was supposed to be a review of town council legislation? It’s supposed to be led by Senior Minister of State Lee Yi Shyan who is supposed to focus on three specific areas: The councils’ duties and responsibilities in relation to HDB; the adequacy of their sinking funds and long-term financial sustainability; and the arrangements when they change hands between MPs.

That was announced in May 2013, in the aftermath of the controversy caused by the employment of a PAP company, AIM, to handle some software systems for town councils. If you recall the case, the Workers’ Party blamed the termination of AIM’s services for some of the tardiness over its town council financial reports. There was plenty of rowing over it with the PAP town councils obtaining a clean bill of health at the end. Then, the PAP start its own shooting war, accusing the WP of employing cronies and not exercising due financial diligence. Inflammatory and near defamatory words were exchanged.

Well, Mr Lee seems to be taking his time with the report even though in February this year, there was yet another kerfuffle over the WP’s accounts for the Aljunied GRC-Hougang town council. This time, its independent auditor said he couldn’t form an opinion on its accounts because there were missing pieces of information, which the WP promptly said was due to “handover’’ issues, among other things. The Auditor-General’s Office was directed to look into the accounts. He was to examine whether the town council has taken “all reasonable steps” to safeguard the collection and custody of its money, that money went to the right people and that no laws were broken.

Well, the Auditor-General doesn’t seem to have finished his report either. In fact, he’s the reason cited by the WP for its tardiness : It was too busy preparing for his audit to think about its financial statements and can only respond fully to queries about its bad report card after the audit was over.

 Maybe WP has a point. As reported by ST, according to the National Development ministry, the town council’s poor performance in corporate governance was because it has not shown that it has rectified “various legal and regulatory contraventions” reported by its independent auditors for the 2011 and 2012 financial years. Also, it has not submitted its FY13 financial statements and its self-declared corporate governance checklist. (I guess it’s waiting for directions from the AGO?)

But how does it account for its rather poor collection of service and conservancy fees which is at 29.4 per cent as end April 2013? The norm is about 3 per cent. “From May 2013, the TC stopped submitting its monthly S&CC arrears report altogether, despite repeated reminders,” said the MND.

Minister of State for MND Desmond Lee has weighed in to shed more light after WP chief Low Thia Kiang maintained that he had no cash flow problems and that poor financial management had no impact on the running of an estate (makes you wonder why anyone needs to pay S&C fees then).

Mr Lee said that Mr Low, who was in charge of Hougang town council before it merged with Aljunied GRC in the last election, also had hefty arears of about 7.8 per cent. The town council’s independent auditor had a net operating deficit of about $92,000 and an accumulated deficit of about $9,000. All of which was swept away when the two wards merged after the 2011 general election. The PAP-run Aljunied town council had an operating surplus of $3.3 million. But the merged entity had a deficit of $734,000 in the 2012 financial year.

What of 2013? Don’t know because it hasn’t submitted its latest financial statement. The bet is that the hole is bigger.

Now, the G seems to have a lot more information than anyone else (except the WP which is keeping silent). But I wonder how it has come to pass that a town council can NOT issue reports on its S&C fees to the G for more than a year without attracting sanctions. Is this part of regulations? Or a guideline that can be broken? As for its financial statements, WP chairman Sylvia Lim said she has already told MND about their status implying, I suppose, that the G shouldn’t be surprised that it didn’t get them.

Is there no “trigger’’ point for the G to act? Or was it not provided for in the town council legislation? Perhaps, the G is sticking to its position articulated by MND Minister Khaw Boon Wan, that town councils are necessarily political in nature. It’s for the MPs to manage the town councils and you, the voters who voted for them, good luck to you! Thing is, why is the review and the AGO audit taking so long? Does the G want to wait till the WP town council is bankrupt to show the voters the outcome of their vote? Are things only going to happen closer to the next GE? And what happens if the town council cannot pay its debts? Is the G going to do a bail-out and show its generous side?

I wonder what the residents in Aljunied and Hougang are saying? They don’t care so long as their rubbish is collected? They don’t believe the statistics and agree with Mr Low that all is hunky-dory? To have three in 10 households in arrears is okay? The other seven households have no problems subsidising the rest and really like the “compassionate’’ attitude the WP is showing?

Oh! Where is the Citizens’ Consultative Committee in all this? Shouldn’t it be at the forefront asking questions of WP since it’s a grassroots body with the welfare of residents at heart? The members can’t merely be signing off on licences for trade fairs right?

I see a cat-and-mouse game going on. The G wants WP to admit to some kind of financial mis-management. WP wants to see how far it can push blame to the G. So both sides aren’t saying anything much. It’s the Aljunied and Hougang residents who will ultimately suffer from the politics that is being played out at the grassroots. And maybe the rest of us taxpayers as well if the G is merely waiting for the hole to get bigger for the WP to fall in.