Tomorrow’s pre-CNY fireworks

I wish I could be in Parliament tomorrow to watch the fireworks. So the National Development Minister will be moving a motion to discuss the governance of town councils, in the wake of a pretty damning audit of the Workers’ Party town council’s finances conducted by the Auditor-General’s Office.

I have been wondering why the AGO was taking so long to make its audit public since it got the job from the Finance Minister early last year. Now, I know why. Seems plenty of time, energy and manpower was needed to locate the mountain of documents, match figures and get answers from various parties involved in the management of Aljunied GRC, Hougang and Punggol East. And it seems that that still wasn’t enough…

The motion itself looks pretty innocuous, at least the first part, about upholding standards of governance and the like, and to express “concern’’ over the AGO’s report. The second limb, about getting MPs’ support for stiffer penalties for those in charge, seems to indicate that the G already has some kind of legislation in the works to tighten up the Town Council Act. Which again makes me ask: Whatever happened to the town council review that Senior Minister of State Lee Yi Shyan was supposed to lead?

In any case, the ST reported that the National Development Minister can only intervene in a failing town council “only when a certain threshold is crossed’’. It didn’t say what. But there is this in the Town Council Act on the occasions when the Minister can appoint someone to work in the town council:

(a) that a Town Council has failed to keep or maintain any part of the common property of any residential or commercial property in the housing estates of the Board within the Town in a state of good and serviceable repair or in a proper and clean condition; or

(b) that any duty of a Town Council must be carried out urgently in order to remove any imminent danger to the health or safety of residents of the housing estates of the Board within the Town.

Going by the annual audit reports of town council work, the estate that the WP runs doesn’t seemed to have reached such a state in which rubbish has been piled up storeys high in the chutes or the lifts are death traps…

BT reported that only three offences attract fines under the Town Councils Act: the wilful withholding of information from an auditor, the misuse of council funds and contraventions of the rules of the lift-upgrading programme. The first offence attracts a fine of up to S$1,000; the other two offences have maximum fines of S$5,000. Nothing is said though about being able to compel town councils to submit information. That’s why the WP Town Council was able to keep the data on service and conservancy fee arrears to itself for a couple of years….

The premise, I believe, is that the town councils are supposed to be directly accountable to their residents.

Looks like we have been nurturing a strange animal. Town councils were set up to decentralize management of estates and link the people’s vote to the ability of candidates to run their surrounding environs.

I can’t help but think that the Act was formulated on the basis that the People’s Action Party will always be in power, hence the limited controls over the town council MPs. Or maybe, the legislators then believed that voters would take a more active part in the work of TCs to exercise oversight – remember how there was so much talk about getting residents to sit on committees etc and have town hall meetings? Much like the way private estates are run?

I don’t think this is happening. As an activist grassroots experiment, my guess is that it never took off. Instead, we now see the MPs as people we hired on a four or five year contract which we can renew or terminate. The question now is whether four or five years in between elections is too long (or too short) a time to let town councils decay to the point when it has an impact on residents’ lives – and on their vote.

Evidently, the G and other experts think more oversight is needed. And it would probably be put in the hands of the National Development ministry.

BT reported NUS Business School associate professor Mak Yuen Teen as saying that clearer and stronger penalties for non-compliance is only half the equation; the independence of the enforcement body must be scrutinised too.

He said: “We currently have a convoluted governance arrangement (for) town councils. With MND supervising the town councils, it’s a bit like how people say the SGX (Singapore Exchange) has a conflict of interest in regulating listed companies … If we do strengthen the legislative framework (of the Town Councils Act), the independence of enforcement becomes very important.”

Associate Professor Lan Luh Luh at the National University of Singapore (NUS) Business School and Faculty of Law was also quoted: “I don’t think passing (a more stringent) Act is very difficult – the difficulty is in finding a legitimate, independent body to control the town councils. Which organ should oversee the town council because of its political nature? If it’s any ministry, it would be a bit odd because (these are helmed) by the ruling party. I think that’s the key thing that has to be resolved.”

Yup, the town council is a political animal. The G might swear that it is the G, and not the PAP, and that it has a duty to safeguard the interests of residents regardless of their political inclinations. But you can bet that more G intervention would lead to charges that it was intervening in places where it had no business to be.

In fact, one view could be this: Residents have to live with the consequences of their vote. One day, they will wake up and find their rubbish hasn’t been collected and lifts can’t work because they haven’t been thinking very much over the way their town council is managing their finances. Serve them right! This was a warning in the past remember?

The other view is that the country is too small a place to let things deteriorate to such a stage for even one GRC and two single-seat wards with thousands of households. Just think of the “cleaning up’’ that will have to be done by whoever takes power next. Better to over-protect the residents even if they don’t care.

One issue that deserves focus during tomorrow’s session is the business of double-hatting. A husband-and-wife team seem to have pretty much full rein over the finances because they are both managing agents and office-bearers. Some have pointed out that managing agents in PAP town councils are also office-holders in the councils. But it seems that these people are employees and not owners, as in the case of the WP TC. Nor do these employees have the kind of authority as the duo in terms of authorizing payments – to themselves.

The WP has said it is well aware of the double-hatting and it wasn’t as though something surreptitious was going on. But it does seem to me that some demarcation should be drawn so that all transactions are clearly above-board.

The AGO has not said anything about whether it uncovered dishonesty or criminal behavior (which might lead to CPIB or CAD investigations). In fact, it keeps telling the WP that it can’t tell based on its audit. But the way the WP TC works and its shoddy practices surely invites dishonesty or, at the very least, loss of funds through negligence.

I know nothing about auditing but there is something I really like to know which hasn’t been explained. How in heaven’s name did an operating surplus of $3.3million in 2010 become an operating deficit of $734,000 in two years?

Are these figures correct?