SINGAPORE — The Ministry of National Development (MND) has written to the Workers’ Party-led Aljunied Hougang Town Council (AHTC), asking why it did not compel vice-chairman Sylvia Lim and town councillor Low Thia Khiang to recuse themselves from financial matters.

The ministry also asked the town council whether it intends to implement other safeguards or interim measures in managing its finances.

“Upon receiving AHTC’s response, MND will further consider whether regulatory action needs to be taken in order to ensure the proper safeguarding of public monies entrusted to town councils,” the ministry said on Thursday (Dec 5) in its annual Town Council Management Report.

MND’s statement was the latest in the AHTC saga after the High Court in October found that both opposition MPs had acted dishonestly and in breach of their fiduciary duties towards the town council, and that their conduct had “lacked integrity and candour”.

The judgement prompted a parliamentary call, led by Deputy Prime Minister Heng Swee Keat last month, for both WP town councillors to recuse themselves from handling financial matters in the interim. WP will be appealing against the High Court judgement.

AHTC said on Nov 30 that the town council voted 17 to one against the recusal in a secret vote during a quarterly meeting recently.

This led MND, which regulates town councils under the Town Councils Act, to write to AHTC on Dec 4 to request more information about its reasons for not requiring the recusal.

“For good governance, AHTC should take interim measures to safeguard its procurement and payment processes immediately,” MND added.

“Until and unless the court findings in respect of Ms Lim’s and Mr Low’s conduct are reversed by the appellate court, they remain good and should be taken seriously by AHTC.”

AHTC said in a media release on Thursday that it will respond to MND's letter by Dec 13, which is the stipulated deadline.

IN THE GREEN FOR THE FIRST TIME

The latest Town Council Management Report by MND states that AHTC scored “green” in its rating for corporate governance for the 2018 financial year.

This is the first time it has received this score under the category since the 2011 General Election, which saw WP take over the Aljunied Group Representation Constituency from the ruling People’s Action Party (PAP).

But the rating came with an asterisk attached, with MND attributing this to the work of independent auditors KPMG, who were appointed by AHTC in 2015 to fix lapses found in the Auditor-General’s Office.

“(KPMG) assisted AHTC in its remediation of past control failures and audit points over a period of 24 months. HDB had provided funding for this work done by KPMG,” MND said.

The ministry said that it is still concerned over whether the measures put in place under KPMG’s guidance are enough to guard against a “recurrence of the past control failures if Ms Lim and Mr Low continue to be involved with AHTC’s financial affairs”.

This is especially since the adequacy of the measures depends entirely on how both MPs implement them, MND said.

In its media release, AHTC said that in addition to its engagement with KPMG which ended in February 2018, the town council initiated a self-funded internal audit engagement with Baker Tilly Consultancy to improve the rigour of its finance and management processes.

"It is thus encouraging to receive news of our improved rating in corporate governance, as it represents the good work carried out in particular by our management team, the finance department, then vice-chairman Png Eng Huat and current vice-chairman Sylvia Lim," AHTC added.

The corporate governance category saw two PAP town councils receiving an “amber” rating: Holland-Bukit Panjang and Jurong-Clementi. The former had improperly collected charges for the use of outdoor display areas, while the latter had not circulated quotations in the manner required under town council rules, despite having the proper approvals.

The audited financial statements of all town councils, including AHTC’s, received the all-clear from independent auditors, also for the first time in eight years.