SINGAPORE: The Aljunied-Hougang Town Council (AHTC) said on Thursday (Feb 15) that it has resolved all its outstanding audit issues and ended its engagement with auditors KPMG, concluding a two-year long clean-up of its accounting system and internal controls.
The Workers' Party-run town council appointed KPMG as its accountants in 2016 after the Supreme Court ordered AHTC to nominate a Big Four accounting firm to fix lapses the Auditor-General's Office had flagged in a special audit.
The Workers' Party said in a Facebook post that AHTC submitted to the Housing and Development Board (HDB) the 23rd and final monthly report issued by KPMG on Thursday.
In the report, KPMG confirmed it is "reasonably satisfied that AHTC is compliant with section 35(c) of the Town Council Act" and that all audit points and control-related matters identified earlier have been resolved.
Issues flagged previously include incorrect computation of required transfers to the Sinking Fund and incomplete disclosure of transactions with related parties in the financial statements.
The town council also had to undertake various measures to remedy the lapses, such as to strengthen the capabilities of its finance department and to replace its accounting system.
AHTC said on Thursday that its new Town Council Financial System is now fully operational and that it has appointed an internal auditor to stress-test its controls and procedures on an on-going basis over the next two years.
HDB said on Friday it was "studying the details" of the report, highlighting that there had been two parts in the court ruling.
The first was to "assist in identifying its outstanding non-compliances with s35(c) of the Town Council Act and advise on the steps needed to remedy them". The second was to "establish whether any past payments made by the Town Council were improper and if they need to be recovered".
"The KPMG work pertains to the first part of the Court ruling," said HDB. "This is KPMG’s 23rd monthly report on AHTC’s remediation progress."
HDB noted that "KPMG has deemed some outstanding matters as being 'resolved', on the basis that recommendations have been given to AHTC or AHTC has informed KPMG of the intended follow-up actions".
"This includes getting an external auditor to verify the opening balances for AHTC’s financial statements and making transfers totalling S$13.9 million to make up for the shortfall in past transfers to AHTC’s Sinking Fund," said HDB.
"HDB urges AHTC to take follow-up actions to resolve all these issues fully and without further delay," it added.
The Housing Board said that with regard to the second part of the ruling, AHTC - through an independent panel (IP) appointed by the Town Council - has filed claims in the High Court against several AHTC Town Councillors, AHTC's former managing agent FM Solutions and Services (FMSS), as well as FMSS shareholders who were former AHTC officers.
"Among other claims, the IP is seeking compensation of AHTC’s share of the sum of S$33 million which it claims was wrongfully paid out to FMSS/FMSI, subject to the relevant defendants showing which payments were lawful.
"The Pasir Ris-Punggol Town Council (PRPTC) is also seeking compensation for the monies that are due to Punggol East," said HDB.
It added that it will continue to monitor the developments related to AHTC's and PRPTC's recovery actions against the defendants.