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AHTC submits qualified financial statements for 7th straight year: MND

AHTC submits qualified financial statements for 7th straight year: MND

Aljunied-Hougang Town Council. (File photo: Ngau Kai Yan)

SINGAPORE: Aljunied-Hougang Town Council (AHTC) was the only town council that submitted qualified financial statements for 2017 – the seventh straight year it had done so, the Ministry of National Development (MND) said on Friday (Dec 14).

A qualified financial statement indicates that the auditor may have received incomplete information, or that the entity being audited used accounting methods that did not follow generally accepted accounting principles.

AHTC's financial statements were qualified by its external auditor “due to an internal control weakness where the town council failed to record expenses incurred in a timely manner", MND said. 

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The ministry also released its town council management report for 2017, where four town councils – including AHTC – scored an "amber" rating for corporate governance.

The 16 town councils are assessed annually under five indicators using three colour bands – green, amber and red. 

A “green” rating means that there was full compliance with the checklist for the indicators; "amber” means there is one item of non-compliance or one observation from the auditor; "red" is the worst rating, with at least one item of non-compliance and one observation from the auditor, or two or more items in either category.

Summary of town councils' performance for FY2017. (Table: Ministry of National Development)

Workers' Party-run AHTC was rated "amber" in corporate governance for its failure to maintain updated accounts and records of expenses.

Bishan-Toa Payoh Town Council was rated "amber" because its accepted quotations were not circulated to the town council as required.

Tampines Town Council also scored an "amber" rating for an incorrect amount transferred from its operating fund to the sinking fund and lift replacement fund. The town council had identified the error and rectified it, but the correct amount was not transferred within one month after the end of the quarter, MND said.

The "amber" rating for Tanjong Pagar Town Council was due to it obtaining approval for the transfer of budget from other areas to its cleaning and utilities expenses only after the expenditure was incurred.


AHTC said in response that it has improved in corporate governance and arrears management for service & conservancy charges in recent years.

"This was achieved through the significant efforts of AHTC and its residents, despite the many challenges faced," it said in a press release on Friday evening.

It also claimed that MND's press release was "selective and incomplete" when describing AHTC's amber rating for corporate governance.

"What MND omits to say on this observation, but was included by AHTC’s external auditor, is that the expenses in question 'are found to have been taken up into expenses and the related payables during the financial year' and that 'there are no material misstatements found in the expenses and related payable transactions during the financial year'," it said.

"In contrast, when describing Tampines Town Council’s amber rating for corporate governance, MND chose an even-handed and balanced tone."

In its response on Friday, AHTC also said that while it is factually correct that this is the seventh year the town council has received qualified statements from its external auditor, MND's report gives the impression "that AHTC has stood still for seven years".

"From 13 observations flagged in 2012-13, AHTC has received just one observation this financial year," AHTC said.

"We believe MND’s specific reference to seven consecutive years is deliberately calculated to lower the esteem of AHTC in the public eye," the town council added.


Five town councils – Aljunied-Hougang, East Coast-Fengshan, Jalan Besar, Jurong-Clementi and Tampines – were rated "amber" in estate maintenance.

This means that they had between four and seven counts of "maintenance observations" per block on average, MND said.

All 16 town councils scored "green" in the other categories of estate cleanliness, lift performance, and arrears management for service and conservancy charges.

For estate cleanliness, the "green" banding indicates that all town councils had fewer than four counts of cleanliness observations per block on average. This includes the presence of litter, bulky refuse and graffiti. 

The "green" rating for lift performance was given as there were fewer than two breakdowns every month for every 10 lifts managed by the town councils. The failure rate of the lifts’ automatic rescue device, which brings the lift car to the nearest lift landing during a power failure, was also zero. 

All town councils were rated "green" in arrears management for service and conservancy charges as there were fewer than four in 100 households that owed arrears for three months or more. Less than 40 per cent of the monthly collectible charges was also overdue. 

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The ministry said it has reviewed the current set of indicators and methodology for its annual town council management report. 

"For FY2018, the areas measured under the estate cleanliness and estate maintenance indicators have been updated to sharpen the focus on issues of public health/hygiene, public safety and the living environment. 

"These include increasing the severity levels for observations such as overflowing refuse in bin chutes, and adding new items such as snapped/dangling tree branches," it said.

The remaining indicators are being reviewed progressively and details will be announced when ready, it added.

The FY2017 audited financial statements of all town councils have been presented to Parliament, and the statements will be made available on the town councils' websites.

Source: CNA/zl(cy)


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