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Posts Tagged ‘Workers Party’

The G spot – on town councils

In News Reports, Politics on March 3, 2015 at 1:37 am

So we were treated to a spectacle in Parliament recently with the Workers’ Party having to defend its management of the Aljunied-Hougang-Punggol East town council in the wake of the Auditor-General’s findings. The WP is being cajoled into pursuing its own investigation into the supposed shenanigans of its managing agent. The G has warned darkly about criminal charges.

A repeat performance can be expected when the MND’s budget comes up for debate with more details on a review of the Town Council Act. Perhaps, all will be unveiled to tighten the practices of town councils to subject them to more regulatory oversight. Among the expected rules : town councils won’t be able to decline submitting reports to MND, such as on its service and conservancy charges arrears. But whether WP committed a big or small foul, criminal or civil, some people want to know if the infrastructure in place for a changeover of town council operations is robust enough.

What a poster said: Can we confirm that citizen’s monies are not wasted in having to come up with a completely different accounting system that has to be set up from scratch when GRCs change hands, and the old system abandoned? Can we assure that no such wastage occurs in future, including man hours spent in parliament debating such wu-liao things that should not have happened in the first place if system was not changed?

There’s some sympathy for the WP which singled out the difficulty in getting a new software/computer system set up to reconcile S&C accounts after it pulled Aljunied and Punggol East under its fold. The withdrawal of the PAP’s AIM company left a gap. Software glitches, manual counting led to mistakes in its arrears reports, so WP said.

Netizens have a point about the transfer process. What sort of time frame is adequate for handover processes that involve thousands of dollars? What if the current managing agent pulls out or terminates its contracts? Was the Town Council Act conceived without safeguards for a handover in the expectation that town councils will not change hands? What is the role of the G (as opposed to a PAP-controlled G) in ensuring that voters’ choice is respected and their interests – despite their political inclinations – safeguarded?

Another poster said: Should all Town Councils be de-politicised and centrally administered so that there will be minimal or no handover/ mis-management issues? The welfare of residents must always come before politics.

Some have called for a return to the HDB days when it managed estates. But it seems too late to roll back time. Imagine the politicians having the ground cut out from under their feet literally. Town council management was supposed to display their ability to run the small stuff. If you can’t manage an estate, can you manage the country? Such management was supposed to keep them close to the ground, instead of merely seeing their duty as talking shop in Parliament. But is there a level playing field or are there obstacles, wittingly or unwittingly, put in the way when a new group takes over?

It is my fervent wish that should there be a review of the Act, it would be submitted to a parliamentary select committee to gather more views.

The roles and responsibilities of MPs in town councils brings forth another point on their relationship with the grassroots groups.

The same poster asked: On a related matter – there are many posters, placards etc in my estate from the Town Council / Residents Committee featuring the picture of our elected representatives – who pays for these materials? And if it is the “town council” is it an appropriate use of S&C funds. If it is the PA, is it an appropriate use of non-partisan funding?

It is an old issue raised even in pre-Town Council days. The alphabet soup of grassroots groups run by the People’s Action Party in constituencies are G institutions. The G is the PAP. Hence, the PAP is in charge of grassroots groups. That’s how the logic goes for the opposition politicians and their fans.

Personally, I don’t think the groups painstakingly built up by the G should be handed over simply. The deal was the town council changes, not the constituency groups. My problem is whether the authority of the grassroots groups are on a par or even over-rides that of the elected MPs. It is something the WP tried to raise in court in the saga over whether its trade fair was held legally. It had, among other things, chafed about having to gain the support of the Citizens’ Consultative Committee, the key grassroot group in the constituency.

So here is my own question:  Please explain the role, responsibilities and powers of the appointed members of the Citizens’ Consultative Committees and how they compare to those of the elected members of the constituency they serve in.

Relating to the related third parties

In Money, News Reports, Politics on February 14, 2015 at 2:59 am

I wonder what sort of Valentine’s Day Mr Danny Loh and Ms How Weng Fan are having today? It can’t be comfortable for the husband-and-wife team to hear themselves being mentioned so many times in the august chamber of Parliament. What’s worse are all the innuendoes and sometimes blatant charges levelled against them by the People’s Action Party ministers and MPs.

Like,

  1. How they took advantage of their membership in the Workers’ Party and their friendship with its chief to set up a money-spinning commercial vehicle in the form of FM Solution and Services.
  2. How they over-charged the town council for managing fees, by about $1.6million a year.
  3. How, despite their double-hatting, it was not clearly stated in documents for all town councilors to know.
  4. How they were invoicing, approving and signing cheques from the town council to themselves.

The WP, to give its due, tried to defend its agent.

Like,

  1. How the couple stepped in when nobody else wanted the job.
  2. How they went from employees in Hougang town council to setting up a company because the entity made it easier to manage a town council which now had to deal with Aljunied and Punggol East as well.
  3. How the fees were settled via open tender.
  4. How they had no say in other tenders and that it was the WP MPs who co-signed cheques anyway.

Needless to say, the WP’s position cut no ice with the PAP side, who used words such as integrity, honesty, pattern of denial and deflection and even (gulp!) unlawful to describe the WP’s relationship with their managing agent. The WP said it wasn’t as though no one knew of the managing agent’s antecedents. Everything was out in the open (just not in the books…) But the PAP’s reply is that this is not the way things should be done, not by Financial Reporting Standards required by law anyway.

The G ministers keep asking the WP if it would sue the managing agent. The couple, as well as fellow shareholder Yeo Soon Fei must be wondering what their political masters will do now.

If the WP sues, then it would be like caving in to the PAP and turning around to slap a friend who had helped in time of need, as Mr Low Thia Kiang had described them. If it does sue, who knows what else would be unearthed that would do the party more harm than good? The trio might well hit back to protect themselves.

What about that “forensic’’ audit that the PAP side keeps calling for? The Auditor-General Office didn’t do a full audit, but a partial one over a limited period, which was why it could only say that it didn’t have enough information to ascertain if there was any wrong-doing.

One definition forensic audit: An examination and evaluation of a firm’s or individual’s financial information for use as evidence in court. A forensic audit can be conducted in order to prosecute a party for fraud, embezzlement or other financial claims. In addition, an audit may be conducted to determine negligence or even to determine how much spousal or child support an individual will have to pay.

So the PAP is calling on the WP to get someone to comb through its finances and, presumably, make good its boast that no money is missing. It is not unlike the case of the National Kidney Foundation, when auditors KPMG produced a report for the new NKF board which led to the civil suit with the old board and T T Durai. National Development Minister Khaw Boon Wan, who was Health minister at that time, referred to this yesterday, adding: “I’m not sure if this may happen in the case of the town council.’’

Precisely. Why would the WP investigate itself? Or are we talking about the “new’’ town council after the next general election?

Hmmm… what new regulations the G will come up with now that Parliament has unanimously approved a motion for stricter oversight over town councils? Besides having the authority to compel town councils to submit reports, I wonder if it will include giving the G the authority to order a forensic audit (if it already does not have the power).

I hope the media aren’t waiting for the Committee of Supply debate next month to give us the next instalment of the saga. In fact, the people behind FMSS should have been chased down way long ago. What are they up to now? They are no longer managing the town council right?

What saddens me is that this is really a grassroots saga and there seems to be little movement on the grounds of Hougang, Aljunied and Punggol East. One resident asked WP’s Yee Jenn Jong about the report a couple of nights ago “but he didn’t answer and walked away quickly’’, according to Education Minister Heng Swee Keat. (Wow. PAP’s got ears peeled in opposition territory.)

Nobody else deluging the town council with email? Crowding Meet-the-People sessions for an answer? Calling for a meeting with their MPs, just like the Sengkang residents did when they heard that a columbarium was coming up?

Is that why WP MPs could tell the PAP side in Parliament that they were only answerable to residents – because residents couldn’t be bothered? I would be surprised if residents think that all is okay in their town council. At the very least, they should get a full accounting of how the town council intends to pull up its socks. Residents don’t need to be PAP or WP supporters to ask questions of their elected representatives. They would simply be exercising their rights as citizens.

Fire crackers and poppers in Parliament

In News Reports, Politics on February 12, 2015 at 3:40 pm

When I was growing up in a kampong, every household would have a long bamboo pole or galah with a string of gigantic fire crackers which we would let off at midnight on CNY. They would go BANG! BANG! BANG!!!!! BANG!!!!!!!!!

That was the sound that Law Minister K Shanmugam made in Parliament earlier today. Workers Party Low Thia Kiang, on his part, did what the little girl who was me did. He lit a cracker, threw it on the floor and it went POP!

Yep, there were fireworks today in Parliament. Plenty of noise and smoke. But was there light?

I think the G ministers who spoke managed to cut through the Auditor-General’s report on the finances on the Workers’ Party town council to get to some key points. Of course, as politicians, they used some pretty choice words in layman’s language rather than the bean counting bureaucratese of an auditor.

So the WP was incompetent – yes, that can’t be denied. The town council was in a shambles as Mr Shanmugam described it. Even the WP did not deny that it wasn’t up to scratch managing one of Singapore’s biggest town councils. Of course, it was left to the PAP to point out that it had made big promises during the general election, of being able to run an operation as well as any team of People’s Action Party MPs. Those promises have now turned out empty.

The Big Question: Would those who had voted the party believing in its competence ask themselves if they had been deceived? Or would they be willing to give the party a second shot?

Then again, Mr Low’s reasons (or excuses) for the incompetence were beguiling. Nobody, at least no professional body of estate managers, wanted to work for the opposition, he lamented. He cited the times the WP put out tenders but got no bidders. It is an argument which would be met with some nods. Why would a business want to associate itself with an opposition party with one town council when the other side had more business to give? At the back of the minds would be this fear that the all-powerful PAP G would seek some kind of retribution…

You would have expected Mr Low to reject the motion which calls for stiffer penalties in a tighter framework. But he didn’t. He said that the framework review should protect residents’ interests even when town management changes hands from one party to another. Implicit in Mr Low’s statement is that there is deliberate hobbling by the State or previous town council and obstacles put in the way of a smooth handover. “If an opposition aspires to be the next government, perhaps, it may need to build an army of civil servants first. This is a strange political situation for any democracy,” he added.

Mr Shanmugam described the argument as playing the “victim card’’.

The thing is, Singaporeans, by and large, quite like victims. They are small, powerless and easily bullied. Turning victims into villains would take some doing. It would take, errm, falling resale prices, uncleaned corridors and extremely high service and conservancy charges.

The Big Question: Would people want to wait for that to happen or is there enough evidence to show that the WP is capable of digging itself out of the hole it is in? Or would they agree that the WP was unnecessarily hobbled by a thicket of rules and bureaucratic inertia?

Plenty of big figures were bandied around today, of overpayment and cosy relationships between WP partisans who worked in the town council. Mr Shanmugam went to great lengths to show that money “lost’’ isn’t money lost in the normal sense of the word. Here are two ways he cited:

FIRST, the lost money could be found, in the pockets of the managing agent who approved, verified, certified payments – to itself. There were 84 cheques in just the period of audit for FY2012/13, amounting to $6.6million. Yes, there was a counter-signing party, who is Ms Sylvia Lim, chairman of the council. She was aware of the double-hats the managing agent was wearing but did she do more to ensure no conflict of interest? There was no transparency, no clear processes in place, Mr Shanmugam fired. The point, of course, is whether the managing agent was making more money than it should…

Ms Lim acknowledged one case of overcharging for lift service and maintenance and claimed it was not intentional as             the agent had used  the wrong unit multiplier” to compute prices. “There was absolutely no intention on the part of the committee nor the contractor to approve higher payment rates,” she said, adding that some of the money had been clawed back.

Said Ms Lim: “The town council has no issue with disclosing the value of related party transactions. Moving forward, we have suggested that the Ministry make it clear which parties are considered related in the town council context.”

In other words, you never said what was needed to be disclosed. So how would anyone know? Hmm. I wonder how what she said squares with fiduciary duties and compliance with Financial Reporting Standards…

SECOND, the money was lost through “inflation’’ of the managing agent’s fees. The total fees paid by the town council to the managing was nearly $22 million over four years, way more than what other managing agents charged. Tampines town council, for example, paid its agent $16.85 million, for over five (not four) years.

This meant that every residential and commercial unit under the WP’s charge was paying way more than what those in other town councils were. Like, how a shop in Aljunied would be paying $14.92  compared with between $4.80 and $6.65 elsewhere. In July last year, even as noises were made about its finances, this sum was raised to $15.82.

Mr Shanmugam had an interesting way of putting it: “Maybe there was no one taking money, through the backdoor in the dark of the night. Because the money was going out in broad day light, through the front door.’’

I can’t help but think that if a PAP MP had been on the receiving end of the firing squad, there would be plenty of calls for heads to roll. In fact, National Development Minister Khaw Boon Wan talked of how CEOs in Japanese companies would have committed hara kiri. (Methinks he’s put a step wrong.  Surely, he realized that this is not something that should have been said by the Bigger player? )

The pity is that attention would be diverted to his choice of words rather than the painstaking attempt made by Mr Shanmugam to show that there was some deliberate mischief (or pattern of non-disclosure) going on. Like, why should the managing agent set up FM Solutions & Services when they could have been employees of the town council? Why wasn’t it made clear to all town councilors and in documents that the managing agents who doubled as key officers of the town council actually owned the company? Why doesn’t the town council ask the agents to produce bank accounts so that it’s clear what sort of money they had made from the TC? (I wonder if there is any law which can compel the managing agent to disclose its bank accounts. ..)

The Big Question: Mr Shanmugam dropped plenty of ominous words such “unacceptable’’ and “unlawful’’ which seemed to presage some kind of legal action although I’m not sure undertaken by whom? He also kept on about how the town council seemed reluctant to answer questions on the managing agent’s work and finances, and how the AGO was only auditing a segment of the TC’s work and not a “forensic audit’’ of everything. What is this all leading up to?

Obviously, the G and the PAP wants the WP to eat humble pie and prove it is not beyond taking action even against its own partisans. Mr Khaw even asked if it would sue the managing agent for return of money lost. (This was in reference to how the agent was being paid 20 per cent more than the previous managing agent that ran Aljunied)

He added this: “MND is studying what other legal recourse the aggrieved parties may have.” Intriguing. Who are the aggrieved parties? The residents? The G will sue on its behalf? Or will some resident take up the cause?

Then comes the threat: Until the town council “cleans up its mess”, the Government will also withhold from it an annual service and conservancy charges grant of several million that MND gives to every town council. ST reports that for the WP, it amounts to about $7 million each year.

You know what? I keep wondering what the various grassroots bodies in Aljunied, Hougang and Punggol East are up to. Where are the citizens’ consultative committtees? The residents’ committees? The hawker associations? They purport to represent the residents. Why hide behind the G? They can’t be happy about the grants being withheld. Why not come out to attack or defend your elected representatives?

Anyway, the fireworks continue tomorrow. Maybe instead of fire crackers, some dynamite will be exploded…

Tomorrow’s pre-CNY fireworks

In Money, News Reports, Politics on February 11, 2015 at 2:42 am

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?

WP town council’s shambolic finances

In Money, Politics on February 9, 2015 at 10:52 am

Okay, the Auditor-General’s Office report on the Workers’ Party town council is better examined by bean-counters and those who can make sense of the various financial regulations required by law and the Town Council Act. My eyes glazed over the figures. To recap, the AGO was ordered by the Finance Minister to go over the TC’s accounts after the TC’s own auditors said it couldn’t an express an opinion on them because it didn’t have enough info to do so.

Actually, all I wanted to know if there was money missing or anything underhand in the town council which comprises two single-seat wards and a GRC. The Aljunied/Hougang/Punggol East town council is gigantic. Maybe a small outfit can run a small place like Hougang, but can it do the same for a bigger entity with big money?

We’re not getting any definite answers on what sort of money is really in the TC bank accounts or whether anything has been lost because the short answer is that even the AGO can’t tell based on the information it has.

“Unless the weaknesses are addressed, there can be no assurance that AHPETC’s financial statements are accurate and reliable and that public funds are properly spent, accounted for and managed.’’

So it’s shoddy financial and management practices, lack of transparency, no followups, wrong figures entered, tardiness, confused accounting, no oversight, little or lost or no documentation…you name it, the WP committed it, going what the AGO said.

Its main report is a catalogue of sins:

a. failure to transfer monies into the sinking fund bank accounts as required by the Town Councils Financial Rules;

This is a very complicated thing about what sort of money goes where and what can be taken out from where for what purpose. Seems that when the WP got Aljunied and Punggol East in 2011, everything went topsy turvy so all the numbers were mixed up and you don’t even know where some money came from or went to.

b. inadequate oversight of related party transactions involving ownership interests of key officers, hence risking the integrity of such payments;

This is about how the members of the company managing the estate also sit as town council officers and therefore are more or less paying out from the town council to themselves. It’s a conflict of interest which the G has raised time and again, especially over large project management fees. The WP didn’t have a system in place to make sure no hanky panky took place.

c. not having a system to monitor arrears of conservancy and service charges accurately and hence there is no assurance that arrears are properly managed;

This is a big issue because the arrears chalked up were so large it was frightening. The AGO doesn’t say if its recent account that the arrears are about 5 per cent is correct. But it does take issue with WP’s reasons about IT failure, the G format of giving arrears reports.

d. poor internal controls, hence risking the loss of valuables, unnecessary expenditure as well as wrong payments for goods and services; and

This is a crazy patchwork of how the TC could have over-billed, under-billed or over-recovered or under-recovered money. Parties don’t just involve tenants and vendors but also the HDB, NEA, and the previous PAP-run town councils and the Citizens’ Consultative Committee. Also over who signs payment vouchers, cheques and access to the safe.

e. no proper system to ensure that documents were safeguarded and proper accounts and records were kept as required by the Town Councils Act.

Some documents got, some don’t have. Some supposed to have but don’t know where. (I don’t even know where to begin)

As I said, I don’t even know where to begin. The kindest thing I can say about the Workers’ Party is that it was overwhelmed by having to run a far bigger place than just Hougang. The WP put up a defence for some of its tardiness and keeps insisting that the AGO found no money missing nor “any criminal or dishonest activity’’. To which the AGO rather tersely countered that the town council’s “broad conclusion cannot be derived” from its audit.

The WP also said, quite cheekily, that it was thanks to the AGO and the Audit Act that it got more information from G agencies, which also benefitted other town councils. But the AGO said most of the information came from what documents the TC had and it could have got the info too if it had bothered to find out.

Some of the WP’s defence is pretty familiar. It goes somewhat like this:

WP: When we got Aljunied and Punggol East, we had so much to do to align everything. Remember there were boundary changes as well? We’re inexperienced. In any case, we wanted the previous managing agents to stay but they wouldn’t even extend their contract by six months. Then some of our staff involved in the handover resigned.

AGO: Aiyoh, you were given six months lead-time and you still couldn’t settle everything? You didn’t make sure you looked at what documents were handed over and kept them safe?

WP: Plus there were all these complications about what we owe or can claim from HDB, NEA and the CCC. These fellas seemed to be deliberately stalling or rejecting our stuff. As for service and conservancy charges, we relied on an IT system to account for service and conservancy charges but it had a bug in it. We needed some historical data from the old vendor but could only get some bits – not everything. What made it worse was that the silly G wanted a complicated format so we had to do some manual work. That’s how the mistakes came about. Anyway, it’s been cleared up now.

AGO: Oi. You could have followed up with these people.

WP: As for the managing agent, we already know they wear two hats – so it’s not as though we were clueless. The G should lay out some clear specs on this thing called Related Third Party transactions.

AGO: Errr, it’s in the Singapore Financial Reporting standards.

WP: But we’ve noted what the AGO said. In fact, we had already started making some changes and then had to stop when the AGO stepped in. We’re such a small outfit but we still went on looking after the TC even as we were helping the AGO.

So there you have it. A quick and dirty account of the town council’s tangle. I’m sorry if I sound too casual. You can be sure that the words used were far more elegant than this. But I think I’ve got the gist of it – please correct me if I am wrong.

What to make of the report then? So the AGO went in, and found that the WP’s auditor was right that it can’t pass an opinion on the results.

What happens now? The Finance Minister has the report and he surely has to do something with it right? What? Punish it with some penalty that will also rebound on the residents? Send in reinforcements to …hmmm…help a political party he doesn’t belong to?  I suppose the G and the PAP MPs are now sharpening their knives. But you know the phrase….people in glass houses…They should hope/know that their own TC finances are in good shape before throwing stones.

For me, this whole exercise has been an education in town council financing. I wonder what it will mean to the residents in Aljunied, Hougang and Punggol East….

We’ll probably know soon. At least by January 2017.

The hole is getting bigger

In News Reports, Politics on November 12, 2014 at 10:05 am

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.

Notes on the news

In Money, News Reports, Politics on November 5, 2014 at 3:55 am

Weighing the WP’s worth

In Parliament, we have the Workers’ Party worrying about the independence of the judiciary, which it argues might be compromised if the Constitution is amended to have retired judges back to serve short stints. The WP wanted secure tenure for judges who should have a higher retirement age than 65.

In Aljunied-Hougang housing estate, the WP town council is chalking up arrears in service and conservancy charges. Seems three households in 10 haven’t paid their S&C fees for at least three months by end-April last year. It stopped submitting monthly reports from the next month on despite reminders. I wonder what has happened since then? Have they collected everything that’s owed or are households owing even more and how much is that in dollar terms? You wonder how the WP manages to fund the needs of the estate like this. Or (gasp!) have the rest of the HDB households outside the WP areas actually been paying too much in S&C fees??

Anyway, I thought today’s news reports on WP highlight the role of MPs very well – as a check on the G and as estate administrators. Put to the vote, the amendment got through of course. The WP made an interesting point about judges but I wish it had done more homework by suggesting where to get/find more judges. If more were available, there would be no need for Judicial Commissioners, a sort of temporary judge, introduced in 1979. Lawyers in private sector prefer short term stints at the Bench, but not many want to do it for a lifetime.

I wonder what is more important to the Aljunied/Hougang voter : the need for a contrarian voice in Parliament or a well-run housing estate.

A case of interest

So a review committee wants a 4 per cent cap on what licensed money lenders can charge in interest. And the licensed money lenders are very unhappy. They charge at least 20 per cent. Now, either their current rates are too exorbitant or the new cap is way too low. You wonder then about the people on the review committee. Some moneylenders sit on it too and they would surely have raised whatever objections then. Actually, while a low interest payment makes it easy for debtors, doesn’t it also encourage more people to take out more loans? Or is the position to make it attractive for debtors to go to licensed moneylenders than the loan shark, never mind if the licensed money lender can’t make as much money as before and might exit the business altogether?

Cabby, cabby, quite contrary, how does your wallet fare?

Plenty of cabby stories today, including an ST report that a simpler fare structure is going to be announced soon. Excellent! The report said that there are now close to 10 different flag-down fares, from $3.20 to $5, three different metered fare structures and more than 10 different types of surcharges. Seems ST got word that the new flag down rate that will apply to all taxis is going to be $3.80 and distance- and time-based interval jumps of 30 cents, rather than the 22,30 and 33 cents today. I’m sure passengers will welcome this, although what the taxi companies will say about such interference in the business operations is another matter. They must be doing okay, since there’s also news that Trans-Cab is going to be listed on the stock exchange.

And they must be pleased too that the Land Transport Authority is looking to regulate the likes of Easy Taxi and GrabTaxi, apps which are taking away their call bookings. The G is thinking of regulation that will protect the passenger, like methods of redress should disputes arise. Cabbies like the apps because their takings go up, although transport experts warn that the apps have not yet been monetised and money is likely to be clawed back from the drivers. Another worry is that over-regulation will kill innovation.

No need to be so jolly

So Christmas came early for manufacturers, crowed the ST on Page 1 today. Well and good! Then comes several paragraphs on how October Purchasing Managers’ Index is up, and at the highest level since April 2011. There was an “uptick’’ in orders from the US. You have to get through eight paragraphs before a note of caution is sounded that it might just be a seasonal thing with Christmas round the corner. I seriously wish ST would stop taking a rah-rah tone and provide a fuller picture quickly for those with short attention spans. Whatever happened to what is known as the double-barrelled intro?

BT has this:  SINGAPORE’S factories were busier than expected in October, with the latest purchasing managers’ index (PMI) rising 1.4 points to 51.9 – a level not seen since April 2011. But economists are downplaying the uptick, chalking up the expansion to year-end seasonal effects, and warning that a patchy global recovery will continue to weigh on manufacturing performance.

Let it grow, let it grow, let it grow

I did a double take when I read that the three-month delay in the completion of the National Stadium meant that the grass did not have time to grow. Seems that the grass had an extra three months to grow! Or do you build the concrete stuff first and then lay the grass? Does it then mean we should have delayed the OPENING of the stadium then? If the Sports Hub people “misjudged’’ the impact of that the events calendar will have on the pitch, then you wonder if what sort of “green’’ expert it has on board. Or whether the targets that it has to fulfill (or does it set them itself?) in terms of events and revenue led to the packed calendar.

The WP-NEA affair over a fair

In News Reports on October 17, 2014 at 2:50 am

Remember all that fuss about a Chinese New Year fair in Hougang? How the temporary stallholders got hauled up for illegal hawking? And they thought the t Workers’ Party town council had got all the permits ecetera? Well, they compounded their fines but the town council refused to. See you in court, WP told the National Environment Agency.

I had wondered why the WP didn’t just compound the offence and get on with the business of running the town council. From reading the reports over the past couple of days, I can only surmise that it wanted to make a point about the jurisdiction of a town council and the role of the Citizens Consultative Committee (read: pro-PAP grassroots group).

Not that WP has a hope in getting their points across when the issue is so cut-and-dried: You needed a permit, you didn’t get it, you broke the law.

It wasn’t for want of trying though. The WP counsel wanted to look at whether the requirements for a permit for a temporary set-up were even valid or necessary, especially since the set-up is in an area under the town council’s charge. Why then, for example, the need to also get a supporting letter from the CCC which, by the way, approves the setting up of pasar malams etc.

Seems the line of questioning was deemed irrelevant.

Of course, we need to abide by the law. We need to make sure temporary set-ups are safe, hygienic, don’t add to noise, don’t bother residents and don’t pose a problem to traffic. We expect officialdom to do the needful. WP’s chairman Sylvia Lim argued that this wasn’t about “cooked food’’ nor was it a trade fair. It was a community  a mini-fair, with just half a dozen stalls selling CNY paraphernalia – and therefore did not require a permit.  Except that the WP didn’t make this plain to the NEA. It’s not clear from the reports whether even if it did, it still needed to get a permit for the stalls – with the CCC approval. The fact is that the WP TC had started the process of application but stopped corresponding with the NEA half-way. (Guess it got fed up with the red tape? Or saw a chance to get its grievance out in the open?) It went ahead with the fair even though NEA had threatened enforcement.

Sigh. As I did then, I feel sorry for the stallholders caught in the middle. It’s always the small people who get trampled on.

Anyway, the case is over and verdict to be delivered on Nov 25.

Just three things…

In News Reports on February 20, 2014 at 3:24 am

Plenty of interesting stuff today. I’ll just do it from a numbers point of view on just three bits

$300,000

That’s the maximum fine Singapore wants to levy on firms who burn forests in Indonesia and the wind blew the smoke over… That’s quite radical given that we’ve had so much talk about how difficult it is to put a legal onus on people to do right outside national boundaries. Lots of problems of enforcement, for example. Rather than discuss if the penalty is too low, which appears to be what people are saying, shouldn’t we be talking about whether it can even be enforced?

The trouble with those plantation firms is that they all deny burning anything and have a zero-tolerance burning policy. It’s those down the line, so they say, sub-contractors and individual farmers and such. And the Indons aren’t quite sharing enough info on who is burning where. How to even know who to take to court in such circumstances?

Also interesting is how the errant “burners’’ will be nabbed. Those managing the companies have got to step into Singapore. If I were a plantation owner, I’d just stay away. Or maybe we’ll just go after the Singaporeans sitting on the boards of these companies first.  

Anyway, it’s up for public consultation. Wonder what the big plantation firms will say…

40 minutes

Those who were at the COI hearing yesterday (and there were not many beyond journalists) were treated to a video clip on what happened in Little India on the night of the riot. Seems like the bus driver had too much on his plate that night to even catch sight of the Indian worker who tried to keep pace with the bus and died under it. Plenty of specifics were given out, such as the speed at which the bus was crawling and how long the man chased after it before he seemed to have lost his footing. The driver isn’t being charged with anything and it would appear that the video is testimony of how he couldn’t have done anything to prevent the sorry accident from happening. ST reported earlier that he was relieved, for which it was whacked by the COI chairman for contempt of court.

The COI is really laying down the law here, castigating those for trying to “influence’’ the proceedings by interviewing witnesses, for example. The chairman, an ex-judge, also made it clear that the panel wasn’t comprised by idiots to be led by the nose simply because someone from the Attorney-General’s Chambers is leading evidence, something which civil society activist Vincent Wijeysingha had criticised in a letter in TODAY.

$1.12 million

The Workers Party town council said it was owed this much by the previous town council. That was given by the HDB and Citizens’ Consultative Committee for Community Improvement Projects. The MND said there was nothing owed according to its own records. And contrary to WP’s earlier statement that it didn’t get any info from the parties, MND said it furnish the info twice.

That’s just one thing that cropped up in the G’s decision to ask the Auditor-General to go over the town council’s books, which its independent auditors had disclaimed an opinion on. Note that a “disclaimer” is not as bad as an “adverse’’ report, but it was good enough for the G to intervene because of the involvement of public money. Some $22 million can’t be matched but the WP is on record as saying that nothing improper or illegal happened, like the money going into the wrong hands or gone missing. WP’s Low Thia Kiang did say, however, that there might be “technical issues’’ in terms of complying with auditing requirements.

Looks like the G is pretty focused on nailing one big point: the role of party supporters as the TC managing agents and how much of a cut they get from handling TC projects.

I guess some will look at it as G persecution of the opposition ahead of the next election. But what do the Aljunied-Hougang residents think? Are they even following this? Because at the end of the day, whatever the outcome of the audit, it’s their opinion that counts unless criminal wrong-doing is exposed. Or are there other “penalties’’ that the Auditor-General can impose?

   

Opining on the disclaimer of opinion

In News Reports on February 15, 2014 at 4:24 am

I think a lot of people learnt a new phrase this week: disclaimer of opinion. It refers to how there’s not enough information or evidence for an opinion to be formed. Odd. I would have thought the absence or lack of such info or proof would be enough for anyone to form an opinion which will be : How can leh?

Question: Is a “qualified’’ auditor’s report that has a disclaimer of opinion consider better or worse than an “adverse’’ report?

I am no accountant or auditor so I guess I’ll have to speculate on why there are missing pieces in the Aljunied-Hougang-Punggol East financial report that defied the auditor’s ability to give a view.

  1. The dog ate the minutes and records that the auditors wanted
  2. They were destroyed in a flash flood or blackened by the haze
  3. Some of the missing stuff is with the previous owner/agent and they don’t want to give them to us for some reason.
  4. They contained some embarrassing stuff so they were hidden from sight.
  5. We misplaced all the receipts or threw them down the rubbish chute or recycled them.
  6. So long as residents don’t complain, why do we need to keep complicated accounts that will take time away from doing what the residents really want?
  7. The more info we give, the more fault people will find with us.
  8. Hmm… what are receivables anyway?

All is guesswork and as such, cannot form the basis of an opinion by the way.

Anyway, the battle is afoot! There goes the G in the form of the National Development ministry making hay of the independent auditor’s report on the Workers’ Party’s past work. Snipe! Counter-snipe! Snipe! Counter-snipe! You can expect the People’s Action Party to add to the exchange of fire, to rock the confidence of voters in their elected members’ ability to manage their housing estate in a financially prudent and competent manner.

The WP is feeling pretty aggrieved at what it called insinuations in the media that it had not been aboveboard in its town council dealings. There have been hints of dishonesty or favouritism, yes. If so, the WP should the right thing: sue the offending parties for libel. Or the MND as regulator should take the town council to task in some way under the powers accorded to it.

Yet, there seems to be stalemate. One which started ever since Aljunied GRC came under the WP.  To be sure, it has been entertaining. The PAP seems to be hitting back after the WP exposed the existence of a PAP company which managed its information systems. Tables have been turned and the WP looks to be on the defensive. The opposition seems to be digging in, or is it digging a hole for itself?

Efficiency and effectiveness have been a hallmark of PAP governance and when the town councils were instituted years ago, it was to impress that fact into voters. They were told their votes would have immediate consequences on their living environment as the elected political party would be running their neighbourhoods. Sure, Potong Pasir and Hougang, small, single-member constituencies were wrested from the PAP and they too had some teething problems, including the fact that the grassroots structure is entirely in the G’s hands. But over the years, residents reckoned that they were still good enough to run their estates, thereby voting the opposition in again and again. (Until the last GE when Potong Pasir went back into PAP hands)

It was a different ball game when a whole GRC was lost. It represented an opportunity for the WP to tackle bigger game. If it does well, then the PAP would have lost a key card: that only the PAP can manage estates in such a way that rubbish doesn’t pile up storeys high in the chutes. (Remember?) If it doesn’t, then the PAP can crow that it is right. If an opposition party cannot manage a GRC, would voters in GRC keep them or would those elsewhere vote them in? And how could it manage even bigger game, like the government of a country?

The problem, however, is that residents-cum-voters have never quite been inducted into town council work. All they care about are clean corridors, working lifts and low service and conservancy charges. How all three components come together, and are linked, are like alchemy to most people who are too busy making a living. And what role does the G, or the HDB, or the National Environment Agency or the People’s Association or the town council, or the Community Development Council or the political party branch play in the neighbourhood?

To residents, the work of the town council had seemed no different from pre-town council days. Talk of engaging residents in estate maintenance appear to be confined to getting them to vote on whether to get their blocks upgraded or a new colour scheme or fancy name for the neighbourhood. Perhaps, there was a jolt during the Lehman Brothers crisis when it appeared that town councils had lost money in investments. Maybe that year, more residents bothered to look up their TCs’ financial reports.

In any case, the PAP TCs seemed to be working like a collective most of the time although there are variations in the amount of S&C charges among the town councils and estate maintenance levels.

In recent time, I daresay residents have been getting an education in grassroot politics and financial management. Parochial matters like who pays for hawker centre cleanings, who gives out licences and the political connections of a managing agent would never have made big news in the past. Nor would the role of the Citizens Consultative Committee – and its advisers – be questioned as much as now.  Even the cancelled invite of Dr Tan Cheng Bock to an Istana party threw some light on grassroots politics.

You almost wished the HDB was back in charge so that residents can just go on living quietly without needing to get grimy.

The WP has been having a hard time of it.

It has had to face an entrenched grassroots system with significant financial muscle and oversight over some areas in the estate, and which has a member of the ruling party as its adviser. The system comes under the purview of the People’s Association headed by a minister. It is common to find key grassroots leaders wearing both the party and community hats.  

From four instances in its annual report that independent auditors queried in the WP’s first year as a mega-TC,  the number has now grown to 13. It seemed that the four instances which refer to the “handover’’ of Aljunied GRC from the PAP to the WP have still not been resolved. In a interesting riposte, the WP suggested that MND help it get the information from the previous auditors and other parties:  “Unless those agencies with the required information furnish them to the Town Council, it is likely that information gaps will remain and the accounts will continue to be qualified every year…In this regard, we note that the MND could well be the best party to assist the Town Council to resolve some of the key information gaps.”

No, MND did not say it would help out, but merely pointed out that the WP had pledged earlier that it would resolve them.

Question: Would the previous auditor, the CCC and the previous PAP TC please respond?

As for the other nine instances, the WP doesn’t seem to have an answer for the state of its financial accounts.

In its responses, it focused on tackling what looked like a direct contravention of TC rules, that it transfer funds into the sinking account. This was described as an oversight which had since been rectified. That is just one “save’’.

The bottomline is that more than $20million worth of funds seemed to be in question. A few instances cited refer to its employment of its managing agent FM Solutions who comprised party supporters. This is where the hints of “cronyism’’ are concentrated. The WP noted that the MND and auditors took issue with how the town council did not provide details of project management service fees paid to the agent. It said it was surprised as it was “standard practice for town councils to include project management fees in the managing agent services awarded’’.

Question: Is that true?

The WP gave an interesting piece of background on the hiring of the agent. When it opened job for tender, there were three interested parties but only one applicant, the incumbent who had ties with the party. One wonders what would have happened if no one wanted to take on the job?  Re-tender again and again? MND steps in? Or is it the responsibility of the political party to iron out that wrinkle, which means it would most probably turn to its supporters – and that’s wrong?.

But there have been other charges of over-payment and of projects awarded without tender. Allegations of impropriety. Various sums have been put out and it is likely that only close political observers would keep track, not the residents in Aljunied and Hougang.

The image painted, however, is that there is something not quite right in the town council, and that this is not in the interest of residents. What of next year’s financial statement when the TC would have to factor in the management of Punggol East?

Both the WP and the MND should stop the sniping and settle questions of illegality, irregularity or impropriety.  

 

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