The Ministry of National Development and the Workers’ Party-run Aljunied-Hougang-Punggol East Town Council (AHPETC) are back in court to hear the ministry’s appeal against a court decision rejecting its application to appoint independent accountants for the town council.
On Monday (Aug 3), the Court of Appeal will hear the case, as well as the Housing and Development Board (HDB)’s application to be co-plaintiff.
The following is a timeline of key events in the past 18 months leading up to the court case:
Feb 10, 2014: AHPETC submits its audited accounts for FY2012/13 to the Ministry of National Development (MND) – six months late and after seven reminders.
Feb 13: In a media statement, the MND expresses concern that it is the second year that AHPETC's auditors have been unable to fully verify the town council’s accounts.
Feb 14: WP chairman Sylvia Lim says MND’s statement is incomplete and misleading. She says the auditors were unable to fully verify AHPETC’s accounts due to “information gaps” that existed at the handover after GE 2011.
Feb 19: Deputy Prime Minister and Finance Minister Tharman Shanmugaratnam directs the Auditor-General to audit AHPETC's accounts, after the town council’s own independent auditor raised 13 issues of concern, up from the four areas flagged in FY2011-12.
Mar 7: AHPETC gets a “red” grade, the lowest rating, for corporate governance in an MND report on the performance of town councils. AHPETC has failed to transfer S$12.46 million into the bank account of the sinking funds and failed to keep proper accounts and records of its transactions and affairs, MND says.
Apr 28: MND writes to Workers’ Party (WP) chairman Sylvia Lim informing her that the ministry is considering withholding the service and conservancy charges (S&CC) operating grant until the conclusion of the audit. It says that AHPETC must respond within 10 working days if it has views or concerns on the withholding.
May 14: No response was received from the town council, the ministry says.
Jun 16: Ms Lim calls on MND to “disburse without further delay” the S$14 million operating grant it has withheld.
Jun 20: MND replies to Ms Lim, saying it is “prepared to reconsider” the withholding of the grant. Following this, the ministry and the town council have a series of exchanges to clarify AHPETC’s cash flow position.
Oct 7: MND informs Ms Lim that it is “deeply concerned” about the town council’s financial situation, but says it is prepared to consider releasing half the operating grant to AHPETC while the audit is still ongoing. The deadline passes and there is no word from Ms Lim, MND says.
Nov 4: MND releases its Town Council Management Report for FY2013, which says AHPETC’s “persistent poor performance” in several areas is of “grave public concern”. It highlights the town council’s S&CC arrears rate, which rose from 2.6 per cent in FY2010 to 8.4 per cent in FY2011-12, and to 29.4 per cent at the end of April 2013.
Nov 5: WP Secretary-General Low Thia Kiang maintains that the town council has no cash flow problems. He says poor financial management did not impact the council's operations and services, and so did not affect the safety and living environment of the residents.
Nov 7: Minister of State for National Development Desmond Lee calls the town council’s S&CC arrears rate “shocking”. The 29.4 per cent arrears rate means that 39,000 households in AHPETC were “effectively subsidising” 16,000 households who did not pay their S&CC, he notes.
Nov 12: Ms Lim writes to MND, saying that the town council is assessing the situation and will reply again if it wishes to take up the option of the half-grant.
Jan 26: AHPETC says the S&CC arrears rate of 29.4 per cent was inaccurate due to “reporting and human errors”. The town council says its actual arrears rate as of Sep 30, 2014 is 5.66 per cent for homes and 7.24 per cent for businesses.
Feb 9, 2015: The Auditor-General flags major lapses in “governance and compliance” following an audit of the town council’s accounts for FY2012-13. Some lapses included potential conflicts of interest arising from key AHPETC staff being co-owners of its managing agent, FM Solutions and Services (FMSS).
Feb 12: The report's findings spark a four-hour debate in Parliament. Law Minister K Shanmugam calls on WP to “come clean” about the conflicts of interest in the running of the town council.
WP leaders say the Auditor-General's report found no evidence of corrupt practices or missing money, but merely lapses due to human error.
National Development Minister Khaw Boon Wan says the Town Councils Act will be amended to give his ministry greater powers to regulate town councils and take errant ones to task. The ministry also sets deadlines for AHPETC to submit its overdue accounts.
May 4: MND files a court application to appoint independent accountants to oversee Government grants to the town council.
May 27: The High Court dismisses the application, with Justice Quentin Loh saying the ministry had not established legal bases to do so, and that only the Housing and Development Board (HDB) and residents could take action against the town council if they wished to.
May 29: MND files an appeal against the court ruling.
Jun 4: Both parties agree to a court application by MND to expedite the appeal hearing to Aug 3.
Jun 30: MND says AHPETC has submitted its FY2013 audited financial statements and reports, 10 months after the deadline.
Jul 7: The Housing and Development Board (HDB) says it has applied to the court to be a co-plaintiff in MND’s appeal. HDB's application to join the case will be heard on Aug 3, along with MND's appeal.