With revelations that it has self-funded the engagement of another audit firm, Aljunied-Hougang Town Council (AHTC) has countered the Ministry of National Development’s (MND) concerns against the recurrence of past control failures if it did not recuse MPs Low Thia Khiang and Sylvia Lim from its financial affairs.

In a press statement released after MND publicly insisted that Mr Low and Ms Lim’s continued involvement in AHTC’s financial affairs would jeopardise the town council’s procurement and payment processes, AHTC also made specific mention of Lim’s work in improving its corporate governance rating.

AHTC achieved unqualified financial statements for FY2018 and earned a “green” banding in the recently released FY2018 Town Council Management Report’s corporate governance indicator.

AHTC’s good performance in corporate governance comes as two ruling party town councils, Holland-Bukit Panjang and Jurong-Clementi, were given an “amber” banding in the same category.

In a press statement released in the wake of MND’s statement, AHTC revealed that while KPMG helped resolve the control-related issues flagged for resolution in past audits, the KPMG engagement ended in Feb 2018 and the town council self-funded the engagement of another internal auditor.

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Revealing that the engagement with Baker Tilly Consultancy helped AHTC “improve the rigour of our finance and management processes,” the town council made specific mention of Sylvia Lim’s work in improving its corporate governance rating.

“AHTC worked alongside audit firm KPMG to resolve control-related issues identified for resolution. We thank KPMG for the guidance to improve our control processes, as well as AHTC staff for the long hours put in to facilitate the completion of this rigorous audit exercise.

“In addition to the Town Council’s engagement with KPMG which ended in February 2018, AHTC initiated a self-funded internal audit engagement with Baker Tilly Consultancy (Singapore) Pte Ltd to improve the rigour of our 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 Mr Png Eng Huat and current Vice-Chairman Ms Sylvia Lim,” AHTC said.

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AHTC also said that it will respond to MND’s letter in which it is seeking clarification on why Mr Low and Ms Lim were not recused from financial matters by the stipulated deadline of December 13, 2019. Read its statement in full HERE.

Although AHTC did well in FY2018, MND attributed AHTC’s performance in corporate governance to auditor KPMG “which assisted AHTC in its remediation of past control failures and audit points” over two years and insisted that the town council should recuse Mr Low and Ms Lim from its financial affairs.

Casting aspersions over whether the measures KPMG implemented would adequately “guard against the recurrence of the past control failures” if Ms Lim and Mr Low remained involved in AHTC’s financial affairs, MND said that “the adequacy of the measures is entirely dependent on their implementation by the individuals involved with AHTC’s financial affairs.”

In October, Ms Lim and Mr Low were found liable for damages by the High Court in the AHTC civil lawsuit. In November, Parliament passed a motion tabled by Deputy Prime Minister Heng Swee Keat to get AHTC to make Mr Low and Ms Lim “recuse themselves” from AHTC’s financial affairs, even though the MPs are appealing the High Court decision in the apex court.

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On Nov 30, AHTC town councillors voted on whether Ms Lim and Mr Low should recuse themselves from AHTC financial matters and decided that the MPs did not need to do so.

Less than a week later, MND revealed that it is considering taking regulatory action against AHTC “to ensure the proper safeguarding of public monies entrusted to town councils” and has asked why Mr Low and Ms Lim have not recused themselves.