Commissioner of Charities finds millions from Sri Veeramakaliamman Temple funds were put at risk due to shady deals

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The Ministry of Culture, Community and Youth (MCCY) disclosed today that an inquiry into one of Singapore’s oldest temples has revealed “severe mismanagement” in the administration of the charity.

The inquiry, by the Commissioner of Charities (COC), was initiated last August, even as the Commercial Affairs Department launched a separate probe into the financial affairs of the temple for suspected criminal offences last year. The Commercial Affairs Department investigation is still ongoing.

A distinctive landmark located in the heart of Little India, at 141 Serangoon Road, the Sri Veeramakaliamman Temple is the subject of the COC investigation which showed that “severe lack of prudence and care” by three key office bearers put large amounts of money at undue risk.

The office bearers are:

  • R. Selvaraju (“Selvaraju”) – Chairman of the Charity’s Management Committee from 26 December 2011 to 19 November 2016.
  • Sivakadacham (“Siva”) – Trustee of the Charity and the current Chairman of the Management Committee with effect from 20 November 2016. Siva was the former Treasurer of the Charity Management Committee during the period 1 January 2011 to 19 November 2016.
  • Ratha Krishnan Selvakumar (“Kumar”) – Trustee of the Charity and Secretary of the Management Committee from December 2011 to present.

We take a closer look at the issues the COC flagged during its inquiry:

Overpaid vendors

All three key office bearers were the cheque signatories and approvers for payment vouchers between Jan 1, 2011 and Jul 31, 2014 and needed to sign jointly for the temple to make any payment. The inquiry showed that the office bearers had erroneously made multiple duplicated payments that resulted in vendors being overpaid for their services.

Use of uncrossed cheques and poor records put over $1.5 million at undue risk

The inquiry also found that the temple had issued at least 823 uncrossed cheques amounting to more than $1.5 million, between Jan 1, 2011 and Jul 31, 2014. These uncrossed cheques could have been, in theory, cashed out by any individual who chanced upon the cheques. The temple also allowed those who possessed uncrossed cheques to exchange the cheques for cash received from donations.

In 45 of the 823 transactions, in excess of S$227,000, uncrossed cheques were not issued to the names of the intended recipients no supporting documents were kept to ensure that the intended recipients eventually received the cash.

It was also revealed that Kumar received cash advances amounting to S$18,000 through uncrossed cheques issued by the temple. No receipts were found to serve as evidence that the temple’s funds were legitimately used. The temple also had not put any internal controls in place to safeguard the cash advances that were disbursed.

Temple repaid unauthorised cash loans obtained by Kumar

The inquiry further found that Kumar had obtained loans totalling S$350,000 without the approval from the management committee and without written loan agreements with the lenders, on behalf of the temple.

The administration claimed that the cash borrowed from these loans was used to pay tokens of appreciation to about 250 individuals who had helped at the consecration ceremony on Jun 22, 2014. There was, however, insufficient evidence to support these claims or to substantiate that the cash obtained from the loans was paid to all the intended recipients.

On top of this, the loans were repaid using the temple’s funds with the payments approved by the key office bearers even though the management committee’s minutes of meetings initially showed that Kumar was requested to repay the loans.

Furthermore, these cash loans and disbursements of the proceeds were not properly accounted for in the relevant audited financial statements, rendering the temple’s accounting records inaccurate.

Loans disbursed to staff from temple funds and offset without authorisation

The inquiry also showed that loans were disbursed to staff and that no controls were put in place to monitor these loans or prevent staff from manipulating the records without authorisation.

The probe found that in one instance, staff loans amounting to $10,000 were removed from the temple’s accounting system. The temple’s assets were reduced by $10,000, in this instance, and a corresponding $10,000 was allotted to salary expenses. These changes were achieved by unauthorised journal entries that were entered into the system.

In another instance, the temple’s management committee had also approved an additional loan of S$5,000 to an employee without even initiating a repayment plan for what he already owed.

“Serious” conflicts of interest uncovered

“Serious” conflicts of interest were also uncovered by the COC probe. It turns out that temple entered into transactions of more than S$750,000 with two vendors owned by Kumar’s relative. Kumar was one of the approving parties to the temple’s transactions with the vendors owned by his relative.

On top of this, the temple also paid Kumar $2,824 for the purchase of SIM cards from his personal business. According to the COC, “there were no documented policies or procedures in place relating to declarations of actual or potential conflicts of interest.”

It is unclear whether Kumar may have approved these payments to himself or whether sufficient competitive quotes were sought before Kumar’s personal business was selected to supply the SIM cards.

Questionable transactions with intermediaries 

The probe uncovered that the temple had disbursed a hefty $314,250 to intermediaries who purchased supplies and precious metals from overseas suppliers on its behalf. These intermediaries were not bound by a service contract nor were they paid for their services.

The intermediaries were also not expected to obtain competitive quotes before making purchases on behalf of the temple. No contractual safeguards were implemented to protect the temple from the intermediaries acting improperly on its behalf.

Poor financial governance and records

Internal financial controls were practically absent from the administration of the temple, with all policies and procedures being verbally agreed and communicated. This severely degraded the ability of the management committee members and employees to reliably oversee the temple’s financial operations.

Due to this, several instances of poor financial governance occurred – such as donations collected for the building fund being used for operating expenses instead of being used for building works or renovations. There were also many instances where payments paid by the temple were not substantiated by sufficient supporting documents. These payments were made in excess of S$500,000, in total.

The COC also noted inconsistencies in employee benefits that were approved and benefits that were actually given. In one example, private chauffeur services amounting to about $48,000 were provided to Selvaraju and Siva after the consecration ceremony even though the management committee only approved the use of private chauffeur services during the ceremony.

Discrepancies and inaccuracies in accounting records

The probe further found several discrepancies and inaccuracies in the temple’s financial records. In one instance, the Land and Building account in the audited financial statements for the year ended Jun 30, 2014 was understated by more than S$6 million due to an error.

The inquiry also noted that only one accountant engaged by the temple was professionally trained in accounting, but even this outsourced staff only worked on a part-time basis and was not involved in the temple’s daily operations.

On the severe issues uncovered by the probe, the Commissioner of Charities said: “These disquieting findings may very well have been prevented if the management committee, particularly the key office bearers, exercised adequate care and prudence in their governance and financial management of the charity.”

Actions taken by the COC

In order to safeguard the temple’s charitable assets, the COC has suspended Siva from his posts with immediate effect, with the consent of the Attorney-General. It also plans on removing Siva from his office as governing board member and trustee of the Charity.

The COC also noted that Kumar has been “previously convicted of criminal offences involving elements of dishonesty” and that this disqualifies him from acting as a governing board member, key officer or a trustee for a charity.

Since Selvaraju resigned from his posts in 2016, no actions will be taken against him at present. The COC, however, warned that it will not hesitate to take action against him if he resumes any office in the temple.

Further, the COC has appointed 3 additional governing members to the temple’s board, to put proper board governance and internal controls into place.

Read the COC’s full report here.

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