By MP for Punggol East SMC, Lee Li Lian
[Delivered in Parliament on 13 Feb 2015]
Madam, I reiterate what my fellow party colleagues had all said before me, that is, the TC acknowledges that there are areas for improvements which were highlighted by the audit. Going forward, we are committed to improve the processes and have indeed taken on some measures already.
There are 2 parts to my speech. Part one, is to address some of the disclaimers pointed out by AGO and what TC has since done to improve the system and work processes. Next, will be my experience on unforeseen challenges faced by opposition TC.
Disclaimers flagged out by AGO.
I refer to Appendix A of the AGO’s report, disclaimers 8, 9 and 10 and what AHPETC has since done to improve our systems and work processes. These are information already publicly available.
Disclaimer 8: Income taxes
AHPETC had since engaged a tax agent to prepare the income tax computations for FY2012/13 and FY 2013/14.
Disclaimer 9: Goods and services taxes
Some of these problems arose because the former Finance Manager who is familiar with GST submissions had unfortunately resigned. Going forward, the TC will work with IT vendor to split the GST for routine and sinking fund income or expenses in the system. Several of our TC Finance team are now familiar with the apportionment formula required by IRAS. Systems and processes for out going staff have been put in place as mentioned earlier by Mr Pritam Singh.
Disclaimer 10: Cash and bank balances
AHPETC recognized that it is good control practice for bank reconciliation to be independently reviewed and for the reviewer to sign off and date on the bank reconciliation statement as evidence of review. When Aljunied-HOUGANG TC was formed in 2011, the merger resulted in the TC inheriting several bank accounts from the former management, in addition to those from HOUGANG TC. These accounts were mainly used for receipts and payments. To streamlined the accounts, the TC decided to close unnecessary accounts, leaving only 4 accounts, that is, one operating fund account and one sinking fund account each with 2 banks. Since mid-2013, TC has been doing monthly bank reconciliation at the account level for each of these 4 accounts.
I move on to Appendix B of the AGO report on Internal Controls point 5, 6 and 7.
Point 5: Weak controls over cheques received
The TC noted AGO’s observations and had improved upon its safeguarding of cheques received by mail. Cheques not banked in by the end of the day are now placed in the safe. As an additional control, all cheques received are scanned by Finance staff into a central server. Currently, the reception area is already monitored by CCTV, which would be able to detect unauthorized personnel accessing mails received.
Point 6: Surprise examinations not carried out in accordance with town councils financial rules
TC has noted this observation and will implement surprise checks by the TC Secretary or his representative at every branch office at least once a financial year. A senior Finance staff had gone to each branch office in FY13 and FY14 to conduct a surprise check on cash collections and balances.
Point 7: Weak controls over access to strong room and safe
There were already written authorizations by the Secretary to various officers to hold the keys to the strong room in the TC HQ and Finance rooms and safes at TC HQ as well as the branches. TC has since enhanced its controls and obtained Chairman’s and Secretary’s authorizations for access to the strong rooms and safes.
Next, I move on to unforeseen challenges
I had my first ‘surprise’ shortly after the Punggol East By-Election in Jan 2013. I was on the ground shortly after to meet representatives from the then conservancy contractor for both SK 1 and SK 2. SK 1 refers to blocks 101 to 141 and SK 2 are blocks 142 to 197.
We were informed by the contractor from SK 1 that because of issues they were having with the Ministry of Manpower, they were not able to continue their contract with AHPETC.
As AHPETC was going to take over only from May 2013, the TC requested the handing over TC that is Pasir Ris Punggol TC, to call for a tender for SK 1 in March. Subsequently, 2 established cleaning companies tendered for the contract.
The tenderers were invited to attend the tender meeting in late April 2013, just before the handover in May. Unfortunately, representatives were sent from both companies to inform that they were no longer able to participate in the tender and would like to withdraw from the tender process. It was also followed up by written notices to the TC Chairman on their decision to withdraw without any valid reasons.
AHPETC had no choice but to respect the company’s decision to withdraw. As the incumbent conservancy contractor was to cease their services by end June 2013, TC then needed to quickly make a decision to invite companies to tender; otherwise no one will be clearing rubbish and cleaning lifts! This is just one of the many challenges opposition TC faces.
On the other hand, I am pleased to note that EMSU services provided by the previous contractor continued their services in Punggol East. Regardless of political affiliations, residents’ interests should always be the priority and there should not be elements of political preference or fear. It will be sad if there are elements of fear when bidding for a project in opposition TCs.
In conclusion, we respect the findings made by AGO. In response, I want to emphasize that the TC has already made changes to work processes, systems and procedures to With that, I would like to end off my speech by thanking all staff who were involved in this rigorous audit process.
Thank you.