Debate on the Auditor-General’s Report on the Audit of AHPETC – MP Low Thia Khiang

By MP for Aljunied GRC, Low Thia Khiang
[Delivered in Parliament on 12 Feb 2015]

Mdm Speaker,

The Workers’ Party supports the motion.

We treated the AGO audit seriously. I understand the Town Council had made all efforts to respond to AGO queries to the extent of the need to prioritise the audit over some other works due to manpower resource constraints. The chairman of the Town Council Sylvia Lim attended to AGO audit personally. The staff employed by the managing agent working at the Town Council has undergone tremendous stress. They are overwhelmed by their workload amid challenging conditions. I would like to thank them for putting in their best efforts.

We take the findings of the AGO seriously and have responded to the details of the finding in writing to AGO. The chairman and vice-chairmen of the Town Council as well as other MPs will deal with the various findings of the AGO report.

I would like to first address the public misconception that the Managing Agent was given the contract without tender.

Open public tenders were called in 2012 for the Managing Agent and EMSU contracts. The most recent tender for MA contract was called in November 2014. However, tender was not called for MA contract for the specific transitional period between July 2011 and July 2012; and for EMSU contract, the period between October 2011 to June 2012; due to the urgency to take over the management of the Town and to ensure that major services are not disrupted to affect the lives of residents.

The Town Councils Act allows the Chairman of Town Council to waive tender requirement under the circumstances.

The fact remains that it has been a challenge for the Workers’ Party, being an opposition party, to attract managing agents. When the public tender was called in 2012, three companies collected the tender document and only one company submitted the tender. In the more recent tender, only one company, the largest MA managing PAP Town Councils, collected the tender document and no one submitted any tender.

What we learn from this AGO audit is that we should have appointed a consultant to look at internal controls in compliance with the Town Councils Act while the elected MPs focus on taking over the management of the town to ensure that major services are not interrupted and residents’ routine lives are not affected. This is something we will do if such a privilege should happen in future elections.

But the problem of professional town management and compliance with the financial rules will remain a real challenge if there are no established Managing Agents who are prepared to do the job. It would seem that Managing Agents serving PAP Town Councils are unwilling to serve as Managing Agents in non-PAP Town Councils, and that the reason appears to be political rather than professional.

It looks like the only option for any opposition party to take over a Town Council will be direct management. I did this in Hougang SMC when I took over the Town Council in 1991. However, at that time, HDB provided Computer and EMSU services and Town Council paid a fee per month for the services. The council recruited staff directly to manage the town. Hougang SMC is a compact constituency.

Currently, the only alternative town council financial accounting system was developed by Hougang SMC which has proven to be inadequate for a GRC town, direct management means newly elected MPs will have to start from scratch to recruit and train staff to be familiar with HDB estate management; to start taking over management of the town within 90 days as required under the Act, and at the same time to look for accounting software to transfer the account into the new system and pray that the system will work. If you are not able to do all these at the same time, you will be labeled as incompetent.

Hence, under our current system, it seems to me that any opposition party which aspires to be elected in a GRC will have to build a town council management team and train over 100 staff officers first, then taking the advice of the Minister for National Development, start shopping for an off-the-shelf accounting software. If an opposition party 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 functioning democracy to be in.

The Workers’ Party was fortunate to have a managing agent at least with the experience in managing the town of Hougang single member constituency and who was prepared to take the challenge of managing a much larger town to enable us to take over the management of the Aljunied GRC town without major disruption to the services affecting the lives of thousands of residents. We did also have a financial accounting system in place although it fell short of features and functions that managing a larger town requires.

I think this is not the way forward for the good of the nation. If we consider residents’ interests as most important, then the Government must also protect residents’ interests in the transition of town management from one party to another party.

We are for transparency and accountability. We are not shy to support the motion that is critical of us and we will address and remedy the issues raised by AGO report. In fact, as you will see from the speeches by my colleagues, we have already taken concrete steps to address and remedy many of the issues.

We are fully aware that if we overlook certain matters, the PAP government will be the first to take us to account, we are not daunted by it as this is what a First World Parliament should be – keep whoever is in charge on the toes to do the job properly and be accountable to the people.

AGO has taken a year to check the accounts of AHPETC for the financial year 2012/2013 and found lapses in several areas. It has not found the Town Council to be engaged in corrupt practices nor that any monies have been lost or misappropriated after thousands of transactions were examined.

We should put this episode in a proper perspective. Based on the Town Council Management Report, except S&CC arrears management and Corporate Governance, AHPETC’s performance in other aspects of town management is comparable to other Town Councils.

We support the motion to strengthen the legislative framework for Town Councils. As we relook the legislative framework, we need to look at the depoliticisation of the transitioning process and the professionalising of town management so that incoming Town Councils can work to achieve good management and not be left stranded. Newly elected MPs should not be tested on whether they can build up town management systems from scratch, putting residents’ interests at risk in the process.

Finally, I would like to thank the residents living in the town of Aljunied-Hougang-Punggol East; and the public for their concern and support. Despite the challenging political climate, the Workers’ Party will continue to serve you to the best of its ability.