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SINGAPORE: The appointment of FMSS as the managing agent for the defunct Aljunied-Hougang-Punggol East Town Council (AHPETC) was "tainted" right from the start and warranted further investigations, accounting firm PwC said in a report submitted on Tuesday (May 2).
The auditor added that Punggol East constituency could have saved at least S$500,000 during the time it was managed by the Workers' Party-run town council, had AHPETC followed proper procedure in awarding contracts and making payments.
The accounting firm was appointed by Pasir-Ris Punggol Town Council (PRPTC) to review past payments made by AHPETC during the time the Workers' Party was managing Punggol East SMC.
PRPTC took over the management of Punggol East after the People's Action Party took back the constituency in the 2015 general election, and AHPETC was renamed the Aljunied-Hougang Town Council (AHTC).
TAINTED "RIGHT FROM THE START"
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In their report, PwC auditors found that the appointment of FMSS as managing agent was not in accordance with the Town Councils Financial Rules, and involved a circumvention of the provisions and safeguards prescribed in the rules. "It could not be said to be done in the best interest of the town council or in good faith," the report stated.
It added that the "tainted circumstances" surrounding the appointment of FMSS would put the propriety of payments made to FMSS into question.
The auditors noted that it also appeared that "a deliberate course of action could have been taken by some within the town council" to appoint FMSS as the managing agent.
However, they said that it was beyond the scope of the review to look into potential criminal liability, and instead stated that the circumstances may warrant further investigations.
The report also concluded that FMSS – which was incorporated on May 15, 2011, seven days after the general election that year – had already been assured of the job as managing agent.
Some of the elected town councilors had already decided to appoint FMSS, even before the incumbent company, CPG Facilities Management, had expressed any preference to be released, the report said.
"It also appears to us that the circumstances collectively may give rise to inferences that a deliberate course of action could have been taken by some within the town council to appoint and install FMSS as the MA," the auditors said.
"These circumstances clearly taint the appointment of FMSS right from the start."
The report did not name any individuals, but stated that "those within the town council who had brought about the present situation where improper payments under the above circumstances have been determined, ought to be fully responsible for all losses the town council may suffer".
AT LEAST S$500,000 COULD HAVE BEEN SAVED: AUDITORS
There was also a general lack of documentation on the full reasons and justifications why some vendors were awarded contracts although they were the sole bidder, or when they did not submit the lowest bid, the PwC report said.
The auditors cited an instance in which AHPETC awarded a contract to the sole bidder, despite indications that the vendor's rates were higher than that of the incumbent contractors. The town council could have saved S$25,920 by extending the existing contracts, the report said.
In another instance, a contract was awarded to a single bidder based solely on anecdotal experience of the bidder's recent work. AHPETC paid the vendor a total of S$27,545.65 without complete supporting documents, the report said.
In all, the town council could have saved a total of at least S$506,562.06, had payments been made in compliance with the Town Councils Financial Rules, the report said.
It added that the individuals who made the decision to enter into the contracts or approve the payments "should bear personal responsibilities for the loss of this amount".
PwC's FINDINGS "DEEPLY TROUBLING"
PWC's findings were "deeply troubling", PRPTC said in a media statement in response to the report. The town council said it was still reviewing the report, and would seek legal advice on how to proceed.
It said it was mulling whether it should take steps to "recover the losses suffered by Punggol East residents as a result of AHPETC’s mismanagement".
The town council also noted that an independent panel was appointed two months ago, to decide on how to act on the findings of an earlier report by KPMG, but that the panel has not yet reached a decision on what steps to take.
In a media statement issued later Tuesday, the Ministry of National Development said that PwC's latest findings "reinforce our concerns regarding how public funds under the town council’s charge had been managed".
The ministry said that the Housing & Development Board would forward the PwC report to the independent panel that was appointed by AHTC in February 2017, so that it can consider what recovery and legal actions are necessary and appropriate.
When contacted by Channel NewsAsia, AHTC chairman Pritam Singh said the town council was reviewing the report and would comment thereafter.
Read more at http://www.channelnewsasia.com/news...managing-agent-tainted-right-from-the-8812174
The auditor added that Punggol East constituency could have saved at least S$500,000 during the time it was managed by the Workers' Party-run town council, had AHPETC followed proper procedure in awarding contracts and making payments.
The accounting firm was appointed by Pasir-Ris Punggol Town Council (PRPTC) to review past payments made by AHPETC during the time the Workers' Party was managing Punggol East SMC.
PRPTC took over the management of Punggol East after the People's Action Party took back the constituency in the 2015 general election, and AHPETC was renamed the Aljunied-Hougang Town Council (AHTC).
TAINTED "RIGHT FROM THE START"
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In their report, PwC auditors found that the appointment of FMSS as managing agent was not in accordance with the Town Councils Financial Rules, and involved a circumvention of the provisions and safeguards prescribed in the rules. "It could not be said to be done in the best interest of the town council or in good faith," the report stated.
It added that the "tainted circumstances" surrounding the appointment of FMSS would put the propriety of payments made to FMSS into question.
The auditors noted that it also appeared that "a deliberate course of action could have been taken by some within the town council" to appoint FMSS as the managing agent.
However, they said that it was beyond the scope of the review to look into potential criminal liability, and instead stated that the circumstances may warrant further investigations.
The report also concluded that FMSS – which was incorporated on May 15, 2011, seven days after the general election that year – had already been assured of the job as managing agent.
Some of the elected town councilors had already decided to appoint FMSS, even before the incumbent company, CPG Facilities Management, had expressed any preference to be released, the report said.
"It also appears to us that the circumstances collectively may give rise to inferences that a deliberate course of action could have been taken by some within the town council to appoint and install FMSS as the MA," the auditors said.
"These circumstances clearly taint the appointment of FMSS right from the start."
The report did not name any individuals, but stated that "those within the town council who had brought about the present situation where improper payments under the above circumstances have been determined, ought to be fully responsible for all losses the town council may suffer".
AT LEAST S$500,000 COULD HAVE BEEN SAVED: AUDITORS
There was also a general lack of documentation on the full reasons and justifications why some vendors were awarded contracts although they were the sole bidder, or when they did not submit the lowest bid, the PwC report said.
The auditors cited an instance in which AHPETC awarded a contract to the sole bidder, despite indications that the vendor's rates were higher than that of the incumbent contractors. The town council could have saved S$25,920 by extending the existing contracts, the report said.
In another instance, a contract was awarded to a single bidder based solely on anecdotal experience of the bidder's recent work. AHPETC paid the vendor a total of S$27,545.65 without complete supporting documents, the report said.
In all, the town council could have saved a total of at least S$506,562.06, had payments been made in compliance with the Town Councils Financial Rules, the report said.
It added that the individuals who made the decision to enter into the contracts or approve the payments "should bear personal responsibilities for the loss of this amount".
PwC's FINDINGS "DEEPLY TROUBLING"
PWC's findings were "deeply troubling", PRPTC said in a media statement in response to the report. The town council said it was still reviewing the report, and would seek legal advice on how to proceed.
It said it was mulling whether it should take steps to "recover the losses suffered by Punggol East residents as a result of AHPETC’s mismanagement".
The town council also noted that an independent panel was appointed two months ago, to decide on how to act on the findings of an earlier report by KPMG, but that the panel has not yet reached a decision on what steps to take.
In a media statement issued later Tuesday, the Ministry of National Development said that PwC's latest findings "reinforce our concerns regarding how public funds under the town council’s charge had been managed".
The ministry said that the Housing & Development Board would forward the PwC report to the independent panel that was appointed by AHTC in February 2017, so that it can consider what recovery and legal actions are necessary and appropriate.
When contacted by Channel NewsAsia, AHTC chairman Pritam Singh said the town council was reviewing the report and would comment thereafter.
Read more at http://www.channelnewsasia.com/news...managing-agent-tainted-right-from-the-8812174
