atans1

Accounts: PA fixed, WP got fixed?

In Corporate governance, Political governance on 24/02/2014 at 5:24 am

The usual suspects and other anti-PAP netizens are outraged that Khaw’s ministry has highlighted various concerns regarding the auditor’s report on the financial statements of Aljunied-Hougang Town Council (AHTC) for Financial Year 2012, and Tharman has gotten the Auditor-General to investigate the matter, while no-one in govt is investigating why the PA’s “auditors have been giving an “adverse opinion” on the financial reports from the People’s Association (PA) for several years now.” http://www.tremeritus.com/2014/02/20/breaking-auditors-give-adverse-ratings-to-pas-financial-reports/

I won’t go into the rights and wrongs of the AHTC’s accounts because we will soon know the truth*, except tthat I found it puzzling that Auntie said bar one concern, they were related to handing-over issues. Some were, the others were not, even a cursory glance would have shown her, as it did me (both of us are trained lawyers). Anyway let’s wait for the report, though having witnessed at first hand how the AudG audits govt bodies, WP is in for a nasty report. It is hated and feared by the rest of the govt machinery. It works like the ISD: takes no prisoners. AudG is also very petty.

As to the PA’s accounts, I won’t go into details because the issue is one of consolidating accounts** and the PA had given up its row with its auditor and will be consolidating the accounts that the auditor wanted consolidated effective last yr’s accounts, due soon. It had resisted complying since the auditor raised the issue (“Auditor KPMG noted the omission of the financial statements of the community centres and community clubs”).in the accounts for FY 2001.

The usual suspects should be asking if the fixing of the PA’s accounts (WP Low had raised the issue in 2008 and was told to  Foff http://www.theonlinecitizen.com/2014/02/low-thia-khiangs-question-in-2008-on-pas-adverse-accounts-rating/: there was nothing wrong with the accounts**) and the row over the AHTC’s accounts are linked? Could it be that the decision to fix the way the PA’s accounts are prepared, was done in the expectation that the dysfunctional duo (Auntie and PritamS: remember they are lawyers, not accountants) would have failed to fix the AHTC’s accounts for the second yr in a row. And there could be an opportunity to show the entire WP as dysfunctional? Remember that a chain is as strong as its weakest link, and Pritam has shown us repeatedly that he keeps saying or doing the wrong things***. Or is this line of reasoning (fixing to fix) too cynical or too conspiratorial? Even believing that JBJ and friends really won at Cheng San, or that Ong Teng cheong lost the presidential elections is more believable?

Seriously, in thinking about the row on the audit reports, I hope readers remember the wise words of Low.  TOC reported that Low is also extremely “confident” that none of the Town Council’s funds were lost, and that there was no involvement of any form of illegal payment or transaction.”

WP Low got the issue absolutely right. It’s all about whether any funds were lost, and whether  there was “any form of illegal payment or transaction”, not whether he PA’s or AHTC’s accounts get clean audit reports, ’cause they do the “right” things. Audit reports are very impt, but they are maps not the reality.  The auditor gave Enron a clean audit report. Both are history. 

They should also take into account the following comments:

—  I think overall audit standards are tightening. What passed as ok earlier is not acceptable anymore (unless we have a serious case of casting with closed eyes). Seeing how liable for professional negligence auditors can be, no one is going to ruin their rice bowl any time soon unless they’re really old and ready to be disbarred. (Facebook poster)

As somebody who has been audited many times and qualified as an accountant, I am also breathless with admiration how so many capable and intelligent people can deliver so little value to society. Most big four accountants are capable individuals but put them together and they seem incapable of delivering anything of value to companies.  (A FT reader on a FT article on accountants)

I’ll leave with a wicked tot. Low has said he is “not an accountant”. Remember he said he was “not a private investigator (remember  https://atans1.wordpress.com/2012/05/21/lol-expelling-yaw-took-courage/?). So will he, one day, tell tell us he is not a manager when Auntie’s and Pritam’s dysfunctionality finally causes the WP serious damage, and they have to move on from the WP like Yaw?

*Though I sure if the AudG sides with the MND, the usual suspects and groupies will be accusing AuditorG of being biased. When that happens, I hope they will then stop using AudG’s reports against the govt. Can’t suka suka use favourable reports, not unfavourables. After all, they claim not to be like the PAP govt: who is happy to use TI’s figures when it praises S’pore and slimes it when its figures slime S’pore http://www.tremeritus.com/2014/02/19/dr-ng-condemns-tis-defence-spending-rating-for-sg/. If the government finds TI not to be credible {on defence procurement issues] as Dr Ng has alleged in Parliament, perhaps the government should stop using TI’s rankings and surveys altogether.

For a start perhaps, CPIB could stop using TI’s rankings on its website. Presently, it prominently displays TI’s CPI on its home page [Link]:

**As regards PA’s non-consolidation of grassroots organisations’ accounts, the auditor, PriceWaterhouseCoopers, has qualified the financial statements of People’s Association on the basis that the accounts of the grassroots organisations were not consolidated. PA’s view is that the accounts of grassroots organisations should not be consolidated for the following reasons.

Firstly, the funds in these accounts belong to the grassroots organisations. Secondly, the Government grants and the cost of staff support are already accounted for in PA’s financial statements. Thirdly, the grassroots organisations are operationally self-funding through revenues from activities, courses and donations. Fourthly, the grassroots organisations decide on how their money should be spent for the benefit of the residents. And, finally, proper procurement procedures, financial control and good corporate governance practices apply to the grassroots organisations.

***Think

— his “coalition with the PAP” comment;

— planning footie on PAP MPs’ team:

— silly slip that only a lawyer buruk would make https://atans1.wordpress.com/2012/03/16/c-wps-performance-during-the-budget-debate/

— Hawkergate: https://atans1.wordpress.com/2013/07/25/low-shows-the-usefulness-of-non-action/

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  1. […] – TOC: Town councils and the State – same old repertoire, or a new direction? – Thoughts of a Cynical Investor: Accounts: PA fixed, WP got fixed? […]

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