atans1

Conflicts of interest? What conflicts?

In Corporate governance, Political governance on 10/02/2015 at 4:57 am

Two months ago, I pointed to evidence that indicated that AHPETC did not have an IT monitoring system https://atans1.wordpress.com/2014/12/16/does-ahpetc-have-a-21st-century-it-system/

Turns out I was spot-on because the Auditor-General pointed out, inter alia, that AHPTEC did not “a system to monitor arrears of conservancy and service charges accurately and hence there is no assurance that arrears are properly managed”.and “No proper system to ensure … proper accounts and records were kept as required by the Town Councils Act.” Trumpets pls.

And what does WP say?

We understand that there will be a motion filed in Parliament to debate the matter on Thursday 12 February 2015.  That being the case, the Town Council will give its response in Parliament.

SYLVIA LIM
CHAIRMAN
ALJUNIED-HOUGANG-PUNGGOL EAST TOWN COUNCIL

09 February 2015

Seriously, of all of AGO’s observations*, one to focus on is

  • Inadequate oversight of related party transactions involving ownership interests of key officers, hence risking the integrity of such payments

LAPSES IN GOVERNANCE OF RELATED PARTY TRANSACTIONS

The town council did not fully disclose the related party transactions in its financial statements, nor did it adequately manage the conflicts of interests of related parties arising from ownership interests of its key officers, in contracts amounting to about S$25.9 million in total, the AGO said.

For example, the AHPETC Secretary was the owner of FM Solutions and Integrated Services (FMSI) – one of two companies engaged to carry out managing agent services, as well as essential maintenance and lift rescue (EMSU) jobs. The Secretary, General Manager and Deputy General Manager of AHPETC were directors and shareholders of the other company, FM Solutions and Services (FMSS), the AGO said.

“The key officers of AHPETC who had ownership interests in FMSS and at the same time performed a role (for AHPETC) in approving payments to FMSS were in clear conflicts of interests,” the AGO said. For example, the town council’s General Manager both issued payment claims as director of FMSS while approving the payment as AHPETC staff.

If this had happened at the club where I was Hon Treasurer, not only would have the Committee been booted out but I’m sure members would have lodged a police report, and complained to the registrar of societies.

Doubtless, WP will give an explanation that will be acceptable to the anti-PAP die-hards, but I hope the WP realises that the rabble does not matter (They’ll vote for any monkey even Roy, M Ravi or New Citizen H3, so long as the monkey is anti-PAP). WP has to give a satisfactory explanation to the swing voters: the 24 –35% of the voters whose minds can be changed.

All to play for, WP. How can a co-driver have moral authority if it lacks integrity?

And if the WP fails to give a decent explanation? Then 2011 GE will be another false dawn: like 1991 GE.

Btw, I’m sure one Goh Meng Seng will soon have something to say. And Eric Tan (remember him?) will be smiling. And rightly so. Though I do wish he’d stop allowing himself to be tagged with anti-WP stuff coming from an ally of the PAP. It makes him look petty, something he is not.

*The Auditor-General highlighted five “major lapses” in governance and compliance:

  • Failure to transfer monies into the sinking fund bank accounts as required by the Town Councils Financial Rules;
  • Inadequate oversight of related party transactions involving ownership interests of key officers, hence risking the integrity of such payments;
  • Not having a system to monitor arrears of conservancy and service charges accurately and hence there is no assurance that arrears are properly managed;
  • Poor internal controls, hence risking the loss of valuables, unnecessary expenditure as well as wrong payments for goods and services; and
  • No proper system to ensure that documents were safeguarded and proper accounts and records were kept as required by the Town Councils Act.

“Until the weaknesses are addressed, there can be no assurance that AHPETC’s accounts are accurate and reliable, or that public funds are properly spent, accounted for and managed.”

  1. I’m a sdp supporter.

  2. […] Bertha Harian: WP town council’s shambolic finances – Thoughts of a Cynical Investor: Conflicts of interest? What conflicts? – Blogging for Myself: AGO’s report on AHPETC: All are black pots – Singapore […]

  3. Did the contractors running PAP TCs stayed away from tendering for WP’s contracts? That’s how it ended up to only one contractor? Say if SDP also won an GRC, do you think they can find another contractor?

  4. haha no worries man. withhold s&cc payments until they rectify the weaknesses.

    btw pappy tc’s also got related companies reaping contracts & profits. just that they’re smarter in not having direct interests / relationships. All hidden in convoluted maze of holding coys, shell coys, shells within shells, indirect interest via non-immediate family members, external biz partners, back-to-back contracts, etc etc.

  5. to “abc” comment above : this is a job meant for hsbc (british bank).

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