Pic: SNM
KPMG’s damning Report on AHTC, millions not properly accounted for, KPMG questions integrity and ethics of AHTC
By Home Affairs and Law Minister K Shanmugam, via Facebook Post 23 Jul.
The latest monthly progress report on Aljunied-Hougang Town Council (AHTC) issued by KPMG paints a devastating account of the Workers’ Party’s mis-management of its town council. It is a damning litany of highly irregular and suspicious financial practices, poor governance structures and extensive leadership failures.
KPMG, AHTC’s own independent accountants, has uncovered even more faults than the Auditor-General’s Office (AGO) and AHTC’s statutory auditors. AGO and AHTC’s statutory auditors found 115 failures. KPMG uncovered another 70 – making a total of 185 failures. Since the AGO audit, the situation has not gotten better. It has gotten far worse.
KPMG says:
• AHTC’s “control failures,” were “pervasive, cutting across the key areas of governance, financial control, financial reporting, procurement and records management over the course of five years.”
• There was no “culture of compliance to controls”.
• “There was no ….…enforcement of integrity and ethical values,”
KPMG’s Report underlines the key issue:
AHTC’s leadership has neither upheld nor enforced integrity and ethical values. The rot is at the top. This should come as no surprise. The High Court and the Court of Appeal have already criticised Ms Sylvia Lim and Mr Pritam Singh for suppressing the truth (designed to mislead) both in Parliament and in Court. To them, the truth is a tradable commodity. I will say more about this in another post.
KPMG also found that AHTC’s lapses were not isolated, but rather “pervasive” and “systemic”:
“There is an issue larger than the sum of individual lapses at AHTC”, it says, “a failure in the control environment”, which “includes the governance and management functions and the attitudes, awareness and actions of those charged with governance and management”.
KPMG said that AHTC used highly irregular shortcuts to process millions of dollars in payments to related parties, and “suppliers”. It used “dummy” vendor codes for payments, without specifying who the suppliers were. These practices could have concealed duplicate or fraudulent payments. Obviously, WP’s leadership thought they could play Aljunied residents – and Singaporeans -- for dummies.
Despite auditors flagging concerns over four years – including the AGO itself – AHTC’s Finance & Investment Committee and Audit Committee were not bothered. They didn’t even meet regularly to deal with the issues.
The attitude of AHTC in dealing with its severe problems is quite telling. In response to KPMG’s report, Mr Pritam Singh breezily says: “AHTC accepts all the recommendations in full”.
That’s it. He seems to think that suffices. No need for apologies, explanations, clarifications.
He does not explain why AHTC indulged in “highly irregular” practices. He does not explain why there was “failure in (its) control environment”. He doesn’t apologise for the mess, nor account for the “attitudes, awareness and actions of those charged with governance and management” – i.e., AHTC’s political leadership, WP’s six MPs. Is he himself (having already misled the Court of Appeal) in a position to enforce ethical values?
Mr Singh’s attitude is consistent with what KPMG in essence said about them: That AHTC’s management has not acted responsibly in dealing with its failings. Where is their sense of responsibility to put things right? Where is their sense of duty, honour and integrity?
They went to court to oppose, tooth and nail, the appointment of an independent accountant. We know now why: They don’t want any light shone into their dark corners, of which there are many. This is another subject I will deal with in another post.
Mr Singh and his colleagues can’t keep Singaporeans in the dark so easily.
We are still at the early stages in this painful saga. So far KPMG has only looked at the control environment and accounting systems and so on. The Court of Appeal had also directed that the accountants to look into the actual payments that AHTC has made over the years, identify their lawfulness, and where necessary, take steps to recover the payments.
Much work remains to be done. More facts will emerge, facts which will show what actually happened to the monies, and what the WP has been up to in Aljunied, Hougang, and for two years Punggol East.
That’s it. He seems to think that suffices. No need for apologies, explanations, clarifications.
He does not explain why AHTC indulged in “highly irregular” practices. He does not explain why there was “failure in (its) control environment”. He doesn’t apologise for the mess, nor account for the “attitudes, awareness and actions of those charged with governance and management” – i.e., AHTC’s political leadership, WP’s six MPs. Is he himself (having already misled the Court of Appeal) in a position to enforce ethical values?
Mr Singh’s attitude is consistent with what KPMG in essence said about them: That AHTC’s management has not acted responsibly in dealing with its failings. Where is their sense of responsibility to put things right? Where is their sense of duty, honour and integrity?
They went to court to oppose, tooth and nail, the appointment of an independent accountant. We know now why: They don’t want any light shone into their dark corners, of which there are many. This is another subject I will deal with in another post.
Mr Singh and his colleagues can’t keep Singaporeans in the dark so easily.
• Many of the problems KPMG identified deal with payments -- running into millions of dollars -- which have already been made. What is Mr Singh and his colleagues going to do about them?
• Who received the payments and for what purpose? How many of them were genuine? Who amongst your friends benefitted? Why did you use dummy codes for payments – i.e. who really received the payments?
• For four years, your auditors have been asking for supporting documents. Are you finally going to produce them, or admit that they do not exist?
We are still at the early stages in this painful saga. So far KPMG has only looked at the control environment and accounting systems and so on. The Court of Appeal had also directed that the accountants to look into the actual payments that AHTC has made over the years, identify their lawfulness, and where necessary, take steps to recover the payments.
Much work remains to be done. More facts will emerge, facts which will show what actually happened to the monies, and what the WP has been up to in Aljunied, Hougang, and for two years Punggol East.
DTCL: Emphasis in article is mine.
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