The Damning Report from KPMG: 4th Progress Report

For as long as anyone can remember, the accounts at Workers' Party-run town council has been in a mess. But now we discover that it is in fact in a much bigger mess that we thought based on the latest KPMG report.

AND YET, Pritam Singh is still NOW telling people that his town council will award the contract for a new Town Council Accounting System "shortly".

Can you imagine that?! They still have not put in place a credible accounting system!! They didn't get down to work after the special audit by AGO?

Where is their accountability and sense of responsibility? And honesty?

"PERVASIVE" was the word KPMG used to describe the lapses.

In addition to the 115 control failures identified by the special audit carried out by AGO, KPMG has identified another 70 control failures!

And KPMG concluded that unless its town councillors and senior management “set the right tone at the top”, and clearly define the standard of competence and accountability it expects from employees, the lapses could not be fully remedied.

It starts with the leadership at the top.

 “Highly irregular” methods were used to process over $60 million worth of payments.

That's not a small amount. 

AHTC also extensively used manual journal entries to record payments to third parties. There were over 48,500 such manual entries involving more than $60 million from 2011 to last year. This avoids records being entered into accounts payable, thus circumventing financial controls.

Temporary clearing accounts  

There are 18 temporary clearing accounts used for more than one million transactions were not cleared swiftly. Why do they need so many temporary clearing accounts?

Dummy Vendor Code 

 

Look, we are not dummies.

After the special audit by AGO that identified over 100 control failures, instead of introducing measures that eliminate those failures, AHTC introduced a dummy vendor code in 2015 that resulted in another control failure.

Should we say, "Well done, Workers' Party"?

The use of this dummy code meant duplicate or fictitious payments could be made without being detected.

In its conclusions, KPMG noted that that the town council’s lapses could not be fully remedied unless its town councillors and senior management “set the right tone at the top”, and clearly define the standard of competence and accountability it expects from employees.

“The Control Failures are pervasive, cutting across the key areas of governance, financial control, financial reporting, procurement and records management over the course of five years,” the audit firm said in its report.

 “We are of the view that there is an issue larger than the sum of individual lapses and that these Control Failures point to a failure in AHTC’s control environment.”

Can the leaders at the top set the right tone? That is a big question.

How much do you trust Sylvia Lim, the Chairman of Workers' Party and co-chairman of their town council?

Sylvia Lim has been caught lying - without batting an eyelid - more than once. She lied to voters. She lied to reporters. She lied in Parliament. She has been described as a liar by Justice Quentin Loh.

Did it bother her? No. 

What about the current chairman of the town council, Pritam Singh? Can he set the right tone at the top? 

There's one thing we can learn from Pritam Singh and that is the art of making himself look good. 

After mounting great resistance to MND's quest to appoint independent accountants to look into ALL past payments made by AHPETC, and after haggling much over the choice of accountants and having lost every argument and having to choose one of the Big Four as independent accountants - and the choice fell on KPMG - Pritam Singh said in a media release that AHTC had instructed KPMG to identify all transactions made to FMSS and FMSI … and to flag out any payment(s) deemed improper.

Really? AHTC instructed KPMG? KPMG would be doing that anyway, with or without that instruction. That's KPMG's mission.

Oh, but didn't Sylvia Lim argue in Parliament last year (February) that payments made according to contracts are not over-payment? Nothing improper according to Sylvia Lim. Looks like Sylvia Lim was wrong after all. Tsk tsk!

But if Pritam Singh is serious about straightening the mess at AHTC, why did he refuse to share documents with PwC, the independent accountant for Punggol East? 

He even sought to use the Court to avoid this sharing of documents by claiming duplication of work. He probably hoped the Court would agree with him so that he needn't share any documents with the accountants of Punggol East.

 "AHTC is of the position that two accounting firms – appointed by two different town councils – are effectively duplicating each other’s work and funded by public purse in reviewing the accounts of Punggol East ward," Pritam Singh said in Court.

How interesting!

Pritam Singh is complaining of a situation created by AHTC.

They created this situation where work is duplicated and unnecessary costs incurred because they rejected HDB's advice to jointly appoint accountant.

They created this situation when they rejected PRPTC's proposal to jointly appoint KPMG.

AHTC also refused to attend meetings the HDB had called to coordinate the work of the two accountants. 


After hearing arguments, CJ Menon said KPMG and PwC (accountants for Punggol East) should communicate directly with each other and "afford each other such access as may be reasonably required to safeguard each party’s interests".

In short, they will by-pass AHTC in their communication. AHTC is a hindrance to their work.



How about Png Eng Huat then? He is a co-chairman of the town council. 

The story of the very bad durians tells us that this man cannot rise above petty politics and lies. Can he set the right tone at the top? Obviously not!

You can read the story here: http://wpinreview.blogspot.sg/2016/07/the-story-of-very-bad-durians-look-whos.html

Like Minister Shanmugam said in his response to the latest KPMG's report, the rot is at the top and we are not surprised!