A follow-up to “Unsupporting You” – it’s worse than I thought

(I am interrupting my regular posting for this follow-up political post.)

I wrote a post called “Unsupporting You” on  25 February 2014 where I stated for the record that I was not supporting the Worker’s Party (WP) any longer, and my reasons for it. At that time, the Auditor General office (AGO) was directed by the Ministry of Finance to conduct an audit on the financial accounts of Aljunied Hougang Punggol East Town Council (AHPETC), at the request of the Ministry of National Development. (Note that the AGO was only asked to audit the 2012 accounts.)

To refresh our memory, the reason for the AGO stepping in was because the auditors appointed by WP couldn’t give an opinion on the financial statements. The latters found various issues in the 2012 accounts, more than what was discovered in 2011, and so the statements could not be signed off.

Now, one year later, the AGO finally released it’s report earlier this month. In it was listed five major lapses found during the audit: not transferring monies to sinking fund, poor internal control, no system to safeguard documents, inadequate oversight on related party transactions, and no system to monitor arrears.

Following the release, there was a parliamentary session to discuss the report. I won’t go into details of the report nor the discussions, because the information is available for all to read. Instead I want to put down my thoughts on the misconceptions and disingenuous references that are inferred from the findings, as well as the attitude of WP.

First of all, the AGO went in to conduct a financial audit, like what the WP’s auditors had done previously. But it was much more thorough, and that was why it took a year. (Usually an audit takes about a week to a few weeks.) The AGO did not conduct a forensic audit with the intent to investigate fraud. I am not sure if everybody understands how audit works, but basically the auditors will randomly select documents (or sampling) to verify the numbers in the financial accounts. In a forensic audit, which is done by specially trained auditors, it is a process of reviewing a company’s or person ‘s financial statements to determine if they are accurate and lawful. It involves tracking and collecting evidence since this is usually a matter of legal concern, and the evidence can be used in court.

It was therefore wrong to infer from the AGO report that there was no fraud detected, since it wasn’t the objective of the AGO to conduct an investigation in the first place. But one thing is sure, the appointed auditors and, subsequently, the AGO discovered there were missing documents that couldn’t verify the accounts of AHPETC. Together with other serous issues like lack of a system to monitor arrears of conservancy and service charges and others mentioned above, the AGO concluded that the financial statements cannot be regarded as accurate and reliable, and that it cannot ascertain if public funds have been properly accounted for. These are also the same reasons why the appointed auditors couldn’t provide an opinion on the statements. Basically they don’t know what the hell is going on with the finances. Now, don’t you think this conclusion is cause for concern?

A number of people don’t seem to think so, with one comment even suggested that WP could engage a better accountant. The thing is this is not even about better accounting process. It is about basic accounts management. A financial statement is a basic requirement of an organization that collects money for whatever reasons. It provides information on the financial activities within the firm. Even the mafia has documented accounts; otherwise how the hell would the boss know how much money is going in and out of the organization?

If AHPETC was a listed company, this would be a big scandal and it would have to stop trading on the exchange pending an investigation. In fact the shareholders would have rushed to the office immediately and demanded an explanation. For those who still don’t get it, it’s like your bank telling you that due to insufficient IT resources, it can’t give you a bank statement and it doesn’t know how much money you have in your account. Now, would you jump and scream bloody murder?

So please stop blaming the PAP for a lack of financial statements. This is internal accounting procedure, nobody is stopping AHPETC from keeping track of the money. Worse, how can documents go missing? How can there not be a proper system to keep track of who paid or not paid the service charges? Even a mom and pop shop would have proper records. Again, don’t blame the PAP for the town council not having the system in place, because nobody was stopping them from having one developed. Besides, the party secretary, LowThia Khiang, had a town council in place in Hougang for more than 20 years when he was the MP there, so he should know what are required. To me, there are only two possibilities for this mess: either the town council’s management is seriously crappy, or there is something fishy going on. Either scenarios don’t bode well for WP.

During the first year, when the auditors couldn’t certify the accounts, that should have raised alarm bell among the WP leadership. As MPs, they are like the board of directors of the town council, and they are responsible for the operations even though a management company is engaged to run it. They should have started an investigation or engaged a consultant to restructure the internal processes. Yet nothing was done, and the same issues were highlighted the following year by the auditors and more.

In parliament, Low Thia Khiang said WP would look into hiring a consultant to look into the matter. Why only now, after four years of accounting mess? And why did the town council only put in monies into the Sinking fund after the AGO questioned about it. And there was still a shortfall after it had done so. (I am not sure if AHPETC had since put in the remaining amount.) Then there are the related party transactions. The General Manager of the town council who approves of services and payments is also the same guy who owns the company that provides the services. Seriously???

AHPETC only makes up of one GRC and two small SMCs. Imagine if WP had taken over power as the government. If they can’t be bothered with the town council accounts, what more the byzantine accounts of the nation’s finances?

WP had accused PAP of not being transparent, and yet it has not been acting in a transparent manner either. And stop accusing the other side when your mistakes are being pointed out. Two wrongs don’t make a right!  But the supporters love to use this argument; as if this exonerates WP from the mistakes it made. If WP had apologized for the mess and vowed to reform the party and change the internal structure for the better, it would have earned the party respect. Instead, this mess makes them look evasive and suspicious.

During the parliamentary session, WP MPs were rather defiant. Pritam Singh had the audacity to remark that he would only answer to the residents of Aljunied GRC. Hello? The parliamentarians are representatives of the people. AHPETC doesn’t just received money from the residents there, but also public funding (dispensed by the Ministry of National Development) which comes from all tax payers. He answers to all of us!

At the conclusion of the parliamentary session, the minister from MND told WP MPs that AHPETC had to submit audited financial reports by June for the year of 2011 and 2012. So let’s see if WP will comply. The first thing they should do is to announce a forensic audit to retrieve the missing information in the accounts. At the moment, no one is saying there is fraud, but it doesn’t mean there is nothing wrong. WP is given a chance to rectify the situation.

Some people have challenged the government to call in the corruption investigation bureau or the Commercial investigation department. Unfortunately even though this is a legitimate action to take , particularly for listed companies and charity organizations, you have to be very sensitive when it comes to politics. And the weak Town Council act doesn’t help matter.

The National Solidarity Party (NSP) called for a depoliticizing of the town council. Initially I had thought MPs should not be responsible for it. But after this episode, it looks like this is actually a good test for the opposition MPs. It allows voters to judge the management skills of these MPs, how they handle obstacles, whether they observe corporate governance, the integrity and transparency of their systems. Running a GRC is a little like running Singapore, with far less complexity. This will test the MPs’ mettle as leaders.

I also want to touch on the lack of clear-thinking debate among the supporters of various parties. Very few rebut the points raised, and instead resort to personal attacks. Like WP supporters tend to accuse anyone criticizing WP as a PAP mole. When we are talking facts, let’s be rational. WP called for a first world parliament during the last election campaign, and in such parliament, there is check and balance. Since WP wants to check the PAP, then it has to be subjected to checks as well. Otherwise it is only a party of double standards.

As Singaporeans, we should be pro-Singapore and not blindly follow any party. If the government rolls out polices good for the country and people, then give credit to it. If there are mistakes made, we point them out. Same goes for the opposition parties. We should be looking for the best people to lead us, instead of looking for those who “appear less bad”. I do want opposition party in parliament to check on the government. But I disagree on supporting any opposition party for the sake of opposing the ruling PAP. We should give our votes to those who make effort to provide alternative policies. We may not agree with the proposals but they are a starting point for a debate.

Singaporeans must learn earn to be politically mature, analyze the facts and debate rationally on them. Though, honestly, I think this will only happen with the younger generations, who have gone through or are going through the analytical curriculum.

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13 thoughts on “A follow-up to “Unsupporting You” – it’s worse than I thought

  1. A good post, but unfortunately, given the current state of political discussion on the internet (where it’s almost a crime to support the incumbent), you will be branded a PAP mole, PAP lapdog etc. Worse still, the lunatic fringe will mark you out for future harassment because you have dared to oppose them. So much for a mature society!

    • Hi there,

      Thank you for your comment. Yes, absolutely agree with you. It’s unfortunate the extremists have taken over the internet. It’s partly the fault of the ruling government, which sucks at communicating to the common people, leaving a vacuum for the extremists to take over. Unlike the pioneer leaders who were rather transparent in their actions (remember the public debate on building the SMRT, the public inquiry into the collapse of Hotel New World), the current leaders are still adopting a “I know what I am doing and I don’t have to report to you” attitude to the people. They need to be confident in their positions if they truly believe in what they do, and learn the skill of persuasion. They have to take a leaf from the pioneer leaders.

  2. Thank you for being fair and rational in your comments.

    Far too many opposition supporters scream conspiracy and refuse to see the gross mistakes WP made in this. They are so filled with hatred with PAP that they cannot see the truth for what it is and they have the gall to call more rational people names like PAP stooge, dog, etc.

    For sure PAP made serious mist-steps, especially in the past several years until 2011 when it began to loose some of its deafness to the growing cries and pains of Singapore, compelled on the party no doubt because of their loss of the Aljunied GRC and drop of support among voters. But if we want to be responsible citizens as most of the opposition supporters claim they are, then they / all of us should judge each political party for what it really is and not just on words and rhetoric. .

    • Thank you for your comment. You have hit the nail on the head. Many vocal opposition supporters are like the religious extremists, it’s their way or the high way. But their way is illogical, and they don’t seem to understand rational arguments. Worse is that the opposition party/parties are not helping matters, and may be manipulating the supporters.
      I am not a supporter of the PAP, but it looks to me that we don’t have any credible alternatives who can take over. I have since realized that this country (despite its ultra small size) is so complex that you really need highly competent people to run it. Put in any lesser team, we are seriously doomed.

  3. While it is true with some points you’ve made, it does raise some questions I have when I started reading around other websites with regards to this saga.

    Firstly, no one is above the law. If AHPETC have embezzled the money, hence “fraud”, why didn’t the AGO go ahead and state that. Then it would be a Criminal offense and police would have to step in, right? Mr Shanmugam as a lawyer would know which law was broken(if there is) since he’s a lawyer but he did state that in the House, which brings to conclude that all this is just a charade to play down the WP.

    Secondly, I must state for the record I wouldn’t want WP to take over the Government too and I feel many educated Singaporean would agree with me, at least for now. But ever since they took over a GRC, the incumbent party suddenly started to wake up and drastic measure for Housing ballooning was curb, tightening of Foreign workers, taking care of the pioneer generation (aging population)….etc started to come to light after the last election. I must say, this is not entirely the work of WP but rather a LOST of GRC which was all this while being control by the incumbent party. They lost at their own game and started to see how the people actually feel.

    Thirdly, AGO found even bigger questionable amount (in billions) in other government offices/stat board but why was it not brought out for discussion? You mentioned it takes a week or few to do an audit but the AHPETC case they need a year “to be thourough”? OR a year so that they can bring out AHPETC issue at the right time and blanket the “billion” dollar issues?

    There are bigger issues than AHPETC and it needs to be address. This saga IMO was just a convenient topic to cover what should have been discussed so that the people can talk about the opposition problems than what was really brewing behind.

    Honestly, I don’t care about WP, NSP, SDP….etc, I want more opposition’s voice to pressure the Elite to answer. I don’t need any minister to Harakiri (else the cabinet would be almost empty) but want a honest minister to just admit and say “sorry for blowing the budget” and let’s cut the bullshit and make Singapore a really world class country.

    Finally, the job of any minister in the world is suppose to serve the community at large. Making decision that could benefit the current and future generations. They don’t always make the right decisions all the time but then again, that’s why there are other parties to disposition themselves from the decision makers and see it from another angle.

    Just my 2 cents.

    • Thank you for your comment.

      1) I have already stated in my post that the AGO did not conduct a forensic audit. I understand that they did not check all the items, but the general processes. So of course the AGO couldn’t state there was fraud, especially when they have no evidence. But they found serious lapses, including documents missing. Because of these, they don’t know if the accounts are accurate. Which is why the important next step is to bring in forensic auditors to investigate the accounts. WP is now given the chance to provide an audited report by June.

      2) Also stated in my post, I want opposition party in parliament to check on the incumbent. However I don’t want an opposition MP who is taking $15,000 a month to be a social councilor and durian tour guide. I expect him/her to vet closely the policies and budget tabled by the government, on behalf of the people.

      3) Are you saying that AGO found billion dollar losses in accounts of Stat boards and government agencies, and these were not discussed in Parliament? Can you provide information as to which government agencies and when these happened. More importantly what did the AGO state in terms of the circumstances in which such losses happen. Did the AGO flag that the accounts were suspicious and unreliable?

      2)

      • James,

        The AGO conducted audit on the government finances and various related entities. We are talking about a huge organization here, and lapses are nothing to be surprised about. Besides, with the AGO bringing this up in the report, the relevant entity has to take action to comply with guidelines or take disciplinary action. Because of this, it is not necesary to bring up all the lapses in parliament. But in the case of AHPETC, the Town council act is too weak to compel WP to act. So this has to be brought up for discussion in parliament. This is the only way to force WP to give an explanation.

      • @James yes there were lapses by the ministries but the difference is that they did not go “oh it’s not our fault and we don’t have to answer to you”

  4. It will b interesting if AGO can also conduct audit to the rest of the tc. Then we will b able to compare Apple to Apple.

    Thanks for sharing your thoughts

    • Thank you for your comment.

      The AGO was only called in because the appointed auditors of WP couldn’t provide an opinion on the accounts and so couldn’t sign off on the statements. The other town councils were able to submit audited reports, so it would be a waste of the AGO’s resources to conduct another audit when there is no cause for it.

      • I’m not pro any political parties but merely expressing what I have witnessed in current times.

        If the ruling party is truly concerned about the well-being of our population (opposition ward or not), why would it then leave the opposition party in the lurch and removed all reporting software, facilities? Wasn’t this system paid for by the tax-payers monies?

        Also if they want to spill the beans, we should have more transparencies on the transition between CPG to the in-coming MA. This is still something covert. Why are tenders collected and not submitted?

        Don’t we all have baby steps? Surely some fumble as we learn to walk or run. Everyone deserves a chance to learn and adapt. It’s so sad to see AHPETC holding the “smoking gun” and receiving all kinds of damning remarks from the other fence, waiting to take turns to hurl “unlawful” (used too many times) remarks. I’m not religious but this phrase came to mind, “He who is without sin among you, let him be the first to throw a stone at her.”

        Isn’t it the responsibilities of the prosecution to prove the guilt, rather than the defense to prove its innocence? Surely all of us are interested to know the truth rather than looking at circumstantial evidences. Isn’t this slender?

        It’s just a way of saying, “if you vote the other way, this will be your consequence(s)”

      • Thank you for your comment.

        1) I understand that WP terminated the contract of the management company (CP) appointed by the previous PAP MPs. This despite CP still had 2 years left in the contract. So naturally CP removed their softwares from the PCs within the office, since they were no longer being employed.
        I think we should also asked why WP terminated the contract upon taking over the GRC. Wouldn’t CP be the perfect scapegoat if anything went wrong?
        2) You fall under the group of people, whom I mentioned in my post, of those who are dismissive of accounts mismanagement. Having documents missing are not fumbles we can dismiss. Why don’t you ask your company accountant if there is a missing invoice, can he or she be dismissive about it to the auditors? Please, also note that the accountants and the management company are appointed by WP, not from PAP. Keeping track of the accouts including documents is basic and important. I also want to bring up the Sinking fund again. This is not the first time WP got a seat in parliament. Low Thia Khiang has been an MP for a couple of decades at least. So he should know the minimum requirements to run a town council. So how come there was no timely deposit of monies into sinking fund until the AGO questioned about it?
        3) you quoted from a religious phrase. Using your logic, the judges are also not qualified for their jobs because they are sinners too. So we might as well do away with the justice system because no one is perfect. I’m fact the only people qualified to be elected as judges or MPs are Jesus Christ, Buddha, and Prophet Mohamed etc. There are religious principles and there are earthly laws. Please don’t confuse the two.
        3) There is no prosecution here, we are not talking about a court case. So why is there a need to prove guilt? We are just talking facts, based on the findings of the AGO. We are talking serious lapses, which are acknowledged by WP.

        Lastly, I also want to point out that politics is a dirty game. Sabotaging and backstabbing are par for the course. In fact if you look at the American political scene, it’s literally a pit of snakes, sharks and alligators. Anybody entering politics should be ready to get his/her hands dirty. Like what Hillary Clinton said, “if you can’t take the heat, get out of the kitchen.” There is no place for religious quotes here unless, of course, you are using religion for political gain or consolidate power.

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