(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.