OTHER LAPSES AND RESPONSES
There were several other areas that the Auditor-General's Office (AGO) flagged in its report, which Aljunied-Hougang-Punggol East Town Council (AHPETC) responded to.
In some areas, the AGO and its auditing partner, PricewaterhouseCoopers Consulting, had further responses.
Lapses in management of sinking funds
AGO: This is meant to be a fund separately maintained from their operating fund accounts, used for the improvement and long-term maintenance of properties. AHPETC's transfers were late and short of the required amounts, and in most instances, "only made after auditors' queries".
AHPETC: At all times, the monies were still in the town council's bank accounts, but were left in the operating fund accounts rather than transferred into the sinking fund accounts. The town council will be more mindful about the sinking fund accounts and will use the account appropriately. Separately, it has rectified the mistake of paying for the Neighbourhood Renewal Programme out of the sinking fund when it is in fact an operating fund matter.
Lapses in arrears of service and conservancy (S&C) charges
AGO: There was no system to accurately monitor conservancy and service arrears.
AHPETC: It was hampered by a lack of historical data needed for an ageing analysis. Furthermore, since it did not have a system to generate the arrears, town council staff had to manually sort the information. A mistake during this process led to the town council reporting inflated figures in April 2013. The town council added it is in the process of improving its system.
Lapses in internal controls and procurement
AGO: The town council did not perform monthly bank reconciliations prescribed by the Town Councils Financial Rules; did not have adequate controls to safeguard valuables, receiving and handling of cheques; did not follow the Financial Rules in approval of procurement and did not segregate duties in the payment processes. Cheques received by AHPETC and not banked in by the end of the day were not kept under lock and key, and opening of mail that includes cheques, was done in an area accessible to the public.
AHPETC: Surprise checks were done at branch offices in FY 2013 and 2014. It has improved its controls, it added. For example, cheques not banked in by the end of the day were now kept in a safe and all cheques received are scanned by finance staff into a central server.
Inadequacies in management and accounting systems
AGO: The town council did not have an adequate management and accounting system and its statements for FY2012/13 did not accurately reflect the state of affairs.
AHPETC: Part of the reason was that it did not have an IT system that could keep track of things on a larger scale, and the system used for the Hougang SMC could not handle the volume of a GRC. It has since improved its system which can now receive payments in many modes, but is still a work in progress.