MND refutes Ex-WP NCMP Yee Jenn Jong’s remarks on AHTC saga with POFMA order

SINGAPORE:  On Monday (26 August), Desmond Lee, Minister for National Development, instructed the POFMA Office to issue a Correction Direction under the Protection from Online Falsehoods and Manipulation Act 2019 (POFMA) to former Non-Constituency Member of Parliament (NCMP) Yee Jenn Jong, concerning his Facebook posts on 25 and 27 July 2024.

MND alleged that the former NCMP from the Workers’ Party (WP) made “false and misleading statements” about the ministry’s basis and motivation for actions during Aljunied-Hougang Town Council (AHTC) saga, which embroiled in long-standing legal disputes that were finally resolved through mediation last month.

MND disputed Mr Yee’s claim that MND was “wrong to call in external auditors” due to Action Information Management Pte Ltd (AIM)’s termination of the Town Council Management System (TCMS), asserting that such a termination did not cause AHTC’s reporting failures.

MND also criticised Mr Yee’s suggestion that MND’s decisions to withhold grants, engage external auditors, and appoint an Independent Panel were “politically motivated” rather than based on legitimate concerns.

The ministry defended its actions as necessary to safeguard public funds, given the serious deficiencies in AHTC’s financial governance identified by various audits.

Mr Yee has since complied with the POFMA order.

In his original 25 July post, Mr Yee mentioned that AHTC developed alternative TCMS software during the saga and suggested that such matters should not be politicised, emphasizing that residents’ welfare should be prioritized regardless of their voting choices.

In the Monday statement, MND explained that they called for further audit checks by the Auditor General’s Office (AGO) in 2014 and KPMG in 2016, because AHTC’s own auditors at the time, Foo Kon Tan Grant Thornton, had “flagged numerous issues with AHTC’s financial and accounting systems, raising serious questions about whether public funds in AHTC were properly applied.”

“MND therefore had legitimate and sufficient basis to call in the external auditors, ” the statement wrote.

“A substantial portion of TC funds are public funds. TC funds include the Service & Conservancy Charges (S&CC) collected from residents by the TCs and the S&CC Operating Grants disbursed by MND to the TCs.”

MND clarified that AHTC’s auditors had submitted a disclaimer of opinion for AHTC’s Financial Statements for two consecutive years – FY2011/12 and FY2012/13. Such disclaimers of opinion by auditors are highly unusual and serious matters.

“In this case, the disclaimer meant that AHTC’s own auditors could not say that the financial statements were a true and fair account of AHTC’s financial position.”

MND said Foo Kon Tan Grant Thornton identified significant lapses in AHTC’s financial practices, including the failure to transfer S&CC funds to the Sinking Fund and the inability to verify over $20 million in financial statements.

Consequently, a special audit by the AGO in February 2014 revealed further governance and compliance issues, raising concerns about the reliability of AHTC’s accounts and the proper use of public funds.

MND said AHTC then appointed KPMG as its Independent Accountants (IAs) to identify AHTC’s non-compliances with the TCA, advise the TC on appropriate remedial steps, and establish whether any past payments made by the TC were improper and ought to be recovered.

“This was pursuant to a ruling by the Court of Appeal in May 2015, made in response to MND’s application to Court for IAs to be appointed. ”

MND also viewed Mr Yee’s remark as insinuating that MND placed excessive and unnecessary pressure on AHTC paints a misleading picture.

AIM’s Termination of TCMS Contract Not to Blame for All TC Weaknesses, MND Asserts

“Contrary to Mr Yee’s claims, there is no reasonable basis to suggest that AIM’s termination of the TCMS contract on insufficient notice or handover issues had caused all the TC’s process and system weaknesses.”

MND said KPMG found that AHTC’s lapses were primarily due to inherent issues within its governance, accounting practices, and financial management, rather than the termination of the TCMS or handover issues in 2011.

These control failures were pervasive and persisted over several years, with many issues still unresolved as of 2016.