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Hougang MP Png Eng Huat Suggests Foul Play in the Audit during PAP’s Handover of AHTC

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Taking to Facebook, Workers’ Party MP for Hougang SMC, Png Eng Huat suggested that there could be foul play involved in the audit of Aljunied-Hougang Town Council’s records during the handover from the PAP to the WP.

Said Png:

“After WP won Aljunied GRC in GE2011, the outgoing PAP-run Aljunied Town Council (ATC) appointed an interim auditor, Mazars LLP (Mazars), to audit the 4-month handover period of 1 Apr 2011 to 31 Jul 2011. ATC was previously audited by Foo Kon Tan Grant Thornton LLP (FKT) prior to GE2011. Mazars gave the 4-month FS an unqualified opinion.

When WP took control of ATC on 1 Aug 2011, FKT was reappointed as auditor for the newly constituted AHTC for continuity reason. FKT qualified WP’s first year of managing a GRC with 4 audit points, one of which was on the ‘opening balance’.

FKT said they were not allowed access to Mazars’ audit papers for the handover period and “were also not able to obtain the supporting accounting documents from the previous managing agent of ATC prior to reconstitution”. Thus, FKT said it cannot determine whether the accounts and FS for the period were fairly stated.

FKT qualified this point again in FY2012 with no mention of the 4-month handover period. Subsequent auditors picked this up as a full year qualification and qualified AHTC on this point every year until now.

Was FKT really not allowed to review the work papers of Mazars in 2012?”

Png added that when the Auditor-General’s Office was directed to audit AHTC (aka AHPETC) in 2014, it found that FKT could not show any documentary evidence it was not allowed access to the audit work papers of Mazars.

“FKT said it made an attempt on 16 Oct 2012 to contact Mazars, but did not receive a response or do any follow up as well. Mazars, on the other hand, told AGO it did not receive FKT’s letter. See extract of the AGO report attached (image below).

I had asked AGO and KPMG how is this audit point the fault of WP-run AHTC? FKT was the auditor BEFORE and AFTER the unqualified 4-month handover period, of which the PAP-appointed CPG was still the MA.”

Png ended his post with strong words of condemnation for FKT:

“I wonder how these people at FKT sleep at night? I can only say, shame on them!”

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This is Png’s Facebook post, reproduced in full:

“The Financial Statement (FS) for AHTC for FY2017 was presented to Parliament today. The last of the legacy audit issues, the opening balance qualification, is finally removed after 7 years.

This qualification prompted HDB to issue a swift reminder to AHTC that all was not over yet, within 24 hours after KPMG reported that all audit points in AHTC were resolved in Feb 2018. Now that it is removed, HDB did not say anything about it but instead highlighted that AHTC is the only town council with a qualified financial statement, giving an incomplete explanation to boot.

So what is the story behind this opening balance qualification which was recorded in the financial statements of AHTC for the past 7 years?

After WP won Aljunied GRC in GE2011, the outgoing PAP-run Aljunied Town Council (ATC) appointed an interim auditor, Mazars LLP (Mazars), to audit the 4-month handover period of 1 Apr 2011 to 31 Jul 2011. ATC was previously audited by Foo Kon Tan Grant Thornton LLP (FKT) prior to GE2011. Mazars gave the 4-month FS an unqualified opinion.

When WP took control of ATC on 1 Aug 2011, FKT was reappointed as auditor for the newly constituted AHTC for continuity reason. FKT qualified WP’s first year of managing a GRC with 4 audit points, one of which was on the ‘opening balance’.

FKT said they were not allowed access to Mazars’ audit papers for the handover period and “were also not able to obtain the supporting accounting documents from the previous managing agent of ATC prior to reconstitution”. Thus, FKT said it cannot determine whether the accounts and FS for the period were fairly stated.

FKT qualified this point again in FY2012 with no mention of the 4-month handover period. Subsequent auditors picked this up as a full year qualification and qualified AHTC on this point every year until now.

Was FKT really not allowed to review the work papers of Mazars in 2012?

When AGO was directed to audit AHTC (aka AHPETC) in 2014, it found that FKT could not show any documentary evidence it was not allowed access to the audit work papers of Mazars. FKT said it made an attempt on 16 Oct 2012 to contact Mazars, but did not receive a response or do any follow up as well. Mazars, on the other hand, told AGO it did not receive FKT’s letter. See extract of the AGO report attached.

I had asked AGO and KPMG how is this audit point the fault of WP-run AHTC? FKT was the auditor BEFORE and AFTER the unqualified 4-month handover period, of which the PAP-appointed CPG was still the MA.

I wonder how these people at FKT sleep at night? I can only say, shame on them!”

 

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