The seemingly never-ending story between Workers' Party (WP) and the Ministry of National Development (MND) over the former's town council management issues rumbles on, with no clear end in sight.

But as new information that could potentially incriminate some WP town councillors is revealed by accounting firm PwC, it could well build up to a long-awaited political showdown between WP and the governing party.

The context

Yes, it's been quite a while, in fact, more than three years since the whole story unfolded.

It all started in February 2014, with the now-defunct Aljunied-Hougang-Punggol East Town Council's (AHPETC) own auditors not being able to give its accounts a clean bill of health for two consecutive years.

Then Deputy Prime Minister and Finance Minister Tharman Shanmugaratnam directed the Auditor-General to conduct an audit of the accounts of AHPETC, whose report was made public in February 2015.

The Auditor-General's Office (AGO) report had concluded that "there is no assurance that council's accounts are accurate and reliable, or that public funds are properly managed".

It highlighted lapses in financial management by the town council, which included non-compliance with the Singapore Financial Reporting Standards, which require a reporting entity to disclose related party transactions in its financial statements.

AHPETC was criticised for not making adequate disclosures about dealings with its managing agent, FM Solutions and Services (FMSS), and another contractor FM Solutions and Integrated Services (FMIS). The shareholders in both, a husband-and-wife team who are long-time WP supporters, were also senior town council officers.

Latest developments

Fast forward almost three years three months later, reports in The Straits Times and Today quoted PwC as saying that the circumstances surrounding the set-up of FMSS, and its appointment as managing agent of the AHPETC are “tainted”, putting "the propriety of all payments made under two MA contracts to FMSS into question (totalling over S$22 million)."

The report by the accounting firm, which was brought in by the ruling People's Action Party (PAP) Pasir Ris-Punggol Town Council (PRPTC) to review past payments made by AHPETC while the Workers’ Party was managing Punggol East constituency from 2013 to 2015, also said that the money the town council could have saved and the payments made in some instances without proper supporting documents, add up to a total of at least S$506,562.06.

It said "the circumstances may warrant further investigations by the relevant authorities as to the relevant potential offences".

The government's response

PwC's findings may well be the smoking gun that the government had been looking for.

In a press release commenting on the report, MND said that the latest findings from PwC about AHPETC "reinforce our concerns regarding how public funds under the Town Council’s charge had been managed."

"The report also raised the possibility of civil and criminal liabilities, and highlighted the need for further investigations as to the relevant potential offences."

"HDB will forward the PwC report to the Independent Panel that was appointed by Aljunied-Hougang Town Council in February 2017, so that it can consider what recovery and legal actions are necessary and appropriate."

How will WP respond?

Battered and bruised by the ongoing scrutiny, Aljunied-Hougang Town Council (AHTC) told the media that it would study the PwC report, without making further comments

But what it said in the Parliament debate on the AGO report in February 2015, may give some clues to how it will defend its actions.

It is perhaps also useful to read Workers' Party secretary-general Low Thia Khiang's speech on the issue, where he had said:

"The fact remains that it has been a challenge for the Workers' Party, being an opposition party, to attract managing agents. When the public tender was called in 2012, three companies collected the tender document and only one company submitted the tender...

But the problems of professional town management and compliance with financial rules will remain a real challenge if there are no established managing agents who are prepared to do the job.

It would seem that managing agents serving PAP town councils are unwilling to serve as managing agents in non-PAP town councils, and that the reason appears to be political rather than professional. It looks like the only option for any opposition party is to take over the direct management...

Direct management means newly elected MPs will have to start from scratch to recruit and train staff to be familiar with HDB estate management to start taking over management of the town within 90 days as required under the Town Councils Act and, at the same time, to look for accounting software to transfer the account into the new system and pray that the system will work.

If you're not able to do all these at the same time, you'll be labelled as incompetent."

Then Law Minister K. Shanmugam had argued that the WP was "playing the victim card", as ""The Town Councils Act provides for continuity. There was no need to start from scratch. But it was up to the WP whether they wanted to let CPG go."

Ascertaining whoever is the oppressor or victim is not the objective of any investigation. But what is certain is that things are hotting up, and with so much public and political interest at stake, both sides will strive to seek vindication, not only in the legal sense, but also in the court of public opinion.

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