Sound system of checks in place in the public sector: Tharman

Lapses found in the govt's books are fixed, and no attempt is made at cover-up, even if the errant are senior officials

By

Lee U-Wenleeuwen@sph.com.sg@LeeUwenBT

Mr Tharman said the lapses found in the Workers Party-run AHPETC struck him as "fairly serious".

AUG 18, 20155:50 AM

Singapore

THERE is a "sound system" of checks and balances in place in Singapore's public sector to ensure that public funds are fully accounted for, and this is why it is regarded as one of the cleanest and most reputable administrations in the world, said Deputy Prime Minister Tharman Shanmugaratnam. He gave this assurance to Parliament on Monday as the House discussed the latest annual report from the Auditor-General's Office (AGO), which was made public last month.

Mr Tharman, who is also Finance Minister, said that the report for the 2014/15 financial year did not affect the AGO's opinion of the government's financial statements.

The report highlighted lapses in complying with the rules and procedures which the government imposes on itself to ensure proper conduct.

But, as in previous years, the AGO gave an "unmodified" audit opinion, meaning that the accounts of ministries, departments and organs of state are properly accounted for. The same is true for statutory boards, all of which received an unmodified audit opinion from their respective auditors for FY2014/15.

All the agencies take prompt action on lapses flagged by the AGO report and don't try to cover them up, said Mr Tharman. When there is suspicion of fraud or corruption, the investigations are thorough and errant officers face the "full measure" of the law, regardless of seniority.

"Public officers and agencies know they have a responsibility to safeguard the use of public funds. Internal controls are in place within each agency, audits by an impartial AGO are carried out regularly and rigorously, and the AGO's findings are made public," he added.

All the agencies cited in the report have conducted their respective investigations into the lapses. Mr Tharman stressed that, apart from one finding regarding an agency's procurement of event-management services, there were no repeat lapses.

He later made comparisons to the financial lapses uncovered by the AGO in the Workers' Party-run Aljunied-Hougang-Punggol East Town Council (AHPETC). "The AGO gave an unmodified opinion of the government's audit statements, unlike on AHPETC," he said, noting that both AHPETC's own auditors and the AGO could not certify whether the town council's funds were safeguarded and properly used.

"The whole house of AHPETC's finances is unsafe, with many structural defects," said the minister, adding that the issue was not something to be "whitewashed". "When the house is structurally unsafe, one doesn't just go put a new coat of paint on the front walls. It needs a very hard look. The foundations need to be put in place. It's hard work but you've had a lot of time to do so."

Earlier, Aljunied MP and AHPETC chairman Sylvia Lim had pointed out that the town council has already filed a subsequent audited account for FY2013/14 on June 30. As at Monday, only three of the 13 disclaimers raised by the town council's previous auditors remained unresolved.

"Is DPM not aware that this recent audit that we did for FY2013/14, our auditors actually made the observation that, except for certain specific issues, the town council has complied with the Act in terms of keeping proper accounts and books?" she asked.

Mr Tharman replied that the AHPETC accounts were submitted very late to the Ministry of National Development (MND). They were produced by new auditors, who flagged eight areas of concern involving non-compliance with legal and regulatory requirements. He also noted that the examples given on the areas the auditor has qualified struck him as "fairly serious" in his role as finance minister.

In a separate statement, AHPETC took issue with what Mr Tharman had said about the way it managed its accounts. He said: "Even if you take into account MND's grant which MND is willing to discuss with you, and you have part of the MND grant that has to properly go into the sinking fund and another part which goes into the operating fund, the amount that is owed to sinking fund from the operating fund will not be solved by MND's grant."

MND has withheld an operating grant of S$7.2 million, and AHPETC said that it would "more than fulfil" its obligations to transfer sinking funds for FY2014/15 if MND acceded to its request to deposit the entire grant into the town council's sinking fund.

Rebutting this, both MND and the finance ministry said that AHPETC had not provided the full picture as it chose to only focus on FY2014/15.

On top of the outstanding amount from FY2014/15, they said, AHPETC also owed sinking funds of S$4.5 million overdue since July 31 this year. Another S$4.5 million will be due each quarter by October 2015, January 2016 and April 2016 respectively, totalling S$18 million.

"MND is prepared to disburse the S&CC grants in full to AHPETC and to accede to its unusual request for the full sums to be paid into its Sinking Fund account, rather than be split between its Sinking Fund and Operating Fund accounts in line with the Town Councils Act and Financial Rules," said the joint MOF-MND statement.

"MND has asked AHPETC for its latest cash flow position, to assess the impact of AHPETC's proposal on its cash flow position and its ability to sustain essential services to residents. MND made the offer of a half grant on Oct 7, 2014 and the full grant on May 2, Jun 15 and Aug 6 (this year). But MND never heard back from AHPETC."

    

US dollar heads higher helped by housing sector sentiment  

The dollar headed higher Monday, notching its third straight gain versus the euro, helped by improving confidence in the US housing sector.

PHOTO: AFP

AUG 18, 20157:01 AM

[NEW YORK] The dollar headed higher Monday, notching its third straight gain versus the euro, helped by improving confidence in the US housing sector.

The greenback rose to US$1.1078 per euro, and to 124.41 yen, the latter hit only slightly by Monday's data showing that the Japanese economy contracted 0.4 per cent in the second quarter.

The dollar, which also improved to US$1.5586 per pound, gained strength as the construction sentiment index of the US National Association of Home Builders rose to a new high since the recession ended in 2009.

In addition, the separate Empire State Manufacturing Survey, covering business in the New York area, showed an improvement in medium-term expectations for the economy even if the views of current conditions fell.

"With Europe essentially flat-lining and Asia now experiencing negative year-over-year growth, the US remains the only region in the world that shows any growth at all," said Boris Schlossberg of BK Asset Management.

The Chinese yuan remained in a holding pattern at about 6.3949 per dollar, virtually unchanged from Thursday, after the August 10 shock devaluation and the Bank of China's announcement it was loosening its controls on the currency's trading range.

AFP

      

Update: Several foreigners among 27 dead in Bangkok blast, according to local TV

A bomb exploded outside a religious shrine in central Bangkok late Monday, killing at least 27 people and wounding scores more, according to local TV. 

PHOTO: AFP

AUG 17, 20158:39 PM

[BANGKOK] A bomb exploded outside a religious shrine in central Bangkok late Monday, killing at least 27 people and wounding scores more, according to local TV and the police.

Body parts were scattered across the street after the bomb went off outside the Erawan Shrine in the downtown Chidlom district of the Thai capital.

“All I can say is there has been an explosion in central Bangkok involving a motorcycle bomb,” deputy national police chief Aek Angsananond told Reuters.

Local media put the number of the wounded at 80.

A Reuters witness at the scene said she saw pieces of human flesh near the blast site, and a soldier later told onlookers to move back, saying they were checking for a second bomb.

There was no immediate claim of responsibility.

The country has been riven for a decade by intense and sometimes violent rivalry between political factions in Bangkok and elsewhere.

The army has ruled Thailand since May 2014, when it ousted an elected government after months of, at times, violent anti-government protests.

The Erawan shrine, on a busy corner near top hotels, shopping centres and offices, is a major tourist attraction, especially for visitors from East Asia. Many ordinary Thais also worship there.

REUTERS, AFP

    

New York state factory activity tumbles to lowest since 2009: NY Fed    

AUG 17, 20159:44 PM

[NEW YORK] Manufacturing activity in New York state plunged to its weakest level in August since 2009 due to steep drops in new orders and shipments, although optimism on future business improved, a New York Federal Reserve survey showed on Monday.

The New York Fed's Empire State general business conditions index tumbled from 3.86 in July to -14.92 in August, its lowest since April 2009.

Economists polled by Reuters had expected the index to rise to 5.00 this month. A reading above zero indicates expansion.

The survey's index on future business conditions, however, rose to 33.64 from 27.04 in July.

The survey of manufacturing plants in the state is one of the earliest monthly guideposts to US factory conditions.

The new orders index was in negative territory for a third month at -15.70 from -3.50 in July, while shipment activity declined to -13.79 from 7.88 in July.

The survey's gauge on the average employee workweek dropped to -1.82 from 4.26 and the index for the number of employees fell to 1.82 from 3.19.

The prices paid index fell to 7.27 from 7.45 July, while prices received fell to 0.91 from 5.32 the previous month.

REUTERS

      

Beijing tightens grip on home purchases in overheated area 

Beijing is stepping up curbs on property market speculation after prices surged in one area of the capital, raising concerns some bigger cities may also tighten home purchase rules. 

PHOTO: REUTERS

AUG 17, 20152:00 PM

[BEIJING] Beijing is stepping up curbs on property market speculation after prices surged in one area of the capital, raising concerns some bigger cities may also tighten home purchase rules.

China's year-long slump in the housing market has dragged on the economy but there are fears bubbles are forming in some big cities even as prices in smaller cities languish.

Analysts say other cities, however, are not expected to follow Tongzhou district, a southeastern suburb of the capital, as prices in that area had been fuelled by expectations it would become a sub-administrative center for local government.

Under the new rule, non-residents of Tongzhou and those who have not paid social insurance or taxes there for at least three years, are barred from buying second homes in the area, the Beijing municipal commission of housing and urban-rural development said in statement on its website late last Friday.

For people without Beijing housing registration, they must have paid more than five-years worth of taxes or social insurance with three-years of that registered in Tongzhou to buy the first home in Tongzhou, it said, adding that previous restrictions would stay in place.

Previously, buyers were not required to have paid three-years of taxes in Tongzhou or be registered as residents in Tongzhou, to buy homes in the area.

Analysts say market conditions remain weak in smaller cities. "We do not see this as a signal that the favourable policy stance will reverse in the short term, especially in the lower-tier cities," property analysts at Barclays said in a note.

The capital city's property controls are always more stringent than other cities as residents there are barred from owning more than two homes while non-residents who have paid more than five-year's worth of taxes can buy no more than one property in the city.

Chinese cities relaxed home purchase restrictions last year to support slow economic growth with only four first-tier cities keeping the rules unchanged.

While home sales and prices have improved in bigger cities in recent months after a barrage of government support measures, a huge overhang of unsold houses in small cities still keeps the housing market under pressure.

July property price data for 70 of the biggest Chinese cities is due on Tuesday and analysts expect prices to have risen further from the previous month on improved sales and market sentiment.

REUTERS

      

China audit uncovers misuse of affordable housing funds

AUG 17, 20154:31 PM

[BEIJING] China's state auditor said on Monday it has uncovered widespread irregularities in the country's affordable housing programme in 2014, including the misuse of 9.4 billion yuan (S$2.07 billion) of funds.

The problems were uncovered after auditing 182 projects, local government financing vehicles, housing and finance departments, the National Audit Office said in a report on its website.

The funds were misappropriated to pay salaries, office expenses, bank loans and invest in wealth management products, it said.

Some firms illegally obtained 485 million yuan of government subsidies and bank loans for the affordable housing scheme by fabricating documents, the auditor said. The funds were used to build dormitories and offices.

The auditor also found that 20,600 home owners did not qualify for affordable housing as they used fake documents in their applications.

China's central and local governments allocated 560.2 billion yuan for the affordable housing programme in 2014, including 198.4 billion yuan from the central government, the report said.

Nearly 1.1 trillion yuan in investment was made via bank loans, bond issuance and other funding channels, it said.

First approved in 1999, the program aims to provide cheaper housing to low-income families and to improve living standards.

The government has been expanding the affordable housing programme to help address widening income disparity and also provide support for the slowing economy.

Chinese policymakers have told banks to step up lending to support government projects under construction, especially urban subways and affordable housing.

The government said in June that it would extend 149.4 billion yuan in subsidies for renovating dilapidated urban houses this year, under a three-year plan to renovate 18 million dilapidated urban houses and 10.6 million rural houses.

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