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by Siew Hwa Ong on Thursday, January 3, 2013
The annual Town Council Management Report was released about 2 weeks ago, highlighting estate maintenance as an area for improvement.
Aljunied-Hougang Town Council (AHTC) was the only town council to get a RED band for its management of residents' arrears in their Service and Conservancy Charges (S&CC). AHTC’s grade for corporate governance was also pending its auditor's report.
The AHTC had responded that due to the transition of auditors after GE 2011, they had needed more time to complete the process. AHTC also raised that the AHTC was not part of the previous computer and financial IT systems shared by all PAP Town Councils and now provided as a service by a new third party vendor.
While it is understandable that there will be change of auditors, Town Council staff and IT systems due to changeover from GE2011, in the interest of the well-being of residents in Hougang and Aljunied GRC, it is still necessary that the public gets a clear understanding of the challenges they face and whether they are really able to resolve the issues timely, and manage the estates well sustainably, and take residents to greater heights in their living conditions.
Their blaming of getting a RED band for its management of residents' arrears in S&CC on not having access to the same computer and financial IT systems shared by all PAP Town Councils does not reflect well on their ability to manage and run big estates, and in general in the ability to take ownership for problems.
There are several fundamental questions that need to be clarified:
No. 1: Severe Arrears in Service and Conservancy Charges (S&CC)
More than 5% of Aljunied and Hougang households have S&CC arrears overdue for 3 months or more. And more than 50% of the Town Council's monthly S&CC collectible is overdue for 3 months or more.
Is this a sign indicating they have inadequate resources or competencies to run the Town Council? From the latest Town Council report published, AHTC was the only TC that posted severe arrears. Had the arrears negatively impacted the proper functioning of AHTC?
The issue of S&CC arrears cannot be deemed a trivial matter as it may affect a town council’s ability to upkeep the estate. While some town councils may choose to be more forbearing in recovering their S&CC arrears, they need to strike a good balance between being lenient (understandably to be empathetic to residents who may be facing financial hardship) and the ability to upkeep the estate sustainably.
One foreseeable risk of not recovering long overdue payments is that responsible households who pay their S&CC on time end up being adversely affected due to deterioration of living conditions.
From the financial statements, the average total mean monthly S&CC fees per year is approximately $5.5 million.
Therefore monthly collection on average is approximately $463,000.
So if they have been owed 50% of the monthly collectible for the last 3 months, means they have been in arrears about $232,000. This is sizable amount which they have not been able to collect.
No. 2: Business Continuity Plans
AHTC had said that their IT system for financial management was terminated and further extension was not granted by the new third party service provider. This does not come across as an acceptable reason. Given the importance of Town Council’s functions and Aljunied and Hougang collectively having a large number of residents, can they not at least come up with an interim IT solution? Similar IT systems these days need not be developed from scratch, there are off-the-shelf products that can be used as part of business continuity plans. It is risky not to have reliable backup plans when running big estates like Aljunied.
On why the PAP Town Council’s IT systems are now managed through a third party service provider, we know of many organizations doing that to achieve higher cost-effectivess and leveraging economies of scale, ie. productivity and business innovation. It certainly makes sense to separate out this non-core function (vis-a-vis estate maintainance and management) and still can use it seamlessly through in-sourcing.
No. 3: Taking Ownership
Prior to the merger of Hougang and Aljunied Town Councils, the grading of the Aljunied Town Council was GREEN, so the merger appears to also have a negative impact on performance. Is this indicating that the integration had not been smooth going? Do they have the necessary resources to manage the bigger and now more complex AHTC?
It is important that they clarify the above questions and take ownership of the poor report cards of severe arrears and RED banding, learn the lessons and think outside the box, instead of blaming all others.
Only then, the primary objective of the well-being of residents in these estates can be assured, and the overall standing of AHTC, in terms of resources and competencies, in running big estates can be validated.
The annual Town Council Management Report was released about 2 weeks ago, highlighting estate maintenance as an area for improvement.
Aljunied-Hougang Town Council (AHTC) was the only town council to get a RED band for its management of residents' arrears in their Service and Conservancy Charges (S&CC). AHTC’s grade for corporate governance was also pending its auditor's report.
The AHTC had responded that due to the transition of auditors after GE 2011, they had needed more time to complete the process. AHTC also raised that the AHTC was not part of the previous computer and financial IT systems shared by all PAP Town Councils and now provided as a service by a new third party vendor.
While it is understandable that there will be change of auditors, Town Council staff and IT systems due to changeover from GE2011, in the interest of the well-being of residents in Hougang and Aljunied GRC, it is still necessary that the public gets a clear understanding of the challenges they face and whether they are really able to resolve the issues timely, and manage the estates well sustainably, and take residents to greater heights in their living conditions.
Their blaming of getting a RED band for its management of residents' arrears in S&CC on not having access to the same computer and financial IT systems shared by all PAP Town Councils does not reflect well on their ability to manage and run big estates, and in general in the ability to take ownership for problems.
There are several fundamental questions that need to be clarified:
No. 1: Severe Arrears in Service and Conservancy Charges (S&CC)
More than 5% of Aljunied and Hougang households have S&CC arrears overdue for 3 months or more. And more than 50% of the Town Council's monthly S&CC collectible is overdue for 3 months or more.
Is this a sign indicating they have inadequate resources or competencies to run the Town Council? From the latest Town Council report published, AHTC was the only TC that posted severe arrears. Had the arrears negatively impacted the proper functioning of AHTC?
The issue of S&CC arrears cannot be deemed a trivial matter as it may affect a town council’s ability to upkeep the estate. While some town councils may choose to be more forbearing in recovering their S&CC arrears, they need to strike a good balance between being lenient (understandably to be empathetic to residents who may be facing financial hardship) and the ability to upkeep the estate sustainably.
One foreseeable risk of not recovering long overdue payments is that responsible households who pay their S&CC on time end up being adversely affected due to deterioration of living conditions.
From the financial statements, the average total mean monthly S&CC fees per year is approximately $5.5 million.
Therefore monthly collection on average is approximately $463,000.
So if they have been owed 50% of the monthly collectible for the last 3 months, means they have been in arrears about $232,000. This is sizable amount which they have not been able to collect.
No. 2: Business Continuity Plans
AHTC had said that their IT system for financial management was terminated and further extension was not granted by the new third party service provider. This does not come across as an acceptable reason. Given the importance of Town Council’s functions and Aljunied and Hougang collectively having a large number of residents, can they not at least come up with an interim IT solution? Similar IT systems these days need not be developed from scratch, there are off-the-shelf products that can be used as part of business continuity plans. It is risky not to have reliable backup plans when running big estates like Aljunied.
On why the PAP Town Council’s IT systems are now managed through a third party service provider, we know of many organizations doing that to achieve higher cost-effectivess and leveraging economies of scale, ie. productivity and business innovation. It certainly makes sense to separate out this non-core function (vis-a-vis estate maintainance and management) and still can use it seamlessly through in-sourcing.
No. 3: Taking Ownership
Prior to the merger of Hougang and Aljunied Town Councils, the grading of the Aljunied Town Council was GREEN, so the merger appears to also have a negative impact on performance. Is this indicating that the integration had not been smooth going? Do they have the necessary resources to manage the bigger and now more complex AHTC?
It is important that they clarify the above questions and take ownership of the poor report cards of severe arrears and RED banding, learn the lessons and think outside the box, instead of blaming all others.
Only then, the primary objective of the well-being of residents in these estates can be assured, and the overall standing of AHTC, in terms of resources and competencies, in running big estates can be validated.
