Wednesday, November 19, 2008

Town Council losses: Who's accountable?

Letter to Straits Times Online Forum by Ms Karen Woon

I REFER to yesterday's front-page report, "Town councils' exposure: $16 million", in which People's Action Party town councils (TCs) lost $16 million as a result of bad investments.

It is public money and $16 million is no small change. Most of us have never seen, or ever will see, $1 million in our lifetime.

Town council funds are obtained from our monthly conservancy charges and should be used for the maintenance of our estate. So, why was there such a large sum of money left behind for investment? Does it mean the council has overcharged us? Would such excess funds be better utilised to upgrade the estate facilities, or better still, be returned to each individual household via rebates?

The town council is a non-profit organisation. Why is there a need to invest such sums of money in an investment tool?

Are there enough transparency and audit processes in place to ensure checks and balances against the use of such funds? We have already heard of many large non-profit organisations like the old NKF and Ren Ci mismanaging their funds, what about town councils?

If a council made a tidy profit from such investments, what would happen to the principle sum and the investment gains? Again, is there enough transparency in this area?

Now that the council has made a loss in an investment gone wrong, does it mean there are insufficient funds left to support ongoing or future projects? Does the entire estate have to suffer the bad judgement of a few individuals. What fall-back plan does the town council have in making good these losses?

The Government has advocated high pay packages to public servants, because their pay should be commensurate with the risks they take, just like the CEO of a private organisation. But when mistakes are made, the CEO has to answer for them, most often at the cost of his job. So who should take the rap for these mistakes? And what actions will be taken to prevent future cases like this?

Karen Woon (Ms)