SINGAPORE – All town councils, save one, received the top rating in the latest town council management report released on Nov 30.

Chua Chu Kang Town Council (CCKTC) was the only one with a lower rating in the latest report, which assesses town councils’ corporate governance and internal controls.

CCKTC received an amber rating as it had two instances of non-compliance with the Town Councils Act. Both were cases of administrative oversight that have since been rectified.

In both instances, the town council had begun improvement works on non-common property and disbursed funds for the works without having sought the Minister for National Development’s approval.

The minister’s approval was sought retrospectively for both projects and was subsequently given to the town council.

As there was more than one instance of the same type of non-compliance, this was considered by the Ministry of National Development (MND) as a medium severity observation, which resulted in the lower rating.

CCKTC said the two oversights arose as they involved projects that were more complex and required additional approvals from MND.

One of the instances was discovered internally, following which the town council promptly alerted MND and immediately took corrective action, CCKTC said in a media statement on Nov 30.

“In the other instance, the town council quickly moved to rectify the administrative lapse once MND flagged the oversight,” said CCKTC’s spokesman.

The town council said it has since implemented additional measures to prevent these occurrences and to improve its standard operating procedures for ongoing and future construction projects.

These include enhanced briefings of key personnel, adhering to a comprehensive procedural checklist, and conducting regular internal reviews.

While the remaining 16 town councils received green ratings, four of them each had a low severity observation for one non-compliance with the Town Councils Financial Rules or Town Councils Act.

The town councils were Aljunied-Hougang, East Coast, Jurong-Clementi and Marsiling-Yew Tee.

These were cases of first-time administrative oversight and have since been rectified, said the ministry.

The four town councils received green ratings for corporate governance as each case of non-compliance was deemed a low severity observation, and they scored 0.5 point.

Points are assigned based on severity of the observations – for instance, an observation that constitutes an offence under the Town Councils Act will be considered high severity and result in more points.

Town councils that score less than one point are given a green rating, while those that score one to less than two points get an amber rating. Two points and above result in a red rating.

The report is based on MND’s review of the town councils’ financial year 2022 audited financial statements, their auditors’ reports, and checks on the town councils’ declarations of compliance with the Town Councils Act and rules.

The governance report on Nov 30 covers the period from April 2022 to March 2023, and is published at the end of every year.

A separate operational report is published each June, and it looks at areas such as estate cleanliness, lift performance and management of service and conservancy charges (S&CC) arrears.

MND noted that all town councils reported poorer financial positions for the financial year 2022, mainly due to cost pressures from higher water and electricity prices, lift maintenance and other maintenance works.

This is in contrast to its previous governance report, when the town councils had generally reported surpluses for the 2021 financial year.

All town councils have either increased or announced plans to raise their S&CC rates over the next two years, and this is expected to improve their financial positions, said MND.

Town councils run by the People’s Action Party had announced in June that S&CC rates will be raised twice in the next two years, with the first increase having taken effect on July 1. The next hike will come into effect on July 1, 2024.

Aljunied-Hougang Town Council also announced two increases in S&CC, with the first one on Oct 1, and the second on July 1, 2024. Sengkang Town Council said it would increase S&CC from March 1, 2025.

Both Aljunied-Hougang Town Council and Sengkang Town Council are run by the Workers’ Party.

MND said the Government will continue to monitor town councils’ financial positions and assess if further support is required beyond ongoing assistance provided to all town councils, such as substantive operating grants and special funding support.