I read with mixed feelings about the losses that 2 town councils lost through investing their sinking funds in the failed products of Lehman, Merrill Lynch and Morgan Stanley.
To me I think the principle and spirit behind the investments are sound. However, the process of selecting the right investment vehicle seems to be found wanting in my opinion.
These funds are still public funds.
So the same care must be shown for all public monies as with the sinking funds. Town councils are not Temasek Holdings or GIC. I don't think they have investment analysts in their payroll (or do they ???). If they have fund managers, I think we ought to know who they appointed.
100% risk-tolerant in these cases, seems to be very uncalled for. There are no guarantees at all.
MND say they have guidelines and yet do not wish to over-limit the flexibility the Town Council has over their funds. I think that is a surprising about turn in managing public funds !
I am shocked into asking the following questions :
1. Isn't the Ministry of Finance the final authority in giving guidelines on the usage of public funds ? And that such further inter-ministry guidelines are issued in line with MoF guidelines?
So did MND follow MoF overall guidelines?
2. The disbursement of such large amount of cash for investment in high-risk products would have been reported through to the Accountant-General office. Why were there no question raised ?
3. The annual audit of accounts would also have picked up such high risks disbursements through the Auditor-General office. Why were there no mention in the last AG report to the Parliament?
4. If the above are circumvented, does that mean the top-man in Town Councils have such high authority ?
5. If they appoint fund managers, are there processes and frameworks set-up to review fund manager's performance and investment style ?
I am questioning because I feel the loss of the money - heartpain ah - could be better used elsewhere such as :
- helping needy families have a roof over their heads
- setting up more bursaries to help needy students to get a chance in education
- provide more grants to AFA for stronger public awareness of sexual diseases and education.
- build more handicap friendly facilities etc
That's alot what $12 million can do !
I don't think the public should let it go like this. An inquiry should be set up. Clear the air.
Since we have been harping on good governance, I think the public deserve the explanation.