HOUSING AUTHORITY (HA) AUDIT AND PUBLIC

HOUSING AUTHORITY (HA) AUDIT AND PUBLIC INQUIRY

Friday 30 October 2020 - The Minister for Local Government, Housing and Community Development Hon Premila Kumar received the Audit and Public Inquiry Reports on HA two weeks ago from the Chair of the Board of Directors of HA.

The Audit of HA was undertaken after cases of corrupt practices came to light on a number of dealings of staff of HA and the members of the public. Amidst, such revelations, and lack of explanation from HA, the Hon Minister for Local Government, Housing and Community Development ordered a special internal audit.

The increasing number of complaints and concerns raised by members of public in relation to very long waiting for allocation of lots whilst those who didn’t qualify appeared to have received lots over the most deserving, prompted the Minister to call for a Public Inquiry to hear first-hand from those deserving cases that have not been able to get lots.

Hon Kumar today revealed that the Housing Authority had lost its purpose over the past several years and operated without any direction and due regard to policies and procedures that were there to guide the Board and Management to carry out their mandate.

Hon Kumar revealed that there was failure on governance, risk management and compliance by HA which lead to the failure in the functioning of HA in an accountable and transparent manner. Major failures included as outlined in the Audit Report are:

Use of Demand Survey Form (DSF) which was designed to gauge the demand for housing was used as application form. The general public was not aware that DSF would later become an application form despite DSF clearly stated that “DSF is not an application form for lots being developed”.

No evidence that the selection of lots were made from the database or from the DSF kept in the customer files.

Income verification was mostly limited to submission of customer pay slip signed by the employer. HA did not consistently carry out independent verification of customer’s income. HA also failed to do adequate due diligence on income of those applicants who were sole proprietors.

Household income verification was not performed in case for a single applicant.

The selection and allotment of lots processing were not documented.

Third party confirmations were not obtained prior to customer selection.

Segregation of duties was not exercised in customer selection and lot allocation process.

Policies and procedures of HA indicated that Authority was giving preference for lots to customers who indicated financing the purchase of lot and construction of homes.

Allocation of more than one lot to same customer.

Customers who owned properties were allocated lots. HA did not perform further checks of property ownership of these customers prior to allotting lots.

Customers used retired elderly parents and relatives with no source of income to obtain lots by transferring money to their accounts.

Entertaining cash customers without verifying their finance sources.

A number of current and former staff of the HA and their relatives were allotted lots and lack of documentation to confirm whether adequate disclosure of interest were made by these staffs.

Several cases for suspected fraud and possible collusion between staffs and customers.

Lack of documents for tenders awarded and no evidence of declaration of interest in relation to tender process.

The Audit Report also highlights that in many cases the requested information by the Audit General’s Team was not provided by HA which demonstrates that there is no proper centralized system for record keeping and tracking system on decisions on all lots allocated to persons.

The Audit report also pointed out that some former staff refused to be interviewed where they had approved lots despite not having the authority to approve.

The Special Audit report concluded that the:

Governance, Risk and Compliance was not exercised to its highest level
Critical records such as Tender documents for land development were not provided during investigation.
Possible cases of suspected fraud and collusion

Commenting on the Public Inquiry, Hon Kumar mentioned that majority of those participated in the public inquiry (81%) was from the central division, understandably this being the area where most of the HA developments took place in the last 10 years.

Hon Kumar revealed that the Public Inquiry clearly showed that the people have been made to run around by the staff of HA and yet have not been granted lots till today. Most of the public complaints were in regards to the poor level of service provided by HA staff and their lack of knowledge on the policies and products.

Hon Kumar also explained that the Public Inquiry findings reconfirmed the findings from the special purpose audit in relation to the lack of clarity on lot allocation and selection policy and the lack of transparency in the Tender Process. There were also cases of possible “back door dealing” which again confirmed possible collusion between staff and customers.

Moving forward, Hon Kumar mentioned that there is an urgent need to:

Reform HA to make it more dynamic for the purpose it was established. The Board has been asked to urgently look at the HA organization structure to re-align it with the mission and goals of the organisation.
Revisit the policies and procedures of HA to ensure these are clear and relevant for the purposes.
Approval of development projects as well as allotment of lots will be tightened so that there are no rooms for manipulation.
CEO and Senior Management Staff should be assessed on their capability to deliver the Annual Work Plan.
HA to provide all missing information and take appropriate action in case of missing files and information.
Establish a database on all projects, lot allocations with all details and profiles.
Cases where fraud and mismanagement is suspected should be referred to FICAC for further investigation.

Hon Kumar also explained the increasing level of engagement that the Ministry of Housing will be having with HA moving forward in strengthening the housing policies and also introducing a much needed new Housing Act to strengthen the legal framework within the housing sector.

End.