awarding of more than R10 million in housing subsidies by the Free State
Department of Housing
10 May 2006
The Auditor-Generalâs performance audit of the approval and allocation of
housing subsidies by the Free State Department of Housing has highlighted
discrepancies of more than R10 million in subsidy allocation. In addition,
exception reports highlighting further potential irregularities to the value of
almost R9 million were handed over to the department for further investigation.
These figures were revealed in the performance audit report which will be
tabled on Wednesday, 10 May. The figures are based on a calculated potential
amount of R15 000,00 per applicant and were found in 1 589 exceptions out of a
national total of 53 426. Of the 107 736 beneficiaries approved in the Free
State irregularities found are:
1. 280 applicants are government employees earning salaries in excess of the
housing subsidy threshold (national figure: 7 353)
2. 390 subsidy approvals after the applicantâs date of death (national figure:
5 335)
3. 57 duplicate subsidy approvals for the same applicant and 147 duplicate
subsidy approvals for the same household (national figures: 1 618 and 1 981
respectively)
4. 76 potential instances where subsidies were approved for individuals under
the age of 21 (national figure: 6 708)
5. 2 potential instances of subsidies awarded to individuals receiving monthly
payments from the Government Employee Pension Fund (national figure: 111)
6. 315 potential instances of subsidy approvals to applicants with invalid ID
numbers (national figure: 4 471)
7. 322 potential instances of multiple subsidies approved for the same property
(national figure: 25 849)
âThe purpose of this report is to facilitate public accountability by
bringing the irregularities and limitation in the current low-cost housing
subsidy process to the attention of the legislature, and to assist in improving
service delivery and value for the tax payersâ money. It is further hoped that
this report will enable the Free State Department of Housing to take the
corrective steps required to improve the management measures, controls,
processes and systems in the approval and allocation process of low-cost hosing
subsidies,â said the Auditor-General, Mr Shauket Fakie.
Like Free State, separate reports on audits conducted in the other eight
provincial housing departments have been or will be submitted to the respective
provincial legislatures for consideration. Most of the findings originated from
deficient management measures that were generic throughout. It is hoped that
the reports will assist the provincial housing departments in identifying
subsidy applicants who should not have received a housing subsidy or who should
have received a reduced subsidy in accordance with the national housing code.
Inadequate management measures identified include the following:
1. Applicants made misrepresentations and supplied outdated information to
the department on their subsidy application forms
2. Officials manipulated the Housing Subsidy System (HSS) without proper
verification of the electronic search results. Therefore, subsidies were
awarded to applicants who did not quality for a housing subsidy
3. Subsidy application forms were not always verified for correctness and
completeness by users and system administrators
4. The HSS system failed to detect that applicants were deceased at the time
that the subsidy application was approved
5. The department did not have adequate management measures to ensure the
safekeeping of completed subsidy application forms.
The head of the department indicated that in cases where government
employees knowingly have not declared their income correctly the necessary
steps will be taken to recover the subsidies.
Mandated by the Constitution of the Republic of South Africa, 1996, the
Auditor-General (AG) of South Africa is responsible for the auditing of
national and provincial state departments and administrations, all
municipalities and any other institution or accounting entity required by
national and provincial legislation to be audited by the AG. Its purpose is to
promote public accountability in all tiers of government. As an independent
organisation, the Auditor-General is answerable and accountable only to
Parliament.
Enquiries:
Adri van der Merwe
Business Executive: Reputation and Stakeholder Management
Auditor-General of South Africa
Tel: (012) 426 8175
Cell: 082 787 5291
E-mail: adrivdm@agsa.co.za
Website: http://www.agsa.co.za
Issued by: Auditor-General of South Africa
10 May 2006
Source: Auditor-General of South Africa (http://www.agsa.co.za)
