Audit hindered by subcontractor problems, but MEC says core functions are fine

SUBCONTRACTORS working at government housing sites have derailed the provincial housing department from getting a clean audit after the Auditor-General (AG) raised red flags. Presenting its annual report for 2016/17 to the Western Cape Legislature, the provincial department disputed AG Kimi Makwetu’s report on its financial statements, but later admitted that they had regressed.

Makwetu said there were not enough controls and there were no records and documents to support the targets and indicators. The department received an unqualified audit report.

Thando Mguli, the head of department, said the subcontractors who were hired by the major companies were not recognised by the AG.

“Previously, the subcontractors’ work was always recognised by the AG. The only two issues that we were affected by was the youth and women employment at the sites.

“The bigger companies will normally subcontract smaller jobs to smaller companies and we always ask them to note and report this to us. The AG never accepted the work of smaller subcontractors which were reported to us by the bigger companies,” he said.

ANC MPL Sharon Davids questioned the veracity of the annual report’s information. “Why is it that we have this problem now? We had the same targets last year; were those figures correct?”

Housing MEC Bonginkosi Madikizela said: “The point is that we have regressed, and we have accepted that. On our core functions, however, we are doing very well.”

Mguli also assured politicians that the information in the report was factual.

The department has delivered 19 829 housing opportunities, against its own target of 19 644. Of these opportunities, 11 283 housing units were delivered and 8 546 sites serviced.

During the financial year, 9 767 title deeds were transferred to beneficiaries.

The department also secured 50.11 hectares of land for affordable housing and 483.16ha of land for the development of major projects.

Mguli said the delivery of all targets was met with challenges of gangsterism, protests and vandalism.

He also said the department was in the process of developing a draft bill to obtain powers to acquire and dispose of land for housing developments.

Madikizela said: “The mandate of this department is to house, employ and empower. A total of 1 079 jobs were created and 50.12% of our budget is spent on historically disadvantaged individuals.”

There were nine reported cases of fraud and corruption in the department. Of the nine cases, seven were successfully closed.

DELIVERY OF ALL THE TARGETS WAS MET WITH CHALLENGES OF GANGSTERISM, PROTESTS AND VANDALISM