R6.5 million salary for CEO of failed Housing Development Agency

1 March 2021

The Democratic Alliance (DA) will today write to the Auditor General in terms of S5(d) of the Public Audit Act, requesting a special audit and investigation into the affairs of the Housing Development Agency (HDA).

This after the 2019/2020 Annual Report, due to serve before the Housing Portfolio Committee tomorrow, has confirmed the DA’s on-going warnings that the entity is in extreme crisis.

Prior to the start of the reporting year, the Entity had twice been placed under the care of Administrators.

The entity was again placed under Administration in September and was without an Administrator or a Board between July and September.

During the same year, the entity had three acting Chief Executive Officers (CEO’s) while the full time CEO, Mr P Moloi, earned an annual salary of R6.5 million - an increase of R2.25 from the previous year.

Two acting Chief Financial Officers (CFO’s) managed the entity’s finances, followed by Minister Lindiwe Sisulu’s executive appointment of SASSA scandal embroiled, Brian Mosehla, whom she subsequently fired.

Nkululeko Poya, who resigned as CEO of the Rail Safety Regulator after facing 14 charges including gross misconduct, abuse of power and dishonesty, was also appointed as the Chief Operating Officer of the Entity.

While the entity boasts a budget of just over 1% of the Department of Human Settlement’s total allocation for the year, section Heads at the entity are earning up to R2.8 million – more than the Minister herself.

R 131 886 000 was recorded in irregular, fruitless and wasteful expenditure, up from R 109 430 000 in the previous year.

R4.3 million was paid in performance rewards.

The audit report also noted that:

There were no adequate systems for identifying irregular expenditure

Payments were made against unknown receipts

Overpayments were made for work not performed

Work was done without agreements in place with other departments

Contracts were awarded to suppliers whose tax matters had not been declared

Contracts were extended or modified without the approval of a delegated official

Financial statements were not prepared in accordance with the prescribed financial reporting framework

It is clear from the audit report that the HDA’s executive management and Board may indeed be liable for gross financial negligence.

The DA will further request that in line with the provisions of the Public Finance Management Act, Minister Sisulu be summoned to Parliament to present full details of all disciplinary processes arising from the repeated irregular expenditure incurred by this failed entity.

The situation simply cannot be allowed to continue.

Issued byEmma Louise Powell, DA Shadow Minister of Human Settlements, 1 March 2021