Tuesday 17 October, 2017

HDC suffers poor auditing

The Housing Development Corporation (HDC) is years behind on auditing its finances and administrative reports and in some cases, this was a direct result of under-staffing at the HDC and slow auditing by external firms.

It was noted that administrative reports have been submitted up to 2014 as 2015 and 2016 are currently being worked on. In terms of financial statements from agencies, some are outstanding with those completed up to 2004.

This was revealed during a sitting of the Public Administration and Appropriations Committee earlier today.

Acknowledging this, Marion Hayes, Acting Permanent Secretary of the Housing Ministry said the current staffing at the internal auditing department is severely inadequate.

“Right now we have one auditor (2), one auditor (1) and two auditing assistants and going forward if we have to do audits on the agency under our purview that amount of staff would not be sufficient.”

Committee member Wade Mark labeled as irresponsible, the absence of accountability in the context of the submission of annual audited accounts, balance sheets, and other financial statements.

In response, Inskip Pollonais, HDC Acting Divisional Manager of Finance said the Corporation required the assistance of external auditors. He added that KPMG, the global network of professional firms providing Audit, Tax and Advisory services, had not done a timely job at auditing for the HDC.

 “We do have intentions of approaching the auditor general to get approval from 2010 to 2016. We only have up to 2009, the current KPMG is currently auditing 2007 but we have up to 2009 approval.

I think we will have to approach the auditor general with a view to getting not just KPMG, one or two other firms involved in the audit because that is where we are right now and we can’t go to the slowness or the pace of KPMG to get these things done but the figures are there prepared up to 2016 so I think how you can help me is probably by sensitizing the auditor general that we may have to use more than one external auditor to get this thing done.”

It was also noted that there were key findings of the qualified audit of 2004. Some of those were delayed bank reconciliations, inventory management, fixed asset register issues, and payables.

Meanwhile, PAAC Vice Chairman Dr Lackram Bodoe questioned how the HDC was managing its funding given that it was operating with a $354,341,372 allocation, which represents a decrease of about $69,000,000.

Pollonais noted that the HDC’s Victoria Keyes apartments were expected to rack in around $400,000,000 to cover the debt. He admitted that the HDC still depends on the Ministry of Housing to pay its bond interests, debt financing, and loan arrangements. However, he said the HDC already acquired some $63,000,000 from the sale of 30 units within 5 weeks.