AG finds R4m in housing-subsidy irregularities

The auditor general’s (AG) performance audit on the approval and allocation of housing subsidies to municipal employees by the Mpumalanga department of local government and housing has highlighted discrepancies of more R4-million in subsidy allocation.


These figures, based on an audit of nine municipalities in Mpumalanga, were revealed in the performance audit report tabled in the Mpumalanga Provincial Legislature.


Of the 525 beneficiaries approved, irregularities found were:

  • An amount of 504 beneficiaries received housing subsidies while employed by a municipality;
  • Five officials did not qualify for housing subsidies as they earned more than R42 000 per year. None of these officials declared their household income when they applied for the subsidies;
  • Thirty-five employees were awarded full housing subsidies instead of reduced subsidies.
    These officials qualified for housing subsidies as they earned less than R42 000 a year, but they did not declare their household incomes when applying for subsidies. This non-disclosure resulted in them getting full subsidies;
  • Fiftenn officials declared lower household incomes when they applied for subsidies. This resulted in these employees being awarded higher subsidy amounts;
  • Payroll information of 435 officials could not be obtained from the municipalities to verify their eligibility for housing subsidies. However, information from the Housing Subsidy System (HSS) and subsidy files received reveals that 113 of these officials did not declare their household income. This poses a risk that applicants could have been awarded wrongful housing subsidy amounts;
  • A further 21 beneficiaries received housing subsidies while their spouses were employed by a municipality. It could not be verified if these employees qualified for subsidies since payroll information of their spouses could not be obtained from the municipalities. It was identified that 18 of these beneficiaries had not declared their spouses’ income when applying for a subsidy; and
  • The audit also identified 59 cases where properties have been approved for transfer to new beneficiaries but have not been transferred a year after the approval process. Some of these properties were approved as far back as 1995 but were still not registered in the names of beneficiaries.
Says Auditor General Shauket Fakie: “The purpose of this report is to facilitate public accountability by bringing the irregularities and limitation in the current housing subsidy process to the attention of the legislature, and to assist in improving service delivery and value for the taxpayers’ money.


“It is further hoped that this report will enable the Mpumalanga department of local government and housing to take corrective steps required to improve the management measures, controls, processes and systems in the approval and allocation process of housing subsidies.”—I-Net Bridge

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