Building board lines its pocket
The board of the National Home Builders’ Registration Council (NHBRC) has held more than 100 meetings in a year, plans to outsource its core work and its members lack even a basic knowledge of their jobs.
These are just a few of the allegations made in a dossier compiled by executives of the council, who are pleading with the department of human settlements, Parliament’s standing committee on public accounts (Scopa) and the minister of public enterprises to intervene and investigate what they have termed the erosion of the council.
The board members’ fees escalated from about R6-million in 2014 during the term of the previous board to more than R11.8-million in 2015. According to the NHBRC’s annual reports, spending on board members, executive and nonexecutive, increased to more than R18-million in the 2016 financial year.
The council is an agency of the department of human settlements. Its main role is to protect housing consumers from shoddy and substandard building work. It regulates the home building industry by registering builders and inspecting houses.
Three years ago, a new board was elected and this was when things started going wrong, according to the dossier. “A plea to save the soul of the National Home Builders’ Registration Council” is the subject line of the dossier, which the spokesperson for the council, Tshepo Nkosi, confirmed has been received by the board.
It outlines how the board has allegedly eroded governance and reporting structures, and brought chaos to the organisation with suspensions and the termination of senior executives’ contracts.
Last year, four executives were suspended, including the then acting chief executive, Thandiwe Ngqobe, based on a report that investigated allegations of irregular employee appointments. The four have returned to work and, according to the dossier, there have been no disciplinary hearings.
The dossier contains the exit interview of Mongezi Mnyani, the former chief executive. In it, Mnyani says he believes the council spent a lot of unnecessary time in meetings and often not on strategic matters of the organisation. Most of the council members have not had board experience and their building experience was inadequate, he says.
“Most council members are political appointments and many do not have broad industry knowledge at board level. Working in the council has been very frustrating due to the lack of trust and endless questioning on managerial issues. Council members are always requesting for endless documents and information creating defocus on strategic issues,” Mnyani says.
The dossier also highlights how, in just two years, the board members have called nearly 200 meetings but took 18 months to employ a chief executive. The appointment was announced in October.
The wildly escalating board fees are also addressed. “In a bid to illustrate the ridiculousness of this scenario, the acting chair of council was at some point earning an amount equivalent to the salary of the CEO [chief executive officer] on a monthly basis despite there being an acting CEO who was actually paid to act in that position,” according to the dossier.
Board members were raking in tens of thousands of rands each month and “increasing the cost associated to council fees by over 60% year on year to an amount of R18-million for 14 council members”. This equates to about R1.3-million per council member, which amounts to the annual remuneration of a senior manager.
“The other worrying reality is that this current council has been allocated assets, based on their demands, which include contract cellular phones, with airtime and data, laptops with 3G cards. Some [board members] have the wi-fi infrastructure installed in their homes,” the dossier reads.
But Nkosi says the council members’ payments were above board.
“The council can account for this as there were agenda items that needed to be attended to relating to governance and oversight functions. The allocation of the electronic tools of trade to council members is well within budgeted expense to ensure the fulfilment of the members’ duties,” he says.
The dossier also accuses the council of trying to outsource work that forms the core of the NHBRC’s functions. A tender was advertised in September last year requesting bids to provide inspectorate services on behalf of the NHBRC.
The dossier alleges there is no evidence that the board conducted a thorough assessment to determine whether outsourcing would work.
Nkosi says that the bidding process has been cancelled but it will be reinstated and the board is expecting to compile a database of competent service providers. “Council has maintained an absolutely financially prudent approach to managing the finances of the NHBRC to the extent that we received an unqualified audit report [from the auditor general] and we operate within approved budgets,” he says.
The spokesperson of the department of human settlements, Xolani Xundu, says the new minister is not aware of the contents of the dossier but is in the process of acquiring it and will study it.