Government has turned the screws on the embattled Housing Development Agency (HDA), delaying the transfer of its funding for 2019 on the grounds that it would be “remiss and reckless” to do this before a raft of issues are resolved.
The agency, which was placed under administration last year after sexual and governance scandals, was told it would only get the money it needs to operate if it cleaned up its act and showed that it could deliver on its mandate.
Last month, the human settlements and water ministry placed the HDA on notice, saying that it needed to explain why it was using hundreds of millions of rands meant for operations to pay salaries. The ministry said the first tranche of the HDA’s funding for 2019 would only be released if it could prove that the funding would be prudently spent.
The delay in granting funding to the agency — which procures and prepares land for low-cost housing projects at provincial and municipal level — will negatively affect President Cyril Ramaphosa’s plan to accelerate low-cost housing delivery, which he announced in his state of the nation address earlier this year.
On June 6, human settlements director general Mbulelo Tshangana wrote to HDA acting chief executive officer Sibongile Mpofu, informing her that the application for a draw-down on its first operational grant for 2019 would not be made until certain conditions were met.
In the letter, which Mail & Guardian has seen, Tshangana said it would be “remiss and reckless” to transfer any funding to the HDA “without the necessary satisfaction that it would be applied in a responsible, prudent, compliant and developmental manner”.
Tshangana said that, because of the “litany of issues requiring attention, clarity, response and information”, an urgent meeting needed to be held between the HDA and the department. There, the minister, Lindiwe Sisulu, would be briefed on the steps taken by the HDA to ensure corporate governance and that it delivered on its mandate.
He outlined a series of 17 areas of concern about which the HDA had been asked to deliver a report, including what had happened to the investigation into alleged sexual misconduct by a number of its managers.
The areas of concern included: justifying the appointment of additional board members, the appointment of an acting chief financial officer and an explanation as to why the HDA was funding its salary and operational costs from grants meant for capital projects. This ran to the tune of about R228-million in total.
Tshangana further demanded to know how the HDA planned to fund its regional operations and the justification for the appointment of a strategic intervention team. He also asked for details about the appointment of additional board members.
In December, HDA chief executive officer Pascal Moloi and four other executives were suspended by the agency’s board, which decided to investigate claims of sexual misconduct and financial irregularities.
Nomaindia Mfeketo, then human settlements minister, appointed an administrator and dissolved the board, whose term had expired, replacing it with new members.
In February, Mfeketo — who was replaced by Sisulu after the May 8 elections — told a meeting of Parliament’s human settlements portfolio committee that the stabilisation of the HDA was progressing well.
In her budget speech on Tuesday, Sisulu said she had not yet met the entities under her control, including the HDA, but that she would be giving them her attention soon.
“The message I want to send is that it is not business as usual,” she said.
HDA communications manager Katlego Moselakgomo told the M&G that the first tranche of funding had been received. He said the operational grants received were meant to be used for both personnel costs and other day-to-day operations.
He said the agency had already delivered 605 housing units and 3 350 serviced sites through its various programmes this year.
Moselakgomo said that the investigations into sexual and other misconduct were still ongoing but that two executives and two managers had resigned from the HDA. Their names would only be released after seeking legal opinion, he said.
Moselakgomo referred questions about the appointment of the HDA board to human settlements.
Human settlements spokesperson Xolani Xundu had not replied by the time of publication.