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Growing mess at new state entity

The top brass of the National Housing Finance Corporation (NHFC) have been implicated in two internal investigation reports for financial misconduct involving more than a dozen different transactions.

These executives include chief executive Samson Moraba, the head of human resources, the head of the legal department and several general managers.

The investigations, conducted by Ngubane & Co auditors, were instituted after the national treasury refused to condone R3-million worth of irregular expenditure in one financial year. The NHFC had, on numerous occasions, failed to institute proper tender processes when, for instance, hiring top law firms and paying for training, team-building activities, consultants, research companies and travel agents.

The NHFC is a R4.9-billion asset-based organisation that has been mandated with finding workable models on affordable housing finance for the low- and middle-income target market. It is crucial to the government’s constitutionally required mandate of ensuring housing for all.

This entity is also integral in the formation of the Human Settlements Development Bank that was announced by President Cyril Ramaphosa during his State of the Nation address in February last year.

“If we are to effectively address the substantial housing backlog in our country, we need to develop different models of financing for human settlements. It is for this reason that we are establishing a Human Settlements Development Bank that will leverage both public and private sector financing to aid in housing delivery,” said Ramaphosa.

The investigation reports that the Mail & Guardian has seen — dated February 18 2020 and September 23 2019 — are scathing about the chief executive, Moraba, who is meant to be driving this huge project. 

“Necessary disciplinary action should be instituted against Mr Moraba … for their failure to take effective and appropriate steps to prevent irregular expenditure within their area of responsibility and for committing an act of financial misconduct as stated in section 83 of the PFMA [Public Finance Management Act],” reads one of the reports.

Before any disciplinary action was taken, the acting chief financial officer (CFO), sent the reports to the department of human settlements, water and sanitation. This is the department under which the NHFC falls.

He was given a written warning.

Moraba confirms this warning, saying that the NHFC board was shocked that the report had been “widely disseminated before they could even apply their mind” to it, and added: “The written warning to the acting CFO was for flouting NHFC governance processes and procedures, and not for the content of the report itself.”

The chief executive — who, during the 2018-19 financial year when most of the irregularities occurred was paid more than R9-million for his salary and bonuses — confirmed the irregularities, but told the M&G that there was no fruitless and wasteful expenditure so there was no loss to the entity.

But the Ngubane reports state that, in reference to some of the transactions investigated, although no loss could be ascertained, “we are, however, unable to evaluate whether the amount … was fair or competitive. We are thus unable to conclude whether the NHFC received value for money.”

And the woes of the fledgling entity have extended to angry staff. Two weeks ago staff unions called on the corporation to take all staff members for Covid-19 testing, which should be paid for by the NHFC and requested that, should any of the staff test positive for Covid-19, the entity should be liable for the medical costs.

This came after Moraba communicated only to executive staff members that a board member had tested positive for Covid-19 on March 27.

According to two staff members, executives, who had received the email just before midnight, stayed away for fear that they may have been exposed.

“They let us go to work, yet executives had the opportunity to stay at home. We only received a notice to staff regarding the positive case at 3.45pm.

“Staff are extremely upset and feel that the NHFC violated their rights and breached the occupational health and safety act. They did not care about exposure to the staff. They did not vacate the office or sanitise,” said one staff member.

Lebogang Selepe, the spokesperson for one of the unions, Sasbo (a finance union), said: “It is very clear that the employer failed to notify staff about the positive case in time for them to take the necessary precautions.”

Selepe added that: “We want the employer to explain why there was an unreasonable delay in alerting staff about a colleague who had tested positive for Covid-19, and thus failing to take the necessary preventative measures. It must be noted that Sasbo takes this as a violation of the human rights and health and safety of our members.”

The M&G understands the board member has been in self-isolation since the test. But before he was tested, he had attended at least two meetings at the NHFC premises a week before the shutdown. Staff members were called in to present during these board meetings, increasing concerns about spreading the virus.

But Moraba told the M&G that he had informed the company’s executives, on the understanding that they would inform their staff members. Since the outbreak, the entity has disinfected the premises every morning; made sanitisers available to staff; disseminated information on the pandemic, including physical distancing; and observed the same during meetings. 

“On hearing the news, most of the executive members who attended the March 12, 19 and 23 meetings, went for testing, consulted their doctors for advice, and immediately went into self-isolation,” Moraba said.

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Athandiwe Saba
Athandiwe Saba

Athandiwe Saba is a multi award-winning journalist who is passionate about data, human interest issues, governance and everything that isn’t on social media. She is an author, an avid reader and trying to find the answer to the perfect balance between investigative journalism, online audiences and the decline in newspaper sales. It’s a rough world and a rewarding profession.

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