Huge housing scam uncovered
2006-05-29 10:23
Pretoria - More than 2 100 officials of the Gauteng housing and local government department might be investigated after fraud of more than R133m in the allocation of housing subsidies was revealed.
These officals had received R32.8m in subsidies, despite their income being more than the minimum a family had to earn to qualify for the subsidy.
This was part of the findings of a report by the auditor-general (AG), who investigated housing subsidies allocated between January 1995 and March 2004.
According to the report, some officials had indicated on their subsidy applications that both marriage partners were unemployed, while both were actually employed by the department.
Some officials also lied about the income of their household, while others attached old receipts as proof of income.
System apparently short-circuited
Despite the AG's finding that the control procedures were insufficient, the department's accountable official insisted that the officials' applications were apparently valid.
The AG also found that more than 1 600 people were receiving more than one subsidy despite the department's computerised evaluation system which automatically disqualified applicants. The value of this was nearly R27m.
According to the report, the only explanation was that the system had apparently been short-circuited by a user or administrator, and that the applications were as a result indicated as "accepted". No reasons for the acceptance could be found, and according to the AG, no "feedback" was received from the department.
More than R25m was also lost after 1 708 applications for subsidies were allocated to people who were, according to home affairs, already dead.
Although the AG's report painted a dark picture regarding the allocation of subsidies in the province, it was difficult to determine the exact extent of the fraud.
"The department couldn't supply all the necessary subsidy application forms and therefore not all the planned audit procedures could be done," according to the report.
The department could also not find the supporting documents submitted for the subsidies that had been paid out. It was therefore impossible for the AG to determine the amount approved for subsidy payments.
Although the report had already been handed to the department and legislator in February, it had still not been discussed at a meeting of the provincial housing portfolio committee.
Kate Lorimer, DA MP and member of the housing committee, said it was a matter of concern. "The legislator and portfolio committees are supposed to act as watchdog, and yet a damning report like this has not been discussed. Why not?"
The chairperson of the housing committee, Godfrey Tsotsetsi of the ANC, was not available for comment.