Property Matters – HDC Acts

Three laws being broken

  1. HDC Act (no 24 of 2005) – At sections 18, 19 and 20 require HDC and the Housing Minister to publish audited accounts within 6 months of the end of every financial year.
  2. Integrity in Public Life Act – At S.24 (3) prohibits Public Officials (which would include the HDC Board) from ‘…undertaking any project or activity involving the use of public funds in disregard of the Financial Orders or other Regulations applicable to such funds…
  3. Securities Industry Act 1995 and the Securities Industry Bye-Laws 1997 – These require HDC, as an issuer of bonds, to publish its audited accounts annually for the information of bondholders.


The HDC has never published its audited accounts since it was established in October 2005 to replace the National Housing Authority (NHA). The previous article highlighted the HDC’s missing accounts and made the point that their failure or refusal to publish those audits was in breach of at least three laws (see sidebar).

On 3rd January 2017, I made a Freedom of Information request for details of NHA and HDC transactions in Public Money in the period 2003-2016, during the life of the current (2002) Housing Policy. The Public Money received would include budget allocations; monies derived from property rentals and sales; bank loans and bond funding. It is important to separate recurrent and capital expenditures. I also asked for those amounts to be itemised by year so that trends can be identified for further examination.

The Freedom of Information Act (FoIA) requires Public Authorities to “…take reasonable steps to enable an applicant to be notified of the approval or refusal of his request as soon as practicable but in any case not later than thirty days after the day on which the request is duly made…” (s15). At this point, over 60 days have elapsed since my application, but there has been only an acknowledgment.

The HDC is over the time-limit in the FoIA, which is the usual case for busy Public Authorities, but the real question in my mind is whether the request will be approved or refused. If my request is approved, the public will have a clear view of HDC finances, for the first time since its establishment.

If my request is refused, the HDC is required to provide a detailed rationale and that is something worth considering, given the continuing concealment of those accounts. Bear in mind that contractors wishing to qualify for HDC contracts are required to provide three years’ audited accounts. That is an acceptable requirement since it is prudent for any party to major contracts to satisfy itself that the companies with which it enters contracts are sound and well-managed. That is the rationale, which is entirely justifiable. The size of the HDC and similar Public Authorities, together with the large-scale contracts they offer, make them effectively exempt from those rules of commercial prudence, whatever the law says. Those bodies are effectively underwritten by the resources of the State, so they would have no difficulty attracting bids from contractors who are unable to establish their financial state.

It seems impossible that the HDC can justifiably refuse my request for this information, the decisive point being that the cited laws require a far greater level of disclosure.

In any case, the audits for 2004-2015 have been completed, if the official statements are to be believed (see sidebar below). So how much longer will these unexplained delays continue?

HDC’s audits?

HDC $9.4B disappears – Newsday of 19th December 2015
In that report, then HDC Managing Director, Jearlean John, said –

“…John said audits between the years 2004 and 2009 were done by KPMG and earned a “disclaimer of opinion”…”

Audit reveals questionable $b contracts at HDC – Daily Express of 14th June 2016
In that report –

“…The HDC board yesterday issued a statement stating that an audit into the agency for the period 2010-2015 has been “substantially complete”.

“However, due to ongoing litigation against the organisation the findings of the audit cannot be placed in the public domain,” the statement said.

The audit, which took over six months, was done by Pricewaterhousecoopers (PWC) and cost about $1.1 million…”

Assuming that those statements were correctly reported, there are significant points arising –

  1. Firstly, it would only be possible to audit the 2010-2015 period if the prior audits were available, since an ‘opening balance’ would be needed to start such a large-scale professional exercise. In that respect at least, this statement appears to corroborate Jearlean John’s earlier statement that KPMG had completed audits for the period 2004-2009.
  2. Secondly, one can only wonder at the mindset which could declare that findings of an audit cannot be released due to ongoing litigation. Are we to believe that litigation can excuse continuing breaches of the law? I tell you.

One thought on “Property Matters – HDC Acts

  1. Afra, excellent piece as usual.

    A clear trend (or is it policy) is emerging. Major recipients of taxpayer dollars are simply refusing to disclose or even facilitate audited statements. I remind you and your readership of the tens of billions of dollars spent by the THA since their last audited statements. I shall be following your lead and submitting FoIA requests for same or any unaudited statements if final audits are unavailable.

    Audited statements and the working papers from audits offer an indelible trail leading to corrupt practices in the expenditure of public money. For those of us in the fight against corruption, the good news is that the trail of transactional evidence won’t disappear because of a failure to produce audited statements in a timely manner. It is the lack of political will to follow the trail that should most concern us.

    I live in hope that we will one day summon that political will. I am comforted by the reality that the transactional trail will always be available and will lead us to the abusers of public trust.

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