The National Home Builders Registration Council (NHBRC) is an agency of the National Human Settlements Department tasked with the responsibility to provide protection in terms of the Housing Consumers Protection Measures Act (Act No.95 of 1998).

New Treasury regulations, soon to be published under the Public Finance Management Act, could have major implications both for property developers and human settlements departments vying to gain access to well-located, non-core land owned by state-owned enterprises. 

Friday, 14 October 2005 02:00

Sitting on a scandal

Forensic report on estate agency board is being kept under wraps

The concerns surrounding the ownership of certain investment properties owned by the Public Investment Commissioners (PIC) would be resolved by the end of the financial year

 

Brian Molefe

 

February 17, 2004

By Ann Crotty

Johannesburg - The concerns surrounding the ownership of certain investment properties owned by the Public Investment Commissioners (PIC) would be resolved by the end of the financial year, according to Brian Molefe, the PIC's chief executive.

The auditor-general's report, which is included in the PIC's annual report, refers to concerns related to the PIC's financial statements, including the inability to confirm ownership of certain investment properties.

"Similar to previous years, title deeds could either not be found or were not registered in the name of the PIC or related parties."

According to the 2003 annual report, PIC's property portfolio was valued at just over R3 billion at end-March. This was equivalent to 1 percent of the R310 billion total assets under management.

Yesterday Molefe, who took the helm at PIC just six months ago, said that by the end of the financial year "this will no longer be an issue". He explained that the process of handing over deeds relating to properties in the former homelands, which had not been formalised in the past, was now under control.

Many of the concerns raised by the auditor-general relate to matters that are expected to be resolved by the corporatisation of the PIC.

At the beginning of the month the cabinet approved the Public Investment Corporation (PIC) Bill, which provides for the corporatisation of the PIC and will enable it to operate as a commercially driven asset management company for investing and managing funds for public bodies.

Although corporatisation would release the PIC from many of the restraints under which a government department has to operate, chief of which are related to the employment and pay of executives, it will continue to be accountable to parliament's standing committee on public accounts as well as the Public Finance Management Act. 


In his 2003 report, the auditor-general stated that the "resources and the PIC Act did not enable the PIC to operate effectively in a highly specialised financial service environment. The process of restructuring the PIC is under way, and is intended to address some of these constraints."

Apart from the missing title deeds, the auditor-general referred to a number of concerns about the PIC's financial risk management. "The formal risk management framework adopted by the board in October 2002 has not been implemented at year-end, mainly as a result of a risk manager only being appointed subsequent to year-end.

"Consequently I have been unable to satisfy myself, firstly, as to the extent to which management managed all significant financial risks and, secondly, as to the extent to which management carried out all procedures embodied in their financial risk management assertions."

In addition the auditor-general found there was no internal function "to regularly review compliance with the control, regulatory and performance frameworks".

On the matter of risk management the report stated:"The management of currency and counterparty risk exposure at the PIC is not considered conducive to effective risk management procedures and the recoverability of certain investments may be in question."

 

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