Old AG report still reveals lessons for government
(CNS): The first report conducted by the Office of the Auditor General (OAG) into the local affordable housing scheme shows that government was warned more than eight years ago about the problems that can arise when it fails to follow due process. Reflecting on the report he wrote in August 2004, the former auditor general, Dan Duguay, told CNS that, as old as the report was, it still had some value to government. “There are still lessons to be learned of the dangers of going without proper procurements, which is a recent theme in government. It seems like sometimes government never learns,” Duguay said after the report was released following a freedom of information request by CNS.
The audit had been kept under wraps for so long because it was conducted before the relevant rules relating to the auditor general’s reports were altered to allow the office to release its work to the public a few days after being seen by the Public Accounts Committee members.
The report was finally examined by the parliamentary committee at its last meeting in September, when Dr Frank McField gave evidence to the committee and defended the way in which the project had been procured and the quality of the homes.
The current auditor general, Alastair Swarbrick, said that his office was not going to spend any considerable time going over the findings as it was some eight years old. However, he said that the issues raised by his predecessor in the old report are almost identical to those his office is still raising in the more recent reports relating to procurement.
Following its release, Duguay pointed out that it would certainly have been far more useful if his work had been issued earlier as the main problems could have been probed and resolved much quicker.
“It raised several important points but the most important one is that contracts were issued without tender. There is also good evidence that local contractors could have done a good job at nearly the same costs but they were not permitted to bid,” Duguay said.
He also pointed to issues concerning not adhering to building standards, which have unfortunately proven to be true as the homes are now rusting out.
The publication of the old report comes in the wake of news from the current National Housing and Development Trustthat the new homes currently being constructed under the initiative will no longer be sold but rented and the admission that building genuinely affordable homes in the Cayman Islands for those that cannot buy on the open market is impossible.
Plagued with problems from the get-go, the current NHDT boar chair Rayal Bodden and the general manager Julius Ramos said that these issues are now behind the trust. The men said that the public could rest assured that not only are the houses now being developed by the Trust up to standard but that the money it handles is also all accounted for.
“The NHDT has carefully considered recommendations of old audits and investigation reports and implemented effective systems to ensure proper checks and balances,” the officials said in a statement released Friday. “This has resulted in a good working relationship with the Auditor General’s Office for the past few years.”
The NHDT is also in the process of developing a new website that will include meeting minutes, financial statements, the publication scheme, NHDT’s public service information and application forms, as well as a “Homes-For-Sale” database.
In the meantime, the trust encouraged interested parties to make Freedom of Information requests to foi.nhdt @gov.ky
Retaled articles:
See AG's report here
See statement from NHDT below.
Category: FOI
Say it isn’t so, Elio, Say it isn’t so!
But I guess it so becacuse the the biggest UDP supporter is no longer calling the rrrrrrradio station singing praises to you!!!!!
"Overall, the NHDT has accomplished nothing more than a housing "scheme" which benefitted a few…"
Sounds to me like EVERY "project" the govenment has ever attempted…
The Old AG report will remain the old AG report and a reminder of our past mistakes not with our social policy but our assessment of what it costs to cure social woes left untouched for many years. Criticicism of Dr Frank deservedly in some respects has to be tempered by the fact that he took on a cause which others of the political ilk only daredto speak about but never had the cojones to implement. The Housing development start was really the only way that the conscience of those who went ahead of the pack in the booming periods and forgot where they came from could face the stark reality of political development and its pitfalls; do good and you will not be honoured, but do wrong and it will be discussed at large but eventually stop being talked about.
That the houses were not built of concrete and steel and that they were not recognized by the elite who went ahead in the boom, is a given, but that there were people who for the first time in their existence that could have a roof over their heads is something that runs through the veins of those who have been there and those who commend those who try. For those who try even in failure are respected because they have a Social conscience.
Just another example of the difference in intelligence thought and CIG action.
All government needs to do is skip all these contractors looking to make big profits hire one general .sub the work out to all the good masons and steelmen on the island that takes care of the structural and do the same for plumbing, electrical, carpentry ,etc and they save lots of money . oh but its government we are talking about saving wrong people sorry !
Look how well that has worked out in the past…The CIG forced Mike Ryan to use "local" contractors for every aspect of the construction of the RCGC. If you went on site during construction, all you saw were Jamaicans and Phillipinos…with the ration to Caymanians being about 50:1. In the new high school, same thing..the problem isn't about forcing the builders to use Caymanian contractors, its about the contractors using cheap, imported labor to boost their profits…
The NHDT did not learn any lessons from previous scandal because persons placed on the board were for political reasons and not because of their affordable housing wisdom. The NHDT has repeatedly failed in its mandate (Latest announcement proves it) but yet both UDP administrations have pumped 30 million dollars into homes that had to be built twice! Furthermore, they now insult the public by saying they cant build affordable homes for sale but plan to build affordable homes for RENT???? If the 30 million dollars had been divided amongst families who required a deposit (30K) to purchase a home for 300K, that would have equalled 1000 homes being purchased! it would have fueled a housing boom in this country and stimulated the local economy without having to give "dart-like incentives". Overall, the NHDT has accomplished nothing more than a housing "scheme" which benefitted a few while denying many hard working persons the opportunity for home ownership.
If someone can afford a mortgage on a 300K home then he or she is clearly not the target for an affordable housing initiative like the NHCDT originally envisioned. If you read the previous CNS article, the original lower quality homes were sold for $56,900 – $69,000 but the more well-constructed homes cost $97,500 – $114,000 and I wouldn't be surprised if the price is projected to continue climbing if Government decided to seek out more land and continue to build similar homes. If the current anticipated cost of building homes is considered too high to be "affordable" that clearly means ~100K is out of reach for the NHDT's target community of low income Caymanians. If that is the case, 300K is a pipe dream.
Further, the current NHDT currently has a programme to guarantee mortgages under 200K for first time Caymanian home buyers so they do not need a large downpayment. (Full disclosure – I personally went through this programme.) They don't give the successful applicants any cash, they just guarantee 35% of the mortgage so the bank will loan the money without the 5% – 20% down. Legal fees and other closing costs can even be included within the loan price if the total is not over 200K, so it is possible to purchase a home with little or no money up front if it is under a certain amount.
This is a great programme to help first time Caymanian home buyers purchase a home if they don't have enough cash saved up for a downpayment but can comfortably make the monthly payments to the bank. The $925 fee to the NHDT probably doesn't cover the administrative costs of processing applications and the mortgage guarantee is a always risk, but this approach definitely costs less than handing out 30K for people to buy 300K homes. Maybe the NHDT could even consider increasing its fee and raising the 200K cap to open up the range of properties that could be purchased, similar to how the stamp duty waiver cap is being revised, to stimulate the housing market at relatively low cost.
While I don't disagree with most of your assessment and the NHDT was clearly a disaster for many years, knowing the range of programmes that they offer (they also have one for people to build on land that they already own, for example) and seeing how they are now trying to think more critically about what they are doing and how they are doing it I think the current management and Board deserve more credit than you are giving them. Government has a tendency to continue hammering square pegs into round holes indefinitely (often in a very costly way as well) so it's refreshing to hear someone admitting that the original objectives just aren't being met the way that they've been doing things. And to also commit to trying to figure out a better way to do things. I personally wish them well.
Bullshit, I disagree with the below statement.
‘will no longer be sold but rented and the admission that building genuinely affordable homes in the Cayman Islands for those that cannot buy on the open market is impossible.’
Affordable homes can be built by locally Qualified contractorsand crews, all at an affordable price (I’m talking about the few good ones, not the many).
What’s holding back projects such as this and allowing others wanting to build affordable homes is the Unaffordable Price of Building Materials.
Remove the taxes, duties and tariffs on materials to build and finish a home and the impossible will become possible!
Think about it.
Yes, reduce government income. We have plenty of extra cash right now.
What you are really asking for is that the rest of us pay increased taxes to subsidise even further this programme.