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Crisis deepens at the EAAB

The Estate Agency Affairs Board is still experiencing a crisis that seems to deepen even more after the removal of the acting CEO, Bryan Chaplog and the company secretary, Nkululeko Ndebele.

After a draft audit’s outcome was revealed the board of the Estate Agency Affairs Board (EAAB) called for an emergency meeting on Thursday night to discuss the consequences of the report. The audit revealed irregular, fruitless and wasteful expenditure and also non-compliance with sections of the Public Financial Management Act (PFMA).

It was said that at the meeting Chaplog was replaced by Clive Ashpol, also in an acting role, after members had decided to “expedite his exit.”

Chaplog’s absence from the meeting on Thursday night was the straw that broke the camel’s back and the resolution was passed with an overwhelming majority.

Ndebele was present at the meeting but the complaints was also stacked against Ndebele, suspension was on the grounds of dereliction of duty and insubordination.

A final audit report is expected to be presented on July 25.

The Department of Human Settlements said it would only be in a position to comment on the latest developments once it had been briefed by the board.

In terms of the replacement of the CEO, the EAAB said in an official statement issued on Friday afternoon that the board had been acting in accordance with the relevant EAAB policy limiting the amount of time that any one person may hold a functional position in an acting capacity.

“…It has become necessary for the Board of the Estate Agency Affairs Board (EAAB) to rotate the office of Acting Chief Executive Officer. Mr Bryan Chaplog, who has been performing this function for the past number of months, will, accordingly, forthwith resume the substantive position of Chief Financial Officer of the EAAB. Mr Clive Ashpol, the Executive Manager: Education and Training, has, in addition to his usual functions, been appointed as Acting Chief Executive Officer,” the official statement said.

It concluded by saying: “It is hoped that, the relocation of the EAAB from the Department of Trade and Industry to the Department of Human Settlements having been completed, the appointment of a permanent incumbent to the position of Chief Executive Officer of the EAAB will be expedited. The EAAB trusts that the selection process for the making of a permanent appointment, which had already commenced under the DTI, can now be finalised without any further delays.”

Audit report objections

A special meeting of the board was convened after the circulation of the draft audit report to members. It’s understood that several objections were raised to it but that many of the issues raised were deemed relevant.

Among them was the payment of a R3m settlement to former CEO, Nomonde Mapetla, who left the institution under a cloud in March 2011.

Other expenditure mentioned in the report as “irregular, fruitless and wasteful” was R1.29m forfeited for paying a deposit on a building of which the contract was subsequently cancelled; the appointment of, and payment for, the services of a media company which was not in accordance with policy; fees for a forensic audit; and two amounts of R775 001 and R194 251 paid respectively in terms of CCMA agreements.

The report said the expenditure could have been prevented had the proper controls and processes been adhered to. It also lambasted the EAAB for what it said was the failure to institute disciplinary proceedings against officials who had allowed the above mentioned payments to take place.

The report also claims allegations of a breach of fiduciary duties were not investigated involving the pardoning of an estate agent who had allegedly misappropriated trust monies.

The EAAB has limped from one crisis to another for more than a year now with the dti being unable to resolve the crisis there before its guardianship was shifted to Human Settlements. Board members have lamented a lack of interest from the latter saying a scheduled meeting with its DG had recently been cancelled with no indication of a follow-up any time soon.

The behind-the-scenes shenanigans, judging from e-mails and other correspondence flying to and fro, indicate an organisation in deep distress and in need of serious intervention.

Big players in the real estate industry have constantly bemoaned the state of affairs at the EAAB over the past year or so, but seem reluctant to speak out publicly for fear of reprisals.

?(Moneyweb)


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