The South Australian Community Housing Authority (the ‘Authority’ or ‘SACHA’) is established pursuant to the South Australian Co-operative and Community Housing Act 1991.
The Authority has a broad range of functions associated with the development, promotion and administration of community housing in South Australia. In performing these functions the Authority has the following main roles:
The provision of advice to the Minister for Human Services.
The registration of housing co-operatives and associations as provided for under the Act.
Ensuring the full and proper accountability of community housing organisations which receive funds or other support from the Authority or other public sector agencies.
The provision of administrative and other support services to community housing organisations.
The provision of funding, through either loans or grants, to community housing organisations.
The Authority comprises three representatives appointed by the Minister, including a representative nominated by the Community Housing Associations Forum Incorporated, members with expertise in finance, the housing industry or community housing, and two members elected by members of registered housing co-operatives.
The following charts illustrate the relationship between SACHA and the agencies which provide funding to it on one hand and the community housing organisations which receive funds from it on the other.
The first chart documents the overview of the relationships.
The second chart documents in more detail the relationship between the Authority and community housing organisations.
Funding to housing organisations increased by $25.5 million from an accumulated balance of $219.4 million.
The debenture indexation reserve reflected a net increase of $7.2 million.
Subsection 19(2) of the South Australian Co-operative and Community Housing Act 1991 requires the Auditor-General to audit the financial statements of the Authority.
The audit program covered all major financial systems and was directed primarily towards obtaining sufficient evidence to enable an audit opinion to be formed with respect to the financial statements and internal control.
During 1999-00 specific areas of audit attention included:
budgetary control and management reporting
accounts payable
staffing and related costs
receivables (including contributions from co-operatives and associations)
revenue, receipting and banking
loans (including program financing charges)
debenture and asset revaluation reserves.
Consideration was also given to the work of Internal Audit in framing the audit coverage.
Matters arising during the course of the Audit were detailed in a management letter to the Acting General Manager. SACHA’s audit committee of the Board noted the management letter and accepted management’s response. The satisfactory response was subsequently received by Audit. The comments provided to the Authority and the related responses include those summarised in ‘Audit Findings and Comments’ hereunder.
Audit noted that, although a full review of delegations had been undertaken with the assistance of the Crown Solicitor’s Office some twelve months ago, the relationship between delegations from the Minister pursuant to the South Australian Co-operative and Community Housing Act 1991 and the Authority’s internal delegations had not been clearly documented in relation to a number of matters.
The Authority indicated that this issue was being pursued with the Crown Solicitor’s Office and that in future, the Authority would seek annual approval of sub-delegations from the Minister where the Minister’s approval was specified under the Act.
Audit noted that the property database which contains information relevant to the monitoring of budgets for individual projects did not reconcile to the general ledger. As a result, all expenditure relating to a project may not be captured.
The Authority advised that it had intended to integrate the property database and general ledger during the current year but until the general ledger had been upgraded to be Goods and Service Tax compliant, it was not appropriate for the integration to proceed. The integration would now occur during 2000-01.
Pursuant to funding agreements between the Authority and CHOs, audited financial statements of CHOs must be provided to the Authority by 30 September succeeding the relevant financial year. The audited financial statements provide the Authority with reasonable assurance that the appropriate amount of capital is returned. The audited financial statements also provide the Authority with insight to the financial performance and viability of CHOs.
Audit noted that approximately 50 percent of CHOs audited financial statements for the 1998-99 financial year had not been received by 30 September 1999. Indeed, approximately 7 percent had not been received by 31 March 2000.
The Authority indicated that it had previously noted this matter and that actions to accelerate the provision of audited financial statements by CHOs had been initiated.
As required by subsection 36(1)(a)(iii) of the Public Finance and Audit Act 1987, the audit of the South Australian Community Housing Authority included an assessment of the controls exercised in relation to the receipt, expenditure and investment of money, the acquisition and disposal of property and the incurring of liabilities. The assessment also considered whether those controls were consistent with the prescribed elements of the Financial Management Framework as required by Treasurer’s Instruction 2 ‘Financial Management Policies’.
Audit formed the opinion that the controls exercised by the South Australian Community Housing Authority in relation to the receipt, expenditure and investment of money; the acquisition and disposal of property; and the incurring of liabilities, were sufficient to provide reasonable assurance that the financial transactions of the organisation were conducted properly and in accordance with the law
The net cost of services for the Authority increased slightly to $7.4 million ($7.3 million). Although contributions receivable from Community Housing Organisations rose by $0.5 million and interest rose by $0.6 million, this was offset due to the fact there were no donated assets during the year and there was an overall increase in operating expenses.
Grant income received by the Authority for the year was $30.2 million ($40.1 million) reflecting funding for both recurrent and capital purposes. The difference of $9.9 million compared to the previous year reflects the recognition of a receipt relating to the 1997-98 year in 1998-99.
Grant income for 1999-2000 exceeded the Authority’s net cost of services by $22.9 million ($32.8 million) and the surplus was applied to the provision of funding to housing organisations or held as cash.
During 1999-2000 CHOs made capital contributions of $5.2 million ($4.6 million) towards the cost incurred by the Authority in borrowing funds from the South Australian Government Financing Authority and HomeStart Finance. The level of capital contributions is determined as part of the process of assessing the rents payable by CHOs tenants and is subject to income tests. As a result of these rental subsidies, the capital contributions were insufficient to meet the Authority’s program financing costs which totalled $8.8 million.
The number of CHOs receiving funding from the Authority to acquire houses was 127. At 30 June 2000 there were 2971 (2832) properties that had been debentured and occupied and an additional 603 (422) properties that were being constructed, upgraded or in preparation for occupation. A further 19 (32) properties were held by the Authority which were surplus to the requirements of CHOs.
Funding to CHOs at 30 June 2000 was $244.9 million, an increase of $25.5 million reflecting, in the main, net additions to debentures of $11.6 million and a revaluation of the underlying properties by $10.0 million.
As at 30 June 2000, obligations under loan approvals for advances to individual CHOs totalled $29.1 million. Cash at Treasury and on hand, however, totalled $25.1 million. The higher level of commitments reflects the approval by the Authority, with the consent of the Department of Human Services, to commit in advance, some of the funding anticipated for the 2000-01 year.