Published Friday, 06 July 2012
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Housing Executive probed
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The report raised queries about "questionable land deals" that were sold to buyers given "favouritism" that were approved on wrong or incomplete information and without proper valuations.
Approximately 20 of the lucrative deals have been referred to the Counter Fraud and Security Unit and three to the PSNI, with 11 more to be considered.
The report also revealed that contractors carrying out a kitchen replacement scheme in houses for the Housing Executive were overpaid by half a million pounds.
The work carried out at this cost was found to be poor, some faults included cupboards attached before plaster had dried and meter boxes not fire-line properly.
The Audit Office said the overspend was detected in a review of only five out of a total 112 projects, so the final figure overpaid could be much higher.
The report said that the contractor, Red Sky, had its contracts terminated in July last year by the Housing Executive, who withheld payments amounting to the £500k overpaid by them.
After the company went into administration, the deductions were queried and the Housing Executive had to seek legal advice.
No action has yet been taken to recover the potential overpayment nor have other similar schemes been examined to determine if there is further potential for overpayments.
The extent of overpayments was disputed by the Housing Executive and investigations were continuing at the time of the audit. On Monday chief executive Brian Rowntree resigned from his position.
Social Development Minister Nelson McCausland criticised the organisation on Tuesday for not acting quickly enough to resolve concerns about its conduct which were raised at an earlier stage.
Another contractor was given £250,000 for uninspected work at a time when it was already subject to claims it had been wrongly overpaid by £240,000.
"I am very concerned that the Housing Executive made such a large payment in advance to a contractor that it was investigating in relation to potential overpayments and that it did not seek approval of this unusual transaction from the Department (Department for Social Development) or DFP (Department of Finance and Personnel)," Auditor General Kieran Donnelly said.
The Housing Executive has said that by June this year just over £230,000 had been recovered, with arrangements in place to recover a further £16,000.
Levels of fraud and error in housing benefit were also probed, the extent of which costed the taxpayer over £10 million last year. The report said tenancy fraud, where someone falsely holds social housing tenancy, is a major area of concern.