A company which National Social Security Authority (NSSA) allegedly awarded a contract to build houses without following due process has rejected BDO Zimbabwe Chartered Accountants forensic report, calling the auditor’s manner of job incompetent and flawed.
NSSA, on 14 July 2017, gave Housing Corporation Zimbabwe (HCZ) US$16 million to build 8000 houses in Caledonia but none of the buildings has been constructed according to the report.
“The report contains several falsehoods as regards to HCZ,” the housing company says in a statement. “These untruths are attributable to the incompetent manner in which BDO conducted its forensic investigation and in arriving at its conclusions.”
“The absence of an in-depth probe includes ignoring critical information that would have assisted the investigation with accurate facts.”
HCZ says all the appropriate governance protocols were followed ahead of signing the off-take agreement as approved by the investment committee and the full board of NSSA.
“The Caledonia Housing Project was compromised – not because of any action or inaction by HCZ, not because alleged procurement processes were not followed – but because of NSSA’s own failure and inability to manage the project. It was NSSA’s repeated material breaches of the off-take agreement which entitled HCZ, to legally terminate the agreement and claim damages. In arbitration, these repudiatory breaches by NSSA justified an award to HCZ as an entitlement to damages suffered,” the housing company’s statement says.
“Contrary to the assertion that no investment appraisal was performed, an extensive investment memorandum was submitted as part of the proposal to NSSA which informed the negotiations and subsequent due diligence processes that were undertaken.”
“NSSA did not suffer any price prejudice as claimed in the report. In this regard, NSSA have in their possession an independent expert assessment from ABACUS Construction Cost Consultants (Pty) Ltd, which affirmed the appropriateness of the price charged per unit. BDO failed to appreciate the variance in specifications and project scope that totalled the costs per unit when comparing against other housing projects.”
The BDO report says key processes that were not done by NSSA before awarding the housing contracts included not going to tender, non-performance of due diligence on prospective contractors, non-evaluation and non-evaluation of investment proposals.
HCZ says it is considering Instituting legal proceedings to seek relief against areas of the report that are not truthful and are harmful to the reputation of HCZ and its management.
The company is also considering to provide the Zimbabwe Anti-Corruption Commission (ZACC) with a dossier detailing the process leading up to the signing of the housing off-take agreement between NSSA and HCZ.
The housing company is also taking into consideration submitting grievance statements to relevant regulatory and oversight bodies within the Chartered Accounting and Audit profession on the conduct of BDO during the investigation.