Estate Agency Affairs Board welcomes forensic audit
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The Estate Agency Affairs Board (EAAB) has welcomed the forensic audit instituted by the Minister of Human Settlements, Water and Sanitation into its affairs, and says it has, in fact, reached out to the Director General to “move the matter forward”.
While the Board does not know the reasons for the forensic audit – which was called for on March 1, it is confident that all its affairs are in order and will “fully cooperate” with the process.
In a media statement on the matter, chairman Nkosinathi Biko notes that the Auditor-General has been the EAAB’s auditor since 2018, and received a “clean audit” in the most recent financial year.
“In 2018 the Board sought the Minister’s concurrence in taking the audit function to the Auditor-General – the public auditor of last resort. Accordingly, the A-G has now been our auditor for the past two financial years.
“This decision by the Board was designed to improve the accountability of the institution and to be able to provide improved assurance to the public.”
Biko says the EAAB received an unqualified audit in the 2018/2019 financial year and a clean audit, “the highest achievement in the audit process”, in the 2019/2021 financial year.
“The Board is thus assured by the Auditor-General and has in turn reported to the Minister and Parliament accordingly.”
Minister Lindiwe Sisulu informed the EAAB at the beginning of the month that she had instructed the Department to conduct a forensic audit into the following areas of the Board’s activity over the past 24 months:
• An audit of the Estate Agents Fidelity Fund, including all transactions and investments done and processes followed;
• Appointment of EAAB staff and processes followed;
• Tenders awarded by the EAAB and procurement processes followed; and
• All legal matters attended by the EAAB and how they were paid.
This audit comes on the back of legal action that has been instituted against the Board by the Real Estate Business Owners of South Africa (Rebosa) to try and force it to issue outstanding Fidelity Fund Certificates to qualified agents.
The audit, says Rebosa chairman Tony Clarke, could “become the catalyst needed to transform the EAAB into the positive force it was supposed to be”.
Rebosa is also hopeful that the audit will “finally reveal the root of the regulatory body’s service delivery issues”.
“We hope that the minister will allow transparency in its audit findings and make such available to Rebosa.”
Meanwhile, the legal matter between Rebosa and the EAAB was heard yesterday but the judge did not give a date for the outcome of her deliberations.
It is hoped, however, that this could be as soon as next week.
Clarke explains that, after “exhausting all other options to rectify ongoing service delivery issues” from the EAAB, Rebosa had to "officially engage in this legal action against the regulator, signalling much needed hope for hundreds of estate agents around the country still struggling to get their FFCs for 2021”.
The outcome is urgent as the Property Practitioners Bill – which states that attorneys will be prohibited to pay an agent without first checking that the agent has a valid FFC, will come into effect next month.
“Presently without current FFCs, qualified property practitioners choose between committing a criminal offence by working as usual, or not earning a single cent in income until the EAAB gets its act together,” Clarke says, adding: “It’s an untenable situation. Resolving it must be our primary focus for now.”