NHT - Spent $1.07 Billion for Incorrect Property Acquired from NHDC (Now HAJ)

Auditor General's Findings

NHT acquired two parcels of land from National Housing Development Corporation [now Housing Agency of Jamaica] for $1.07 Billion at Point, Hanover and Ironshore, Saint James. NHT indicated that the acquisition of the properties was to boost NHDC’s liquidity. However, NHT’s failure to complete the requisite verification resulted in its purchase of the incorrect parcel of land at Ironshore. Both parcels of land were characterized by steep slopes which would result in high development costs.

Permanent Secretary (current): Audrey Sewell

Breach Category: Resource Management

Permanent Secretary (at breach):

Breach Type: Inadequate Feasibility Assessment Prior to Acquisition

Status: Full Compliance

Last Assessed: April 13, 2018

Year Reported: 2015

Year Resolved: 2015

Recommendation

In keeping with its responsibility under Section 6 of the Public Bodies Management and Accountability (PBMA) Act, the Board should take the necessary steps to enhance its due diligence process undertaken prior to investments and acquisition of land so as to maximise return on investment and ensure that all properties acquired are suitable for housing development. This due diligence should include an appraisal of all investment opportunities to determine, at a minimum, the cash flow impact and the expected rate of return on the investment.
The Board should also ensure that there is a robust records management system to provide evidence of the due diligence undertaken.
NHT’s Board should instruct management to develop an action plan for all properties that deemed unsuitable for affordable housing development.

JAMP Update

The NHT has reviewed its systems and processes. All investments that are being considered beneft from intense scrutiny and all decisions will demonstrate: