PHILIPSBURG: --- The General Audit Chamber, in a review of the government’s office housing policy, has unveiled glaring flaws in its management of office accommodations, highlighting a lack of structured planning, financial inconsistencies, and an inability to meet cost-saving targets, on page 10 of the Housing Policy report of December 2024 it states both the Prime Minister Dr. Luc Mercelina and his Secretary General refused to respond to the Audit Chamber report.
EPILOGUE
On December 13, 2024, as part of our audit protocol, we offered the Minister of General Affairs the opportunity to respond to this report. In our correspondence, we stated that if no response was received, it would indicate that the party involved does not wish to make use of this opportunity. The report would then be finalized. We have not received a response from the Minister. At an earlier stage, the Secretary-General was offered a similar opportunity. No response was received in that instance either. The absence of responses to both the draft report and the final report raises questions about the engagement and transparency of the parties involved. As the General Audit Chamber, we emphasize the importance of an open and constructive dialogue to enhance the quality of policy development and implementation. Failure to respond to our report can be interpreted as a missed opportunity to clarify any uncertainties or provide additional information. We call on the Minister of General Affairs to take active steps to address the recommendations in this report. These recommendations have been designed with the aim of achieving a more efficient and cost-conscious housing policy. We are confident that, with the right focus and commitment, the proposed improvements are attainable and can contribute to a more sustainable and efficient use of public resources.
The General Audit Chamber report can be found on its website. The findings stem from the "Mini Audit Review on Government's Office Housing Policy," which assessed the progress of recommendations issued in previous audits from 2021 and 2022. The report paints a troubling picture of inefficiency, missed opportunities, and inaction.
Absence of a Structured Policy
One of the report's most critical findings is the absence of a well-defined and actionable office housing policy. While the Ministry of General Affairs claimed to have a general policy in place as far back as 2018, auditors found that the policy lacked the detail and focus needed to manage government accommodations adequately.
The lack of a structured policy has made it nearly impossible to evaluate key questions, such as whether renting or owning office space is more cost-effective. Without clear guidelines or a comprehensive database of government-owned and leased properties, decisions about office housing have been made without sufficient analysis, leading to inefficiencies and a lack of accountability.
Failure to address this fundamental issue has created a domino effect of challenges, including the inability to track occupancy rates, identify cost-saving opportunities, and manage resources effectively.
Unachieved Cost Reduction Targets
The government's inability to achieve its ambitious cost-saving target of a 20% reduction in rental expenditures by 2025 has also been scrutinized. The goal, outlined in the 2020 Country Packages as a condition for financial support during the COVID-19 pandemic, required significant reductions in rental costs over a five-year period. However, the data tell a different story.
Between 2020 and 2022, rental costs rose from ANG 17.2 million to ANG 19.3 million, showing no signs of the downward trend needed to meet the cost-reduction benchmarks. Meanwhile, critical milestones for achieving the goal—including an inventory of government properties and efforts to consolidate or terminate costly leases—remain delayed. The lack of leadership within the Facilities Department has further compounded these challenges, stalling progress and undermining the feasibility of the reduction target.
The audit report is unequivocal in its assessment: achieving the goal of a 20% reduction in rental costs by the 2025 deadline is unlikely, given current spending trends and the government's inaction.
Financial Discrepancies Raise Concerns
Serious questions about the government’s transparency and accuracy in financial reporting have also been raised. The audit identified discrepancies between audited financial statements and budget amendments, eroding confidence in managing office housing expenditures.
For instance, the 2022 Financial Statements reported validated rental costs of ANG 19.3 million. Yet, the 2024 budget amendment listed a significantly lower figure for 2022 rental expenses, without any explanation for this difference. Such inconsistencies doubt the reliability of financial forecasts and hinder effective oversight and accountability.
The report warns that failing to align budget amendments with audited figures creates a distorted picture of financial health and undermines stakeholder trust.
Failure to Implement Past Recommendations
Perhaps most damning is the government's failure to act on the recommendations from previous audits. The 2021 "Mini Audit" and the 2022 review on rent reduction provided clear and actionable steps to address inefficiencies, including negotiating with landlords to lower rental costs, creating a multidisciplinary task force, and establishing a robust database to track properties and expenses.
Shockingly, little to no progress has been made on these fronts. Despite their willingness to reduce rents, the report found no evidence of structured negotiations with landlords. Furthermore, the suggested working group to review and implement office housing policy improvements was never established.
These missed opportunities are emblematic of broader governance issues. The lack of follow-through jeopardizes the achievement of cost-saving goals and signals a troubling disregard for accountability and transparency.
Calls for Urgent Action
The report concludes with a strong call to action, urging the Minister of General Affairs to address its recommendations promptly. It emphasizes the need for a comprehensive and structured office housing policy, improved financial reporting, and immediate steps to reduce rental costs.
The continued absence of action risks perpetuating the inefficiency and mismanagement cycle, further straining public resources. With the deadline for the 20% cost-saving goal rapidly approaching, time is running out for effective intervention.
The findings serve as a wake-up call for the government to prioritize fiscal responsibility and accountability. Without swift and decisive action, the shortcomings in office housing management could have lasting economic and social consequences.
