IN a performance audit report today (June 27) ACT auditor?general Dr Maxine Cooper has highlighted two significant challenges with the Public Housing Renewal Program.

Dr Cooper says the two key risks that are particularly challenging are delivering the program by June 30, 2019, to allow the ACT government to receive all the anticipated Asset Recycling Initiative payments from the Australian Government; and achieving the estimated sales revenue from the sale of the public housing sites.

“There are significant challenges associated with the identification and delivery of replacement public housing dwellings, which may limit the relocation of tenants in a timely manner to allow existing sites to be sold to achieve the June 30, 2019 deadline,” she says.

Dr Cooper calls for estimated sales to be based on professional property valuations and supported by sensitivity analysis instead of simply adding a percentage to valuations after the audit found that initial assumptions associated with expected sales revenue were overly optimistic.

30 per cent was added to property valuations, for the purpose of estimating sales revenue for a financial model used to inform Business Cases that were prepared up to February 2016 to inform decision?making. Overall, revenue from the sale of public housing assets to date has been lower than anticipated, although the recent sale of one precinct has been higher than anticipated.

“There is also a risk that if properties are sold in a compressed timeframe this will affect the sales returns achieved,” Dr Cooper says.

While risks have been identified in the audit that will be challenging, it was also found that governance and administrative arrangements for the Public Housing Renewal Program are sound and the program is being effectively managed.

“‘Tenants’ relocation needs and preferences have been effectively recognised and managed by Housing ACT. The relocation process has been welcomed by some tenants but not others, with some tenants finding it problematic while others have not,” Dr Cooper says.

Minister for Housing and Suburban Development Yvette Berry says the report’s three recommendations go to reporting and modelling under the program and the government will respond formally to each one. 

“The renewal program is on track to provide 1288 new public housing dwellings by 2019,” she says.