South Yorkshire Housing Association Limited has breached economic standards over both its governance and financial viability, according to the Regulator of Social Housing, and as a result it has been downgraded to non-compliant G3 / V3 grades.
An investigation revealed weaknesses in SYHA’s internal controls framework and concluded that its board has not been managing the organisation with an appropriate level of skill, diligence, prudence or foresight.
Weaknesses in its financial governance has led to SYHA miscalculating its covenant compliance over a number of years. This has resulted in actual and forecast covenant breaches with one of its funders.
SYHA’s business plan demonstrates limited financial capacity in the short to medium term, and does not currently have adequate mitigation strategies in place to deal with plausible financial stresses.
In agreement with the regulator, SYHA is working to strengthen its financial capacity and improve its governance arrangements.
Harold Brown, Senior Assistant Director for Investigations and Enforcement at RSH, said: “Our investigation found serious issues of concern with SYHA’s financial processes and controls, resulting in breaches to its loan covenants. SYHA needs to address these issues promptly to ensure its long-term viability and covenant compliance, and we will continue to monitor the provider closely as it carries out this work.”
