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Catalyst downgraded by regulator following management breaches
Catalyst Housing Group has been downgraded by the regulator following breaches in the management of its sales and marketing team.
The 21,000-home association reported itself to the Homes and Communities Agency (HCA) at the end of last year following “unacceptable breaches of our management processes and controls in sales and marketing”, an internal note from chief executive Rod Cahill, which was seen by Inside Housing, revealed.
The regulator has now moved Catalyst from the highest governance rating – G1 – to the next level down – G2.
The regulator said there had been allegations of “staff misconduct” and “financial impropriety” in the association’s sales and marketing team. Catalyst “responded appropriately” to the allegations by commissioning internal and external investigations, and these upheld the allegations of misconduct.
The reports from the investigations uncovered some “weaknesses” in Catalyst’s management processes and controls, the regulator said, “particularly relating to the procurement of services and fittings and sales to connected parties”.
The board has developed an action plan to improve its risk and performance management and internal control frameworks “in order to strengthen the protection of social housing assets and the group’s reputation”.
The regulator said “at this time” there is no indication the issues identified extend to other teams in the organisation but Catalyst is overseeing further work to confirm this.
Mr Cahill’s note to staff said the breaches were “completely unacceptable” and the association would “immediately introduce a number of measures to ensure that this area of Catalyst, and all parts of our business, have exemplary controls so nothing like this will ever happen again”.
A spokesperson for Catalyst Housing Group said: “The HCA recognised that the Catalyst board were fully informed and appropriately involved and we had responded promptly to the issues, implementing a plan to put these right.”
He added: “We are committed to returning to a G1 as swiftly as possible and believe we have already taken many of the steps necessary to ensure this can happen, and are keeping the regulator informed as we make changes.”
Update: at 10.05am, 25.01.17
This story has been updated following the HCA’s announcement of a regulatory downgrade.
