Nicosia, Cyprus. Auditor-general Andreas Papaconstantinou said on Tuesday that the housing finance agency’s failure to implement a new banking information system amounted to a serious strategic breakdown. He said delays, weak oversight and unlawful decisions increased costs and left the organisation technologically exposed.
Audit findings and project timeline
In a special audit report, Papaconstantinou said the project, due for completion by January 2021, had not been delivered five years later, despite costing the public millions.
The contract, worth €10.2 million, was signed in January 2019 for the supply and installation of a new banking information system, with two years allocated for delivery and a further nine years for operation and maintenance.
Dependence on external provider
The project aimed to end the organisation’s dependence on the national asset management company, Kedipes, which the audit report said had not been achieved.
Papaconstantinou said prolonged delays had entrenched dependence on external providers and imposed heavy costs on the public purse.
Administrative issues and subcontractor problems
According to the audit service, problems with a subcontractor, combined with serious administrative gaps at the housing finance agency, derailed the project early.
Papaconstantinou said the situation was worsened by the incomplete formation of the board of directors and the failure to appoint a general director, adding that these weaknesses affected the timely adoption of corrective decisions.
Contract termination and amendment
Efforts to replace the subcontractor did not succeed. A notice of termination was sent to the contractor in October 2023, almost three years after the original deadline, but the contract was never terminated.
In December 2024, the agency approved an amendment that fundamentally changed the contract’s scope.
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