Why we are engaging with Cadder Housing Association Ltd (Cadder)
We are engaging with Cadder about its governance and financial management.
In May 2022, Cadder instructed an independent investigation following receipt of potentially serious allegations.
The independent investigation upheld some of the allegations, including that there was failure to operate within respective governance roles, a lack of transparent decision making, weaknesses in procurement and management of conflicts of interest. The report also identified the need for improvement in the strategic management of Cadder’s Community Centre to achieve its reopening and ensure future financial viability.
Cadder developed an action plan to address some of the areas of weakness and has progressed a number of improvement actions, including commissioning an independent governance review and co-opting three new governing body members.
In September 2023, Cadder provided us with a feasibility study and business plan relating to its Community Centre which reopened in November 2023. We are engaging with Cadder regarding the business plan to seek assurance about the Community Centre’s future financial viability.
Cadder’s 2023 Annual Assurance Statement identified areas of non-compliance with regulatory requirements including the Regulatory Standards of Governance and Financial Management (the Standards) and confirmed it had developed an action plan to address the non-compliance.
Our assessment is that Cadder does not comply with the Standards, specifically, Standards one and six. We also have concerns abouts its compliance with Standard three in relation to the financial management of the Community Centre.
In March 2024, Cadder provided us with the outcome report of the independent governance review. We are considering the outcomes of the review and engaging with Cadder about the findings.
Cadder is working constructively and openly with us.
The Housing (Scotland) Act (2010) requires us to monitor and assess the financial well-being, governance and performance of each Registered Social Landlord (RSL).
Our current assessment is that Cadder is non-compliant and is working towards compliance with the Regulatory Standards of Governance and Financial Management. We set out below the information that Cadder must provide in order to assure us that it can achieve compliance.
What Cadder must do
Cadder must:
- send us monthly updates on progressing the action plan to address non-compliance with the Standards;
- send us quarterly management accounts, accompanying reports and minutes within one month of each quarter end on an ongoing basis;
- send us by 31 May 2024:
- management accounts, accompanying reports and minutes for the Community Centre as at 31 December 2023 and 31 March 2024.
- send us by 30 June 2024:
- an updated business plan and projections for the Community Centre, setting out a strategy that ensures its financial viability.
What we will do
We will:
- review the monthly updates on progressing the action plan to address non-compliance with the Standards and engage as necessary;
- review the report on the independent governance review and engage as necessary;
- review the quarterly management accounts, accompanying reports and minutes and engage as necessary;
- review the management accounts, accompanying reports and minutes for the Community Centre as at 31 December 2023 and 31 March 2024 and engage as necessary;
- review the updated Community Centre business plan, projections and strategy to ensure its financial viability and engage as necessary;
- review our regulatory status in the light of this; and
- update our published engagement plan in the light of any material change to our planned engagement with Cadder.
Regulatory returns
Cadder must provide us with the following annual regulatory returns and alert us to notifiable events as appropriate:
- Annual Assurance Statement;
- audited financial statements and external auditor’s management letter;
- loan portfolio return;
- five year financial projections; and
- Annual Return on the Charter.
It should also notify us of any material changes to its Annual Assurance Statement, and any tenant and resident safety matter which has been reported to or is being investigated by the Health and Safety Executive or reports from regulatory or statutory authorities or insurance providers, relating to safety concerns.