Land Reform Minister Thoko Didiza, under whose portfolio the ITB falls, told parliament last week that she was in discussions with the board’s leadership over the “deficit budget”, which she had not allowed them to present because this was “not advisable”.
The parliamentary land reform portfolio committee will carry out an oversight visit at the Ingonyama Trust Board (ITB) after the troubled public entity failed — for the second time — to present its budget for the 2022-23 financial year to parliament.
Last week, the portfolio committee rejected the annual performance programme submitted to parliament after the ITB failed to provide an accompanying budget for the year because of a budget deficit.
After a heated discussion with the ITB chairperson, Jerome Ngwenya — who accused them of being ignorant of the entity’s functions — committee members resolved to carry out the oversight visit and have discussions with the board to deal with its failure to comply with auditing and financial management standards.
The entity is funded to the tune of R24-million annually by the land reform department but, along with the Ingonyama Trust, whose land it administers, has an operating budget of just under R100-million a year. It takes in about R90-million a year in revenue from commercial leases and mining and other rights it collects on behalf of the Ingonyama Trust.
The Ingonyama Trust was formed in 1994 by the KwaZulu bantustan ahead of the first democratic elections to administer traditionally controlled land on behalf of King Goodwill Zwelithini ka Bhekuzulu.
The ITB was set up to administer the almost three million hectares of KwaZulu-Natal on behalf of the trust in 1997.
Land Reform Minister Thoko Didiza, under whose portfolio the ITB falls, told parliament last week that she was in discussions with the board’s leadership over the “deficit budget”, which she had not allowed them to present because this was “not advisable”.
Didiza said a budget would be “shared” with the portfolio committee “as soon as the discussions have been concluded with the board on the matters we have been raising with them in respect of their finances”.
Didiza said although it was “highly irregular” for the ITB not to present its budget, it would have been “even more irregular for the minister to have approved a deficit budget without understanding why we are here and why we are having this situation”.
Didiza said that, thus far, the reports received from the ITB on the matter “had not exactly satisfied what we discussed” and further discussions were taking place.
The sitting board is a temporary one appointed by Didiza after the previous board’s term had expired. It is set to be replaced by a permanent board, whose members are being recruited through a public process. The board’s chairperson is nominated by the Zulu monarch.
Its financial management has brought Ngwenya into conflict with the portfolio committee and the auditor general, which has issued a series of qualified audits to the entity for its failure to comply with public financement management regulations.
Didiza has seconded senior staff from her department to assist with the running of the ITB, which has recently set up an investment wing, Ingonyama Holdings, into which more than R45-million has been paid in the last year.
Ngwenya and former ITB chief executive officer Lucas Mkhwanazi are the directors of Ingonyama Holdings, which operates out of the ITB headquarters in Pietermaritzburg.
ITB chief executive Vela Mngwengwe told the portfolio committee that the ITB “does far less than it is meant to” because of historical underfunding and its organisational development, but that the deployment of staff from the department had assisted to a point in improving its administration.
MPs were scathing in their response, with Ntako Matiase describing the presentation as a “non-report” and a “great disappointment”.
Matisse said the portfolio committee’s decisions and recommendations were “not taken seriously” by the ITB leadership, which “must be sent back to do its work”.
“We recommended that a forensic investigation should be undertaken into the affairs of the ITB. That hasn’t been done. If no action is taken, no consequence management is applied in instances such as this, we promote a culture that we have seen in the Ingonyama Trust; a culture of disregard of the law, of disregard of anything that has got to do with the work of the portfolio committee,” Matiase said.
Ngwenya told committee members that they had been criticising the ITB “for no apparent reason” as there was a deficit every year because the entire allowance from government was spent on salaries.
Although the ITB received about R24-million a year, its salary bill stood at R2.7-million a month, which meant the trust had subsidised its operating costs, which came to about R100-million a year.
“All the money the government throws to the ITB does nothing more than pay the saff, which still requires a shortfall to be met,” Ngwenya said. “This deficit is not for the first time. There has always been a deficit.”
Ngwenya then accused MPs of being ignorant about the ITB’s role. “I don’t think any of the members here know what the ITB and the trust are doing and are meant to do.”
He said revenue due to the ITB was being collected by the cooperative governance ministry in the province and, as a result, the entity was battling because “we do not have custody of the money”.
“Cogta [cooperative governance and traditional affairs department] needs to understand it is not its money it is keeping. The money it is withholding must go back to the respective communities,” Ngwenya said.
Turning to the forensic audit, he said the ITB had no money to pay for one.
Didiza said the oversight visit should also focus on whether the ITB was playing the role that had been envisaged when parliament passed the amendment creating the board to act on behalf of the trust.
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