AG red flags Ingonyama’s board



The Ingonyama Trust Board (ITB) has been hit with an adverse audit finding by the auditor general for the 2018-2019 financial year, for failing to meet accounting standards and account for assets valued at R24-billion.

The ITB has also been ordered by Parliament’s land reform portfolio committee to provide a breakdown of all funds it has paid over to communities living on land under its control for the past five years — to prove that it is benefiting them as intended.

The Trust collects rentals from commercial and residential tenants, which are meant to be disbursed to local communities, with 10% being retained by the ITB.

On Wednesday, ITB chairperson Jerome Ngwenya appeared before the committee to answer questions about the entity’s annual report.

The ITB, set up in 1994, administers 2.8-million hectares of rural KwaZulu-Natal on behalf of King Goodwill Zwelithini, the sole trustee. The ITB is funded by the land reform department, whereas the portfolio committee exercises oversight on its performance.

Parliamentary and presidential panels have recommended the reform or repeal of the Trust, sparking a fightback by the monarch and the ITB.

Its programme to convert residential permission-to-occupy certificates into leases is currently the subject of a high court challenge by tenants and civil society organisations.Thiswill be heard in November.

Committee chair Mandla Mandela told Ngwenya the committee wanted a report of all funds ploughed into traditional councils and communities over the past five years.

The committee heard that, of the R20-million allocated for traditional council training and other initiatives for the current financial year, only R700000 had been utilised.

In his report, which forms part of the ITB annual report, auditor general Kimi Makwetu found that the ITB’s financial statements “misstated” its financial position by failing to meet either recognised accounting standards or the Public Finance Management Act (PFMA).

The Trust also “failed to properly account” for property, plant and equipment valued at R24.4-billion and did not recognise expenditure of R320-million relating to municipal property rates. This resulted in an understatement in expenditure and an inaccurate depiction of the Trust’s financial position.

Irregular expenditure of R1.9-million, which had not been disclosed, was subsequently condoned by ITB management “without any investigation or proper approval”.

Makwetu said that the ITB had failed to correct errors in the consolidated financial statements or provide supporting records, resulting in the adverse opinion, the second in successive financial years.

Other irregularities included:

  • Goods and services under R500000 were procured without the quotations required by treasury regulations;
  • Work was given to service providers who were not tax compliant;
  • Contracts were extended and modified irregularly; and
  • Tenders were filled without being advertised properly and given to contractors who had not provided declarations that they did not work for the state.

In his response to the auditor general, Ngwenya said that the ITB was not governed by the PFMA, but rather by the financial regulations contained within the Ingonyama Trust Act, by which it had abided.

Ngwenya said the auditor general had “conflated” the financial statements of the ITB and the Ingonyama Trust, as the two were separate entities, for the second successive financial year.

Ngwenya said the Trust was not a listed public entity and did not receive funding from the state.

“The Ingonyama Trust is neither a constitutional institute nor a government department … [and] is only associated with the state by virtue of being created by statute, nothing more and nothing less. As a result it is bound to be administered in accordance with the founding legislation.”

Ngwenya said the finding by the auditor generalaboutrates was “erroneous” and caused by unlawful claims by municipalities.

Irregular expenditure would, he said, be “closely monitored” and “will be at minimal in future years”.

Paddy Harper
Paddy Harper
Storyteller and blag artist.

South Africa could use a communist party

The SACP is not building socialism, or even social democracy. Sadly, it has become just another party advancing the politics of patronage

Netflix and the smash hit tax dodge

‘The Laundromat’ is a film about corporates and the superrich using tax havens, something the streaming service itself allegedly excels at

Press Releases

MiX Telematics enhances in-vehicle video camera solution

The company has launched the gold MiX Vision Bureau Service, which includes driver-coaching tools to ensure risky driver behaviour can be addressed proactively and efficiently.

Boosting safety for cargo and drivers

The use of a telematics system for fleet vehicles has proved to be an important tool in helping to drive down costs and improve efficiency, says MiX Telematics Africa.

Silencing the guns and firearms amnesty

Silencing the guns and firearms amnesty

Gender-based violence is an affront to our humanity

Gender-based violence is an affront to our humanity

UK-Africa investment summit 2020: Think Africa Invest SA

UK-Africa investment summit 2020: Think Africa Invest SA

MTN unveils TikTok bundles

Customised MTN TikTok data bundles are available to all prepaid customers on *136*2#.

The changing role of marketing

Marketing is an exciting discipline, offering the perfect fit for individuals who are equally interested in business, human dynamics and strategic thinking. But the...

Upskill yourself to land your dream job in 2020

If you received admission to an IIE Higher Certificate qualification, once you have graduated, you can articulate to an IIE Diploma and then IIE Bachelor's degree at IIE Rosebank College.