Ingonyama Trust salaries rise by 45% in just two years

The Ingonyama Trust, which administers tribal land under communal tenure in KwaZulu-Natal, has been slapped with an adverse audit opinion by the office of Auditor-General (AG) of South Africa.

Parliament’s portfolio committee on agriculture, rural development and land affairs dealt with the trust’s annual report for the 2019/20 financial year – a report which proves that one of South Africa’s most infamously managed public entities has not moved into calmer waters at all.

The trust’s board now finds itself in a position where its liabilities outstrip its assets even as it faces sky-rocketing personnel costs. Whereas in the 2017/18 financial year the employee cost to company stood at R21.9 million, by 2019/20 it had increased to R31.9 million – an increase of a whopping 45.6% in just two years.

Much as the increase in personnel costs seems excessive, the real problem over the years has been the eye-watering amounts red-flagged as concerns by the AG regarding the trust itself.

This week, the affairs of the board and the trust it administers were dealt with separately.

ALSO READ: ‘This finding is wrong’ – Ingonyama Trust Board disputes AG’s qualified audit opinion

Many of the issues raised are rooted in controversies years in the making.

The Ingonyama Trust was founded in 1994, just before South Africa’s first democratic elections, amid fears among Zulu traditionalists, historically aligned with the Inkatha Freedom Party (IFP), that an ANC-dominated national government might undermine the traditional Zulu land tenure system.

The Ingonyama Trust Act therefore entrenched that system, vesting control of an area roughly corresponding with the erstwhile homeland of KwaZulu to be administered by the trust, on behalf of the Zulu nation, represented by the Zulu king.

Land tenure system

The land tenure system is administered by amakhosi (tribal leaders) and izinduna (advisors), who administer the granting of tenure and agricultural rights to the inhabitants of the area under the control of the Ingonyama Trust.

The system, though feudal on the face of it, does not vest ownership of any land in any individual. The ownership vests in the Zulu people, and the land is administered on its behalf.

And thereby hangs a tale.

With ownership not vested in anyone, but services provided as well as rates, taxes and levies charged by local municipalities under South Africa’s current wall-to-wall municipal system, it is unclear who has to pay the rates and taxes.

Furthermore, although the trust is partially funded by government, its board (headed by Judge Jerome Ngwenya) has for many years held the view that the trust does not have to comply with the Public Finance Management Act (PFMA) and does not have to explain itself to Parliament.

ALSO READ: ‘Arrogant’ Ingonyama Trust under fire for irregular expenditure, mismanagement

Explosive meetings

This attitude has led to explosive meetings between the Ingonyama Trust Board and the parliamentary portfolio committee over the years, and this week’s was no different, with MPs from the DA, EFF and Freedom Front Plus not hiding their chagrin.

The AG’s report states that whereas in 2018/19 the board’s assets exceeded its liabilities by R83 000, within a year the situation had regressed to a point where the liabilities now exceed the assets by R1.459 million.

Irregular expenditure

The AG states that the decrease in cash flow is due to an increase in expenditure. Furthermore, the AG has issued a qualified audit opinion because of non-disclosure of the full extent of irregular expenditure; while R943,000 has been disclosed, the true extent cannot be determined.

As far as the Ingonyama Trust itself is concerned, the AG has issued an adverse audit opinion, mainly based on non-disclosure of information and irregular expenditure.

The amounts involved are not specified in the annual report, but the report does restate the trust’s belief that it is not accountable in terms of the PFMA. It also conveys its unhappiness about the way municipalities bill it, and its issues with the office of the AG.

The trust’s board believes that the beneficiaries of land tenure should pay the municipal bills.

MPs were not impressed.

The DA’s Thandeka Mbabama told Moneyweb that she believes taxpayers should stop funding the Ingonyama Trust.

ALSO READ: Distributions to Ingonyama Trust beneficiaries ‘vaguely reported’ in financial reports – experts

“The Ingonyama Trust Board should be disbanded. It is not willing to account to Parliament. The information required is simply not provided – the figures are not there.

“Furthermore, the trust raises 90% or more of its revenue from rent charged to inhabitants of communal land, but no records are provided. It is entirely unacceptable and we call on Minister Thoko Didiza to intervene urgently,” Mbabama said.

Tammy Breedt of the Freedom Front Plus added that it is unacceptable that the trust’s board has once again achieved a qualified audit outcome.

“It is also worrying that the board persists in questioning the findings of the auditor-general, and refuses to comply with the PFMA,” said Breedt.

“Public funds must be audited for the sake of transparency and accountability.”

This article was republished from Moneyweb with permission

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