By Tauriq Moosa
A report from the University of Cape Town (UCT) has raised concerns about the Ingonyama Trust’s financial management, saying the trust has been “vague” in its reporting and is not subject to “meaningful” public finance oversight.
The trust, led by the reigning monarch on behalf of the Zulu nation, controls 2.8-million hectares of land worth about R29bn.
The report, compiled by UCT’s Land & Accountability Research Centre, calls for “far-reaching” responses from the government, such as a request for a forensic audit.
“There has been a disproportionately low ratio of distribution [of resources and cash] to the beneficiaries,” the report says, “and distributions, where there have been any, have been vaguely reported.”
The Ingonyama Trust was created before the 1994 elections to place land — previously controlled by former homeland governments in KwaZulu-Natal — into a trust. It was part of a deal between the National Party and the IFP so that the latter would contest the election.
The trust has only one trustee: the reigning Zulu monarch. Last year, its expenditure in the national budget was marked at more than R27m. Its finances are managed by a board of trustees that falls under statutory oversight in terms of the Public Financial Management Act.
Concerns have been raised over the years about the trust’s management and who benefits. For example, last year the late Prince Mangosuthu Buthelezi — who acted as liaison between the government, the royal family and the trust — claimed the king and his allies wanted to sell the land for profit. The king denied the allegation.
Land expert Anthea-lee September-van Huffel, from the Free State University, said the trust’s “use of both trust law and traditional customary law causes confusion”, which often aligned “with corrupt practices and power mongering”. This was because “communal consent and consultation” — which were fundamental to traditional customary law — fell by the way side.
Concerns about the trust’s financial reporting were the central issue of UCT’s Land & Accountability Research Centre report.
“Shifts in the criteria and categories used by the trust in its financial reporting to parliament over the past nine years have had far-reaching consequences for beneficiaries of the trust,” the report says. These “changes have negatively impacted the extent to which the trust and its board have been held accountable”.
The main reason has been inconsistent application of accountability mechanisms. For example, in 2016 the board contended that the trust fell outside the ambit of the Public Financial Management Act, the main legislation that governs the financial accountability of public entities. This had far-reaching consequences, the report says.
The report says the auditor-general of SA has an “erroneous” view that the trust itself is no longer governed by the main public oversight legislation, but that only the trust board is. This has meant that information about the income of the trust is not publicly available and beneficiaries have no way of understanding how the money is being used.
The trust’s view that is it not subject to public accountability regulations, the report says, is at odds with findings by the courts, including the Supreme Court of Appeal, that the trust is an organ of state. This should place it within public financial accountability mechanisms.
The trust board has had fights with the government over rates and mining royalties and so on as a result of confusion.
“Underreporting of revenue and under-itemisation makes it difficult for the minister [of agriculture], as the trust’s executive authority, and parliament to effectively exercise their oversight function over this public institution that holds land on behalf of millions of people,” the report says. The beneficiaries can therefore not assess “whether the land is being administered in a way that respects their pre-existing land rights”.
The report makes numerous recommendations to the government, for example, placing the trust back under the auspices of the Public Financial Management Act and the obligations that arise from it. This would enable “transparent disclosure” of finances to the beneficiaries.
There also should be an investigation “regarding disbursements to beneficiaries”, which the report says has not adequately been explained since 2014. The report calls for more transparency and for the authorisation of a forensic report by the auditor-general.
The trust and the government have not yet completed their overview of the report as it was not provided before publication.
This article first appeared in Business Day on 11 April 2024.
Update: April 12 2024
This story has been updated throughout.
