Ingonyama Trust Annual Report 2010/11

Rural Development and Land Reform

18 October 2011
Chairperson: Mr S Sizani (ANC)
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Meeting Summary

The Department of Rural Development and Land Reform noted an apology from the Minister and Deputy Minister, and tabled the report of its entity, the Ingonyama Trust Board (the ITB). The ITB was established by statute in 1994 to improve the quality of lives of people living on its trust land, by ensuring that land usage was to their benefit, was legally correct, and that land management systems were provided to the communities on that land. The ITB owned about 2.7 million hectares of land, with 1 491 title deeds and a population of about 4.5 million. Its core business was real estate and land management. The ITB would grant land rights and used various systems of land tenure, including leases, indigenous titles, commercial rights and surface mining rights. In the 2010/11 financial year, it had received about 1 220 land tenure applications, of which 449 were approved and 221 were finalised. No mining applications were received. A process of land audit was initiated at Jozini and Mnguzi towns. A number of community gardens were supported at Ntanzi ,Matheni and uSuthu traditional communities. The ITB had received a qualified audit report, because of non-evaluation of the land, the incompleteness of the authority statements on revenue, and there was also a matter of emphasis on fruitless and wasteful expenditure with regard to distributions. The financial figures in the balance sheet were tabled.

Members asked whether the real estate and the land management system were meant to empower communities, how this would be done, whether the communities were aware of the trust’s activities and if they were empowered to deal with the land, and how community members and municipalities were involved. Members asked about the failure of the ITB to meet some of the targets and asked why this was so, as one of the reasons cited was lack of capacity, and in that regard they wanted to know how the issue would be addressed. They enquired whether the Department of Rural Development and Land Reform was involved in the process of setting targets, what the relationship with this Department was, and why the ITB and a provincial department were apparently sharing office space. They wanted further clarification on the figures and beneficiaries. Members also noted that the total staff establishment had not been mentioned, and wanted to know if all posts were filled, or if there were vacancies. They questioned the use of 90% of income for beneficiaries, and were given further figures on how the money had been used. The Chairperson expressed disappointment that there had not been full spending, pointing out that money remaining unspent and in the bank was not helping beneficiaries. Members were also concerned about some of the financial qualifications, and asked why the internal audit function was outsourced, and what advice it had given to ITB in relation to the wasteful expenditure.

Meeting report

Ingonyama Trust Annual Report 2010/11
Mr Mduduzi Shabane, Director-General, Department of Rural Development and Land Reform presented the Annual Report (2010/11 of the Ingonyama Trust Board (ITB or the Trust). He submitted an apology for the absence of the Minister of Rural Development and Land Reform, and the absence also of the Deputy Minister.

The Committee confirmed that it must continue with the meeting in their absence.

Ms Belinda Benson, Secretarial Official, ITB, outlined the legislative framework of the Ingonyama Trust, noting that the IT Board was formed in terms of the Ingonyama Trust Act in 1994, which was also amended in 1997. She said ITB was a Schedule 3A public entity under the Public Finance Management Act (PFMA).

Ms Benson reported the land owned by ITB as approximately 2.7 million hectares in extent. The ITB was mandated to improve the quality of lives of people living on that land. The Trust was to ensure that land usage was to the benefit of the community in accordance with the laws of the land. The Trust provided the best possible land management systems to communities living on the Trust’s  land. She said 1 491 title deeds were issued to a population of 4.5 million people living in ITB trust land. The ITB owned land almost in all local municipal areas.

Mr Amin Mia, Chief Financial Officer, ITB, outlined the core business function of the ITB as real estate and land management. He said the board granted land rights, and used various tenure systems for that purpose. Rights were granted subject to approval of affected traditional councils. The rights included leases, indigenous titles, commercial rights and surface mining.

Mr Mia said that during the financial year 2010/11 the ITB received about 1 220 land tenure applications, of which 449 were approved, and 211 were signed off by the ITB. There were no mining applications received during the financial year. A process of land audit was initiated at Jozini and Mnguzi towns. A number of community gardens were supported at Ntanzi, Matheni and uSuthu traditional communities.

He reported that only five staff members were employed in the Finance section of the ITB.  He then tabled the financial report by the Auditor-General (AG). He noted that the ITB audit report was qualified in two respects. The first related to the non-evaluation of land. The second related to the incompleteness of authority for the revenue. The AG had also highlighted some emphasis of matter, in regard to fruitless or wasteful expenditure in the distributions made by the ITB.

He noted that cash flow from operations was at R40.5 million and the income from investing activities was at R13.8 million. The cash on cash flow equivalent at the year end of March 2011 was stated as R185.6 million.

Ms P Ngwenya-Mabila (ANC) asked why the report was silent about the total staff establishment of the Ingonyama Trust Board. She said the Committee needed to get a clear picture of how many people it was supposed to employ, how many posts were filled, and whether there were any vacancies.

Ms Benson responded to the question raised about the current status of staff application that the current organogram indicated that during this financial year there were seven vacancies available. She said the idea of an organogram of the ITB was to get out a secretariat that should report to the board and undertake effective administration of the board’s mandate.

Ms Ngwenya-Mabila asked the ITB to clarify where the income, as highlighted in the report, had been used to benefit the community.

Ms Benson said that 90% of the income was used to fund projects. ITB would always plough back to the community, in the form of projects.

Mr Mia explained how and where the 90% income was used. He said the Annual Report dealt with the financial statements, and here provision was made for the 90% spending of income. This exclude transfers, but there had been provision for R24 million to fund the community, traditional councils and beneficiaries. Not all of the money had been spent, and an amount of R4 million remained.

Ms Ngwenya-Mabila asked why some of the targets set by the Trust were not met. In particular, she wanted it to explain why ITB had failed to employ land inspectors and what happened to the budget that was set aside for doing this.

Ms Ngwenya-Mabila asked how the Committee related to other local committees and other structures in the local council in relation to land administration.

Ms Ngwenya-Mabila questioned the role of the internal audit, and asked what this internal audit committee had advised the ITB to do, when initiating a project of outsourcing internal duties. She wondered if there was a budget set for this, and, if not, asked where then the money had come from to start this project.

Mr Mia confirmed that the internal audit function was indeed outsourced and this was the decision of the Board, taken a long time ago. In the future, ITB could consider employing people within the organisation to take on that specific function.

Mr Mia noted that, in regard to the wasteful expenditure, the audit committee expressed concerns and had recommended that the Board investigate the matter thoroughly. If it was determined that legal steps needed to be taken against the Researcher, this would be done.

Ms Ngwenya-Mbila asked whether the ITB had any agreement regarding the sharing of office space with provincial officials of the Department of Rural Development.

Mr Shabane said that when the Secretariat was formed there were only three staff members, all of whom were seconded to the ITB from the Department, so that there was no need to create a separate office.

Ms Ngwenya-Mabila asked the ITB to give reasons why it was delaying paying its accounts on time.

Ms Benson said that the financial issues had been addressed and actions to eradicate the problems had been provided.

Mr S Ntapane (UDM) wanted to know why the ITB had failed to reach its targets of land transfer for domestic purposes. He asked also if the ITB had consulted with the Department of Rural Development and Land Reform before setting those targets, and asked who was supposed to complete the documentation. He said the ITB had cited a “capacity issue” as the reason for not meeting targets, but asked what exactly was meant by this, and what actions the ITB had taken to correct the problem.

Ms A Steyn (DA) asked if there had been any meetings with the Department, and, if so, asked if there was any movement or assistance from the Department and what general assistance the Department would give to the ITB for development.  

Mr Shabane said that there was a far better working relationship between the Department and the ITB than at present. Now, the Board was far more advanced in terms of the specific functions that it completed and performed.

Ms Benson responded to the reasons why some of the targets were not met, pointing out that not all of the applications that might be received were completed, and it would be improper to allocate rights to the land, even if these were only in the form of a lease, if there was no legal justification for doing so. Due diligence had to be carried out, and she noted that the ITB may take at least a month to consider the applications, and it was necessary to ensure that there was full compliance.

Ms Steyn asked the ITB for a list of traditional councils with whom it was working. She asked what had been the Department’s assistance in that regard.

Ms Steyn asked if the land audit of the ITB could be finalised.

Mr R Cebekhulu (IFP) asked the delegates what kind of assistance ITB gave to communities. He also asked what role the Board was playing in regard to the areas under the amakhosi.

Mr Cebekhulu asked whether the Administration Committee was going to involve members of the community, and who would nominate them.

Ms Steyn questioned the ITB whether the community knew what channels to follow to access the money, and on what the money could be spent.

Ms Steyn asked for the value of the land that the Trust owned, and if there were any difficulties around its valuation. She asked also how the ITB would deal with the local municipalities on payment of rates, as this was surely dependent on the land valuation.

Ms Steyn also wanted to know when and why the property changes were happening, and where the income of that was reflected.

Ms Benson explained  that this was part of the empowering process to enable communities to be able to institute programmes on the land that were of value to them, and to encouraged economic development on the land. In response to the question around land allocation and the administration committee, she said that the idea was that an individual from the community would be nominated, and that the community would collectively determine the use of land for the benefit of the community. As a check and balance, the municipality would also be offered the opportunity to participate in the forums, and in the planning around land-use, from the start, instead of performing a reactive function as it had in the past. There were a number of municipal agreements and relationships that needed to be worked out and formalised, however, before that process was complete. The ITB had conducted a trial initiative in Ndeleni area. She said there was no precedent for doing this, and the ITB may not always get the issues correct.

The Chairperson said the reason for the establishment of the Ingonyama Trust Board was to provide information and to empower the community. He expressed the view that the Board was in fact doing the community a disservice if it failed to spend all its money, as the amounts unspent could have been used to improve the lives of the communities.

The meeting was adjourned.


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