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TRANSCRIPT
INGONYAMA TRUST BOARD ANNUAL REPORT: 2013 -‐ 2014
BRIEFING TO THE PORTFOLIO COMMITTEE ON RURAL DEVELOPMENT
AND LAND REFORM 15 OCTOBER 2014
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HEAD OFFICE LOCATION
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IN THIS PRESENTATION 1. The Purpose of this presentaMon is to brief the PorOolio
CommiRee on the Annual report for the year ended 31 March 2014.
2. Included amongst other issues noted in this presentaMon are
the following maRers : § Background of the ITB § Overview of performance of the Ingonyama Trust Board § Support to TradiMonal Councils § Financial informaMon and expenditure trends § Auditor General’s report and response thereto § Employee misconduct § Challenges facing the ITB
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BACKGROUND
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The Ingonyama Trust was established in 1994 by an Act of Parliament – Act No 3 of 1994 with His Majesty the King as the sole Trustee. An amendment Act in 1997 among other things established a Board to administer the affairs of the Trust. The Board comprises of eight members plus Isilo or his nominee as Chairperson. The eight (8) Board members are appointed by the Minister of Rural Development and Land Reform, afer considering NaMonal and Provincial interests.
The Trust is the one of the largest landowners in the Province with a total extent of 2,844,903 hectares held under some 1600 individual Mtles. The Trust owns land in all of the District MunicipaliMes and Metro Municipal areas in KwaZulu-‐Natal. The Board sees Real Estate as its major acMvity. The core business of the Trust is to administer the land for the “material benefit and social wellbeing of the individual members of the tribes”. However, no alienaMon or burdening of the land may occur without the wriRen permission of the relevant tradiMonal or community authority.
Mandate Mandate
The Ingonyama Trust Board, “the Board” is a schedule 3A Public EnMty reporMng to the NaMonal Minister for Rural Development and Land Reform “the Minister” as ExecuMve Authority. The Board is the AccounMng Authority and derives its mandate from the KwaZulu-‐Natal Ingonyama Trust Act (Act 3 of 1994) as amended by NaMonal Act 9 of 1997 read in conjuncMon with the Public Finance Management Act (Act 1 of 1999).
ObjecMve OpMmal land management for the material benefit and social wellbeing of the communiMes living on Ingonyama
Trust Land Vision
To be leader in sustainable communal land management Mission
To contribute to the improvement of the quality of life of the members of the tradiMonal communiMes living on Ingonyama Trust Land by ensuring that land management is to their benefit and in accordance with the laws of the
land.
Values Transparency, Integrity, Honesty, Professionalism, Value for money, Open CommunicaMon, ConsultaMon and Service
excellence
5
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In terms of the
Ingonyama Trust Act as amended the Board is consMtuted of nine (9) members
BOARD COMMITTEES EXECUTIVE COMMITTEE The ExecuMve CommiRee (EXCO) is chaired by the Chairperson or Vice Chairperson of the Board or any member elected in terms of RegulaMon 9 of the AdministraMve RegulaMons of Ingonyama Trust Board. The membership of this CommiRee consists of not less than two members of the Board.
The powers and funcMons of this commiRee are as follows: • To deal with any maRers specifically delegated to it by the Board, • To generally manage the Trust land in terms of the Act, Government policy and the Board’s policies between sinngs of the Board, • To make recommendaMons to the Board on policies, procedures generally and in relaMon to specific cases. TENURE RIGHTS COMMITTEE The Tenure Rights CommiRee is chaired by the Chairperson or Vice Chairperson of the Board or any member elected in terms of RegulaMon 9 of the AdministraMve RegulaMons of Ingonyama Trust Board. The membership of this CommiRee consists of not less than two members of the Board. The powers and funcMons of this commiRee are as follows: • To decide on behalf of the Board the granMng or refusal of applicaMons for any and all forms of tenure rights, • To make recommendaMons to the Board on land tenure maRers. AUDIT COMMITTEE The Audit CommiRee reviewed the performance of the Board and the Secretariat to ensure that they complied with the PFMA, Financial RegulaMons, Treasury RegulaMons and other relevant pieces of legislaMon and direcMves. BID ADJUDICATION COMMITTEE During the period under review the Bid AdjudicaMon CommiRee ensured that procurement is fair, equitable, transparent, compeMMve and cost-‐effecMve in accordance with the Supply Chain Management policy and the PFMA.
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BOARD COMMITTEE MEETING ATTENDANCE
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BOARD MEMBER BOARD EXCO TENURE RIGHTS COMMITTEE
NO OF MEETINGS 10 12 09
PERCENTAGE ATTENDANCE
85% 71% 71%
AUDIT COMMITTEE & RISK MANAGEMENT
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AUDIT COMMITTEE
05
73%
The Audit CommiRee comprises of 3 members. There were 5 meeMngs held during the year. The Audit CommiRee reviewed the following: • Reviewed the Auditor-‐ General’s management leRer and
management’s response thereto; • Reviewed changes in accounMng policies and pracMce; and • Reviewed significant adjustments resulMng from the audit. The Ingonyama Trust reviewed its risk management strategy and the risk profile for the year.
SECRETARIAT STRUCTURE
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EMPLOYMENT AND VACANCIES AS PER ORGANOGRAM
COMPONENT TOTAL APPROVED POSTS
NO OF FILLED POSTS
NO OF VACANT POSTS
NO OF ADDITIONAL
POSTS
TOTAL FILLED POSTS
OFFICE OF THE CEO 04 04 0 07 11
FINANCE ADMINISTRATION
04 04 0 03 07
ADMINISTRATION SERVICES
07 06 01 04 10
REAL ESTATE 12 11 01 16 27
GRAND TOTAL 27 25 02 30 55
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IMPACT OF EMPLOYING AT ITB The Ingonyama Trust Board has created job opportuniMes for 55 individuals. Skills have been transferred in the following key areas of business. • AdministraMon • Real Estate and • Financial Management
The quality of employees lives has improved, also employees are benefiMng by contribuMng to reMrement and medical aid.
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EMPLOYMENT BY SALARY BANDS AS PER ORGANOGRAM
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SALARY BANDS NO OF POSTS
NO OF FILLED POSTS
NO OF VACANT POSTS
NO OF ADDITIONAL
POSTS
TOTAL FILLED POSTS
Lower Skilled (level 1-‐2)
0 0 0 0 0
Skilled (level 3 – 5) 03 04 01 05 09
Highly skilled producMon (level 6 – 8)
16 14 0 20 34
Highly skilled supervision (level 9 – 12)
07 06 01 05 11
Senior Management (level 13)
01 01 0 0 01
GRAND TOTAL 27 25 02 30 55
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Employment Band Percentages
Level (1 -‐ 2) 0%
Level (3 -‐ 5) 16%
Level (6 -‐ 8) 62%
Level (9 -‐ 12) 20%
Level (13) 2%
Notes: Level (1 -‐ 2) – Lower Skilled Level (3 – 5) – Skilled Level (6 – 8) -‐ Highly Skilled ProducMon Level (9 – 12) -‐ Highly Skilled Supervision Level (13) – Senior Management
* The Graph Shows the dominaWon of highly skilled workers (82%) followed by skilled workers (16%) employed at the ITB.
PERFORMANCE REPORT
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STRATEGIC OBJECTIVES
PERFORMANCE MEASURE INDICATOR
TARGETED PERFORMANCE
AUDITED PERFORMANCE
Unlocking an enabling environment conducive to development on Trust land
Number of tenure rights granted by the Board and signed by both parMes
1601 1157
Number of planned land management projects
4 4
EffecMve and efficient asset management services
Land Holding Register maintained on a quarterly basis 4 4
Support to TradiMonal Councils in capacity building programs
Number of TradiMonal Councils empowered in land management maRers
33 40
Comments on performance report Strategic ObjecWve Unlocking an enabling environment conducive to development on Trust Land. Performance Measure Number of tenure rights granted by the Board and signed by both parMes NarraWve The role of the Trust is to manage land that is occupied by the Tribes in the Province of KZN mainly for residenMal purposes and subsistence farming. In doing that it recognises old order tenureship rights that are sMll in place. These old order rights are the Indigenous Rights and the Permission to Occupy. The Indigenous right is the primary right that is directly managed by the TradiMonal Councils and the Permission to Occupy is a personal right that was managed by the Department of Co-‐operaMve Governance and TradiMonal Affairs. However the granMng of the laRer right has since been disbanded due to its unsecured nature. Land occupants are therefore conMnuously encouraged through road shows and workshop campaigns to convert these rights to a new order right being the lease. The rolling out of the planning and development schemes by the MunicipaliMes into rural areas has also highlighted the need to provide secure tenure instrument to the inhabitants. On the other hand, the rolling out of these planning and development schemes has facilitated development which has aRracted commercial developments ventures and formalised housing. The effecMveness of secure tenure right is that it facilitates stability in the community and for an individual occupant as he/she knows the extent and permiRed land use of his/her site. It also helps both the TradiMonal Council and the Local Municipality in planning the area for future seRlement and commercial use, thus unlocking development on Trust land.
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Advantages of leasing as a form of a tenure right The Ingonyama Trust Board leases its land for commercial, residenMal and insMtuMonal purposes. The advantages of taking an ITB lease are :-‐ • The lessee incurs less debt to acquire the land • The lessee controls asset without cost of ownership • The lessee can deduct lease payment as a business expense (if the lease is commercial) • The short term lease provides sufficient Mme for the lessee to obtain planning and infrastructural requirements. • The long term lease granted is for a period of forty years and can be renewed for a further forty years – this long
term lease is only granted afer the expiry of the short term lease. Prior to 2007 the ITB received R 100,00 for general PTO income (residenMal income) per annum and R 48,00 for commercial PTO income per annum. PTO’s are no more issued and the ITB has adopted the leasing system as a medium of providing tenure rights. The introducMon of the leasing system has increased revenue for the community beneficiaries. If one had to equate the 1157 tenure rights issued for 2013/2014 , R 100.00 per tenure right based on the PTO system, then the amount receivable is R 115,700.00 . By issuing leases the ITB’s receivable income at an average rental of R 1000 .00 per year is R 1 157 000.00. The increase is ten fold.
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Land made available for Housing projects
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!
Name!of!DRA! No!of!Units! Traditional!Council! MUNICIPALITY!Sobonokhona! 1000! Sobonakhona! Ethekwini!Vulamehlo! 2000! Mbele,Emandleni!and!Izimpethu!Zendlovu! Vulamehlo!Mbambangalo!RHP! 1000! Mapumulo! Umkhambathini!Mvuzane! 1000! Mvuzane! Umlalazi!Thoyane! 1000! Thoyane! Ethekwini!
Makhasa! 1000! Qwabe!and!Makhasa! Big!Five!False!Bay!
Umzumbe!Cluster!D!Q!Addendum!
1000! Mabheleni!,!Nhlangwini!,!Cele!P!and!Bhekani! Nkandla!
Zondi!Ward!2!&!3! 1000! Zondi! Nkandla!Mangidini! 1000! Mangidini!&!Chube! Ndwedwe!Kwa!Ndwalane! 1000! Kwa!Ndwalane! Hibiscus!Coast!Emalangeni!,!Cibane!,!Wosiyane!
1000! Emalangeni!,!Cibane!,!Wosiyane! Ndwedwe!
Umzumbe!Cluster!D! 1000! Mabheleni!,!Nhlangwini!,!Cele!P!and!Bhekani! Nkandla!
Mpungose!RHP!! 1000! Mpungose! uMlalazi!!
Improvements made on leased land
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Comments on performance report
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Performance Measure Number of planned land management projects NarraWve The current extent of land managed by the Trust is about 2,8 million hectares. Most of the land falls under the TradiMonal Councils. In order to address planning and development iniMaMves by the Trust in conjuncMon with the Local MunicipaliMes, the Trust as the landowner undertakes to facilitate projects that are geared at uplifing the lives of the occupants residing on Trust land. The following projects were pproved by the Board: Umfolozi Big 5 Game Reserve Winlab – Renewable Energy Eurecka – Renewable Energy Mpophomeni Land Audit
Comments on performance report
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Strategic ObjecWve EffecMve and efficient asset management services Performance Measure Land Holding Register maintained on a quarterly basis NarraWve When KwaZulu came to an end and the ITB was established, it was found that much of the land to which KwaZulu had been enMtled had not been transferred to it, and there were disagreements as to what land was concerned. It was only in 2010 that an interdepartmental steering commiRee was established, to achieve agreement, and over Mme land due to come to the ITB was idenMfied and transferred by DRDLR to ITB. This has required reports to be submiRed quarterly, staMng what land had been so vested during the quarter. The above therefore is also the basis of establishing an Asset Register that contains a record of all property registered in the name of the ITB. This is necessary for various reasons: for audit control purposes, to ensure that ITB consent is granted for servitudes (Eskom lines and water pipelines) and leases, so that payment for them may be levied.
TRADITIONAL COUNCIL SUPPORT In terms of the enabling legislaMon the Board cannot alienate or encumber land without a wriRen consent of a TradiMonal Council. Most of the beneficiary communiMes of Ingonyama Trust land are headed by TradiMonal Councils. It is therefore imperaMve that the Board have a close working relaMonship with all relevant TradiMonal Councils. For this reason the Board provides strategic, professional, technical and other support to TradiMonal Councils so that there is improved relaMonship. This enables the Board to render effecMve land administraMon to communiMes. The Board provides detailed training to TradiMonal Councils on the following: Land administraMon, The ConsMtuMon and other relevant legislaMon, Conflict resoluMon and management. Further training needs have been idenMfied, in parMcular on the following: Financial administraMon, Community Trust administraMon and management, Minute taking and management, Conduct of meeMngs, Record keeping.
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AGRICULTURAL SUPPORT The nature of communiMes living on Ingonyama Trust land is that they live in terms of Customary Law and their allotment on land is such that they should be self-‐sustaining. With the changing environment especially around agriculture the Board in conjuncMon with the Provincial Department of Agriculture provide technical, financial and other assistance to communiMes so that they can sustain themselves through various agricultural projects. In terms of the Board policy part of the revenue it receives is allocated to various communiMes especially those which are the source of such revenue. CommuniMes can source their allocaMons by providing an acceptable business plan to the Board. The Board encourages that communiMes develop sustainable projects especially those which are linked to land usage like community gardens and poultry producMon. About R 9 million was allocated to Agricultural Support and infrastructure.
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EDUCATIONAL AWARDS The Board also emphasizes the need for scholar Learnership. Jointly with the various communiMes a number of educaMonal awards were given in the year under review.
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EDUCATIONAL AWARDS
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RELATIONSHIPS WITH OTHER ORGANS OF STATE
In terms of the Intergovernmental RelaMons Framework Act (2005) organs of state are encouraged to cooperate to achieve a common goal. To this extent the Board encourages various organs of state who have an interest on Trust land to enter into cooperaMve agreements. The essence of these agreements is to specifically set out the respecMve roles of each role player. In so doing conflict is minimized. The Trust owns land in most municipaliMes in the province. This makes the municipaliMes the majority partners of the Board on land use.
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JOINT VENTURES BETWEEN COMMUNITIES AND OTHER STAKEHOLDERS
The Board encourages sustained relaMonships between communiMes, itself and other stakeholders who operate in the same environment with the Board. One of the known agricultural commodity in the province Is sugarcane. There are various major role players in the sugarcane industry like for instance Tongaat Hullet, Illovo Sugar and Umfolozi to menMon but the few. The Board seeks to foster a stronger relaMonship with these major and able role players. As a starMng point a formal relaMonship has now been established between Tongaat Hullet, the Board and a number of communiMes across the uThukela river. The relaMonship among others entails the following; • Agreements between the Board, Tongaat Hullet and the relevant communiMes are entered into, • Tongaat Hullet among others provides skills to communiMes to develop their land and plant their sugarcane in terms of modern methods, • Tongaat Hullet also assists the communiMes in terms of financial management and the raising of capital in order to become more professional sugarcane farmers. The agreement with Tongaat Hullet has been in place for over a year now. At the end of the year under review the result showed an improved sugarcane producMvity in the province as a result, as well as investment on infrastructure by Tongaat Hullet in communiMes where this is needed most.
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THE FUTURE OF COMMUNITY BENEFITS The Board is of the view that communiMes with access to as is the case with Ingonyama Trust should not starve or be financially disadvantaged. In order to render beneficiary communiMes on Ingonyama land self sustaining the Board will require that each community set aside a piece of land in which economic acMviMes in large scale will take place and the revenue derived therefrom be made available for community development and benefit. To illustrate this point the year under review the Board witnessed three important projects which to some extent underscore the feasibility of the proposiMon above. The opening of Hammarsdale JuncMon shopping centre in Mpumalanga within eThekwini Metro under Embo TradiMonal Council is a case in point. This centre has 75 shops and created 780 permanent jobs. The centre is on a forty year lease with the Board and the revenue derived therefrom is shared between the Board and Embo TradiMonal Council. The lease is extendable but what is important is that at the end the community is lef with a huge and valuable improvement on its asset. Should one contrasts this with mining, where the community is lef with a depreciated asset. The second project is under Mathonsi TradiMonal Council where an average size shopping centre was under construcMon and hopefully will be operaMonal during the course of the next financial year. The third project is the Jozini Mall under the Ntsinde TradiMonal Council which was opened during October 2013. It will be noted that in a space of about five years this TradiMonal Council has seen two major developments in its area if one considers the Jozini Tiger Lodge, a four star hotel. Apart from minor investments these two major investments in Jozini have seen a capital investment of approximately R 300 million. What is now to be considered is the focus to residenMal development beyond low cost subsidized housing. It is worth recording that the local community also has a stake in the operaMng companies of these investment companies.
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Hammarsdale JuncMon Project
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Graph for TradiMonal Council Payments
Infrastructure and Projects,
R1 678 317 AdministraWon,
R1 670 745
Bursaries, 486 048
The total payments made to TradiWonal councils in the 2013 / 2014 year amounted to R3,835,109. The following categories make up the percentages of the total payment as follows:-‐ -‐ Infrastructure and Projects = 44% -‐ AdministraWon ( legal ,vehicle maintenance costs ,salaries ) = 43% -‐ Bursaries = 13%
Sofware systems in place
• Accoun&ng
Ø Pastel (general ledger and Salaries)
Ø Lease sofware( lease database) Ø Hardcat system(asset register)
• Real Estate
Ø Land tenure informa.on system(land holdings register and lease co-‐ordinates)
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Significant accounMng policies
• Revenue – Straight lining of lease income to comply with GRAP standards
• Rental income reflected in the AFS is the average rental received per lease over the lease term. This is different from the actual rental charged because of the escalaMon of rental income per annum. The figures noted in the slides includes the straight lining porMon of lease income and has been audited.
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• Property , Plant and equipment is reflected at cost less residual values.
• Impairment and depreciaMon is accounted for.
• Leased Property is reflected as investment property.
• Property, Plant and equipment
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Summary Statement of Financial PosiMon for the year ended 31 March 2014
R 2013 / 2014
R 2012 / 2013
Total Assets
370,800,215
300,511,553
Total LiabiliMes
261,960,753
188,155,863
Net Assets
108,839,462
112,355,690
Total Net Assets
108,839,462
112,355,690
Note : The decrease in the net asset value is mainly due to the rates provision ( por&on for 2013) made in 2014 which was previously reported as a con&ngent liability.
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R Income
Rental Income 73 907 495
Finance Income 9 243 061
Royalty Revenue 872 171
Other Revenue 20 475 012
Total Revenue 104 497 739
Expenditure
108 333 581
DEFICIT FOR THE YEAR (3 835 842)
SUMMARY – STATEMENT OF FINANCIAL PERFORMANCE AS AT 31/03/14
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Cash flow Statement for the year
Notes R 2013 / 2014
R 2012 / 2013
Net cash flow from operaMng acMviMes
1
13,562,960
9,931,378
Net cash flow from invesMng acMviMes
(6,315,113)
(13,038,663)
Increase / (Decrease) in cash and cash equivalents
2
__7,247,847
_(3,107,285)
Cash and Cash Equivalents at the end of the year
179,333,815
172,085,968
Notes:-‐ 1. The ITB advanced its net cash flow from operaMon acMviMes by R 3.6m 2. The Increase in cash and cash equivalents from 2012 / 2013 amounted to R7,2 m 3. The decrease in cash flow from invesMng acMviMes is due to the compleMon of major construcMon of
office accommodaMon in the previous year.
FINANCIAL PERFORMANCE AS PER ECONOMIC CLASSIFICATION AT 31/03/14
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R Current payments Compensation of employees 14 606 055 Goods and services 93 546 026 Interest and rent on land 181 500 108 335 581
Capital Expenditure 6 776 519
TOTAL EXPENDITURE FOR THE YEAR 115 110 100
OperaMng expenditure trends Current year • Total expenditure increased by % mainly due to increase in the rates
provisions ,compensaMon of employees and provision for disbursement of funds to TC.
• Transfer payment received amounMng to R 14, 5 m was fully uMlised. • Rental is paid for the satellite office at Ulundi. • Goods and services includes general operaMng and administraMve
expenses (excluding employee cost). Future years • Employee cost will significantly increase if the proposed organogram is
approved, which will result in increased administraMve costs.
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Employee cost to company
-‐
2 000 000
4 000 000
6 000 000
8 000 000
10 000 000
12 000 000
14 000 000
16 000 000
2010/2011 2011/2012 2012/2013 2013/2014 Cost to Company 5 832 722 8 857 009 11 155 911 14 606 055
21 STAFF
24 STAFF
40 STAFF
55 STAFF
R
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Capital expenditure at cost
Buildings and other fixed structures,
R2,558,932.00
Furniture, Equipment and heritage assets,
R601,855.00
Computer Equipment, R280,223.00
Soiware and other intangible assets,
R195,760.00
Motor vehicles,
R3,139,749.00
Capital Expenditure Trends Current year • Capital expenditure paid from income generated from trading acMviMes
( not transfer payment) • Major porMon paid for compleMon of ITB office accommodaMon. • ITB Purchased vehicles, furniture and equipment due to the increase in
business acMviMes. • Sofware development for database of leases undertaken. Future years • CompleMon of phase 2 of ITB office accommodaMon • Possible construcMon of phase 3 – ( greater office space required if
proposed organogram is approved) • Establishment of satellite offices
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Total Revenue for the year 2013/2014
Rental Income, 73 907 495
Finance Income, 9 243 061
Royalty Revenue, 872 171 Other Revenue, 20 475 012
Note: The Percentages of the Total Revenue of R104 897 739 makes up the following:-‐ -‐ Rental Income = 71% -‐ Other Revenue = 19% -‐ Finance Income = 9% -‐ Royalty Income = 1%
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Lease Income (including Straight Lining porMon)
-‐
10 000 000
20 000 000
30 000 000
40 000 000
50 000 000
60 000 000
70 000 000
80 000 000
1 2 3 4 Rental Income -‐ Non Income 21 949 685 23 081 622 43 502 235 73 897 799
2010 / 2011 2011 / 2012
2012 / 2013
2013 / 2014
R
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Departmental Transfer Payments
-‐
2 000 000
4 000 000
6 000 000
8 000 000
10 000 000
12 000 000
14 000 000
16 000 000
18 000 000
20 000 000
1 2 3 4 Transfer Payment Received 9 157 000 13 034 000 18 816 000 14 500 000
2010 / 2011
2011 / 2012
2012 / 2013
2013 / 2014
R
AUDITOR GENERAL’S REPORT MATTERS REPORTED BY AUDITOR GENERAL PROPERTY, PLANT AND EQUIPMENT “The enMty did not recognize the land in accordance with the requirements of GRAP 17 Property, plant and equipment, by recognizing it at fair value as at the date of acquisiMon. I did not determine the correct fair value of land as it was impracMcable to do so. “ ROYALTY REVENUE “RoyalMes received by the enMty from the mining operators were incorrectly recognized as revenue by the enMty, which is contrary with the requirements of GRAP 9 Revenue from exchange transacMons. Consequently, royalty revenue was overstated by R872 171 (2013: R710 884) and the payables to South African Revenue Services (SARS) were understated by the same amounts. AddiMonally, the accumulated surplus as at 31 March 2012 was overstated by R13,08 million and the payables to SARS were understated by the same amount”.
RESPONSE OF THE BOARD PROPERTY PLANT AND EQUIPMENT-‐ LAND VALUATION The Board notes the concerns raised by the Auditor General in this regard. The Trust owns land that extends throughout the province of KwaZulu Natal. This land was not acquired at a price as it vested to the Trust in terms of the Ingonyama Trust Act. The Trust is aware of its GRAP reporMng responsibiliMes and does not wish to intenMonally deviate from this, however, valuing 2.8 million hectares of land does place administraMve and more importantly financial burden on the state. The cost to be incurred for this valuaMon exercise will be exorbitant if accepted valuaMon techniques are used. The Trust is mindful of wasteful expenditure for no material benefit, and complying with this relevant GRAP standard does give rise to considerable expenditure. The Trust will seek an exempMon from the Office of the Accountant General not to value this land. The Trust will seek accounMng/legal advice regarding the placing of land values on ITB land . RECOGNITION OF ROYALTY REVENUE AS INCOME OF THE TRUST The Auditor General contends that the income recognized as royalty income by the Trust be treated as a liability. The Trust records its disagreement and requests that this maRer be dealt with by an Arbiter to consider ITB’s enMtlement to royalMes in terms of the Royalty Act.
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Employee misconduct
• There were no cases of employee misconduct or invesMgaMons held for the year.
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Challenges
Current challenges • Payment of rates to municipaliMes
• Illegal occupaMon of Land
PotenWal resolves • The Board is currently reviewing a rates
posiMon paper which includes senng up a component within the ITB to administer the verificaMon of rates liabiliMes for the eventual payment of rates.
• Signage is placed on ITB land in cases were there is confirmed threat of illegal occupaMon of land.
• Security patrols are undertaken in specific areas for reporMng of illegal occupaMon.
• Legal acMon is also taken against offenders.
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