News24 Exclusive: How Zuma-linked charities flout the rules

2015-07-20 13:38
Jacob Zuma (AFP)

Jacob Zuma (AFP)

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Durban - Non-profit organisations run by President Jacob Zuma's immediate family - including his four wives - have not filed financial reports in years, a breach of the law which effectively keeps any income and expenditure by the trusts from public scrutiny.

Most donor and funding agencies require registration as a non-profit organisation (NPO) as a prerequisite for an entity to receive money. Under the NPO Act, administered by the Department of Social Development, registered entities must file annual reports which are publicly available.

Despite the regulations and the threat that non-compliant entities would be wiped from the NPO register, the Zuma-linked NPOs continue to flout the rules.

An investigation by News24 has revealed that all but one of the Zuma-aligned registered non-profit organisations had failed to file their annual returns to the Department of Social Development, some never having filed financial reports at all.

Five out of the six Zuma-linked charities did not file their financial reports. For details on how the Zuma family NPOs have complied with the law click here.

However, the non-compliance by the Zuma charities is the tip of the iceberg. The Department of Social Development revealed to News24 that more than half of the nearly 140 000 registered non-profits were not compliant with the law.

'Royal game status'

Institute for Accountability in South Africa head Advocate Paul Hoffman said in the past there had been a furore surrounding some NPOs which had been deregistered, but that the Zuma-linked bodies appeared to have been given “royal game status”.

“All of these organisations are currently in breach of the Non-Profit Organisations Act 71 of 1997. In the past people have had NPOs deregistered because of their non-compliance with the law,” Hoffman said.

“With royal game status that the Zuma charities have been given I assume the department is a bit more lax than it would be for others,” he added.

The most controversial Zuma-linked NPO is the Masibambisane Rural Development Initiative, chaired by Zuma, which is run by his distant cousin, businessman Deebo Mzobe.

The project says it focuses on housing; economic, social and community development; and community and neighbourhood organisations. Formed in 2000, it hit the spotlight when media reports revealed a government plan to commit R900 million to the programme in 2013.

The Masibambisane board has not submitted financial reports since 2013 when the Daily Dispatch reported that the Eastern Cape government had paid R250 million to the initiative to finance farming projects.

According to Social Development’s public records, the Jacob Zuma RDP Education Trust is the only Zuma-linked entity to have submitted financial reports since it was registered in 2005. The 2015 reports are not yet available.

'Non-compliance is a serious problem'

Department of Social Development spokesperson Mpho Mngxitama insisted to News24 that those non-profits which failed to submit yearly financial reports would have their registration cancelled.

“Every year a registered NPO is expected to submit reports, both financial and narrative. This is a requirement by NPO Act law. The organisation that does not submit will be served with a notice; failure to submit will result in the registration status being cancelled and this will affect the benefits granted to the organisation and they will cease to exist,” she said. 

“Registration improves the credibility of the sector because NPOs can account to a public office and by submitting financial and narrative reports of their activities, improve accountability and transparency in the sector,” she said.

But the problem was greater than the Zuma-linked entities, she suggested.

“It is a pity that you went straight for those NPOs [the ones with links to the president] because if you had to sit down and really go through the list, you would have seen that non-compliance is a serious problem and in total there are 75 919 out of 136 453 registered NPOs that have not complied with legislation.

“We do not want to be punitive and we want to make sure that everyone has a chance to get their books in order.”

She cited an example of the South African National Editors Forum, saying that the body had not submitted financial reports for three years. Sanef, however, was now up to date.

Over a period of two weeks, News24 made repeated efforts by phone and e-mail to reach each of the Zuma-linked organisations, including the Tobeka Madiba-Zuma Foundation run by the president’s current third wife Tobeka Madiba-Zuma.

Registered in 2010, the foundation submitted financial reports in 2012 and 2013 but failed to do so in 2014. It was the only one of the charities to respond to News24's inquiries.

Explanation

Madiba-Zuma explained why she had failed to submit financial reports in 2014.

“The Foundation submitted NPO reports up to & including the year ending 2013, but has not yet been able to submit the report for the year ending 2014, as the signed financials for the 2014 year were not available owing the undue delays in the production of the said statements.

“We have changed auditors who were assisting us, this resulting in the delay in the production of the 2014 financial statements. We can confirm that the new auditors are producing them.

“We are aware that the late filing of NPO reports is a breach of the Foundation’s obligations in terms of its NPO registration, and are doing all that we can to catch up and file this report as soon as possible. The narrative portion of the report is prepared and ready to be lodged, and we await only the 2014 financials,” said Madiba-Zuma.

She said the year-end 2015 report was due by 30 November 2015, and the foundation would have filed by this date.

Spokesperson for the Presidency Harold  Maloka referred News24 inquiries to the charities.

Read more on:    jacob zuma  |  durban

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