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Koppe moet rol by Landbank | Heads must roll at the Land Bank

8 Januarie 2021

Die ouditeur-generaal se verdoemende verslag oor die stand van Landbank se finansiële volhoubaarheid vra vir dringende ingrypings. Wie ook al verantwoordelik is vir die finansiële verliese van R2,8 miljard sal moet verantwoording doen. Dit en vele ander uitdagings het die OG genoop om ernstige twyfel uit te spreek oor die vermoë van die Landbank om in die afsienbare toekoms as ‘n lopende saak te oorleef.

Die ongunstige ouditmening kan nie daar gelos word nie. Koppe sal dus op bestuurs- en beheervlak moet rol! Dit geld ook vir diegene by Tesourie wat verantwoordelik was vir oorsig. Dit is nie dat hulle nie geweet het wat kom nie, want die finansiële krisis by die Landbank het ‘n lang aanloop.

In die ouditeur-generaal (OG) se verslag word die probleme by die Landbank toegedig aan ‘n uittog van kundige bestuurders, ‘n gebrek aan toesig van die Nasionale Tesourie (wat die SA regering as die enigste aandeelhouer van die bank verteenwoordig), die afskaling van die bank se kredietgradering deur Moody’s en die droogtetoestande wat dit moeilik gemaak het vir boere om hul lenings terug te betaal. Dit is egter maar die oortjies van die seekoei.

Die OG se verslag verwys ook na ‘n gebrek aan interne beheermaatreëls deur die bestuur van die Landbank om kredietverliese óf dalings in waarde van verlengde lenings óf sekuriteit wat aangebied wanneer om lenings aansoek gedoen word, behoorlik te verreken.

Dit meld ook dat die finansiële state wat vir ouditering ingedien is, nié volgens die voorgeskrewe finansiële verslagdoeningsraamwerk en internasionale rekeningkundige standaard opgestel is nié en nié deur volledige en behoorlike rekords, soos deur die wet vereis word, ondersteun is nie! Voldoende toepaslike ouditbewyse het dus volgens die OG ontbreek om ‘n basis vir ‘n oudit te lewer. Wie ook al vir die opstel van die state verantwoordelik is, se kop moet rol!

Leierskap het dus nie voldoende toesig gehou oor finansiële verslagdoening, nakoming en verwante interne beheermaatreëls nie! Wesenlike wanvoorstellings is in die voorgelegde finansiële state geïdentifiseer. Effektiewe interne beheermaatreëls is nie geïmplementeer wat verband hou met die maandelikse verwerking en versoening van transaksies van eksterne diensverskaffers wat gebruik word om die indirekte leningsboek te bestuur nie.

Die OG verwys ook in sy verslag na onvoldoende interne beheer oor en bestuur van instrumente en modelle wat die verwagte kredietverliese moes monitor. Dit is nie gereeld gekalibreer nie en met betroubare krediet-insetdata opdateer nie. Dit het daartoe gely dat die OG nie die meting van verwagte kredietverliese op alternatiewe maniere kon bevestig nie en was dit nie in staat om vas te stel óf aanpassings aan die netto lenings en voorskotte nodig was nie.

Bestuur het dus nie toesig gehou oor die ontwikkeling, implementering en monitering van aksieplanne om tekortkominge in terme van interne beheer wat verband hou met sekuriteit wat vir lenings vereis word soos vereis deur Internasionale finansiële verslagdoeningstandaarde nie, aan te spreek nie!

In terme van verkryging en kontrakbestuur, is sommige goedere, werke óf dienste nie deur middel van ‘n billike, deursigtige en mededingende verkrygingsproses verkry nie! In sekere gevalle waar kontrakte verval het, is nuwe verkrygingsprosesse nie gevolg om nuwe diensverskaffers aan te stel nie en is daar geen goedkeuring gegee nie.

Die Landbank se bestuur het nie ‘n effektiewe menslikehulpbronbestuurstrategie geïmplementeer om te verseker dat daar stabiliteit en voldoende opvolgbeplanning vir sleutelposisies is nie. As gevolg hiervan is die beheeromgewing van die Landbank negatief deur die aantal bedankings in hierdie sleutelposisies, beïnvloed.

Die bestuur het nie die nakoming van toepaslike wette en regulasies nagegaan en gemonitor nie. En het ook nie tesourie-instruksie in terme van die hernuwing en verlenging van kontrakte met diensverskaffers wat die indirekte leningsboek namens die bank bestuur, gevolg nie. Nog minder is die toepaslike risikobestuursaktiwiteite geïmplementeer om te verseker dat risikobeoordelings, insluitend die oorweging van likiditeitsrisiko’s en kredietrisiko’s, na behore toegepas.

Geen wonder die Land Bank se kontantreserwes of fondse wat hy vir korttermyn- en noodfinansieringsbehoeftes hou, het byna met 80% tot R700 miljoen, vergeleke met R3,2 miljard die vorige jaar, gedaal!

Die vlakke van onbevoegdheid kan nie daar gelos word. Koppe sal moet rol! So kan dit nie voortgaan nie.

Navrae:

Christo van der Rheede

Agri SA, Uitvoerende direkteur

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The Auditor-General’s damning report on the status of the Land Bank’s financial sustainability necessitates an urgent intervention. Whoever was responsible for the financial loss of R2,8 billion must be held accountable. This and many other challenges have compelled the AG to express serious doubt as to the ability of the Land Bank to continue operating as a going concern.

The adverse audit opinion cannot be ignored – heads must roll at management and governance level! This also applies to Treasury, which is responsible for oversight. It is unlikely that they were unaware of what was coming because the financial crisis at the Land Bank did not occur overnight.

In her report, the AG attributes the problems at the Land Bank to an exodus of competent managers, a lack of oversight by the National Treasury (which represents the South African government as sole shareholder of the bank), the downgrading of the bank’s credit rating by Moody’s, and drought conditions which had made it difficult for farmers to repay their loans. This, however, is merely the tip of the iceberg.

The AG’s report also refers to a lack of internal control measures implemented by management to effectively offset credit losses or a decline in the value of extended loans or the collateral offered when loans are applied for.

The AG also mentions that the financial statements submitted for auditing were not presented in accordance with the prescribed financial reporting framework and were not supported by complete and proper records as required by law! According to the AG, there was also a lack of sufficient, appropriate audit evidence to serve as basis for an audit opinion. Whoever was responsible for compiling the statements should be held accountable.

This means that the leadership did not exercise adequate oversight with regard to financial reporting, compliance and related internal control measures! Material misstatements were identified in the financial statements that were submitted. Effective control measures were not implemented in relation to monthly processing and reconciliation of transactions of external service providers used to manage the indirect loan book.

In her report the AG refers to insufficient internal control over and management of instruments and models for monitoring expected credit losses. These were not regularly calibrated and updated with reliable credit input data, which meant that the AG was unable to confirm the assessment of expected credit losses by alternative means or whether adjustments were required to net loans and advances.

Management, therefore, did not adequately oversee the development, implementation and monitoring of action plans to address shortcomings in terms of internal control relating to the security required for loans, as prescribed by international financial reporting standards!

In terms of procurement and contract management, some goods, works or services were not procured in accordance with a fair, transparent and competitive process. In certain cases where contracts had expired, appropriate processes were not followed to appoint new service providers and no approval was granted in this regard.

The Land Bank management failed to implement an effective human resource management strategy to ensure stability in and adequate succession planning for key positions, with the result that the control environment of the Land Bank was negatively impacted by the number of resignations in these positions.

Management failed to check and monitor compliance with the relevant laws and regulations and also did not follow the Treasury instruction in terms of the renewal and extension of contracts with service providers who manage the indirect loan book on behalf of the bank. Moreover, appropriate risk management activities were not conducted to ensure that risk assessments, including the consideration of liquidity and credit risks, were properly performed.

No wonder the Land Bank’s cash reserves or funds held for short-term and emergency financing purposes had declined by almost 80% to R700 million compared to R3,2 billion in the previous year!

This level of incompetence cannot be overlooked. Heads must roll. This situation cannot be allowed to continue.

Enquiries

Christo van der Rheede

Agri SA, Executive Director