Leaders going through the mill to ensure a better future
An internal commission of inquiry into “murky” areas of financial maladministration, alleged tax irregularities and a dearth of corporate governance, has been conducted by highly respected retired Judge Meyer Joffe.
This “clean up” was initially called for by some of the Board’s outgoing leadership. Spearheading it were Board Chairman Jeff Katz and Treasurer Raymond Goss and one or two others who shared their sentiments. They were disgruntled by the way things were being run.
They were instrumental in driving the internal commission of inquiry after they discovered what they called “irregularities” that needed to be cleaned up and ironed out in the interest of good governance, transparency, honesty and integrity. Their aim was to streamline the organisation’s financial and structural management.
The findings were clear: There was no theft of communal funds discovered, however the report revealed weaknesses in areas pertaining to corporate governance and administration.
Cleaning up the Board was essential, because it serves a vital representative function in the community, standing up against anti-Semitism and racism, helping to promote good relations and understanding between Jews and all people of South Africa.
The report, which was released two weeks ago, has been kept under wraps, but was made available to the SA Jewish Report this week.
The commission of inquiry headed up by Judge Joffe, newly-elected Chairman Shaun Zagnoev, newly-elected Treasurer Eric Marx and Jeremy Droyman, received written and oral submissions and, from this, their findings were presented to the National Executive Committee of the Board a fortnight ago.
The inquiry found irregularities and ineptitude in the administration of a number of trusts set up to either fight anti-Semitism or to look after country communities such as those in places like Potchefstroom, Nelspruit, Parys and Uitenhage.
The report also found a tax irregularity which resulted in Beyachad – the umbrella body encompassing the Community Security Organisation, the Zionist Federation and the SAJBD – applying to SARS under the voluntary tax disclosure programme (VDP).
Now that the report is out, Katz, Goss and former vice-chairman, Doron Joffe, have opted not to continue working on the Board, choosing to decline any further positions at the SAJBD’s national conference on Sunday. Among their reasons was the need for “fresh new leadership”.
However, Goss, said that when trying to probe the financial mechanisms and workings of the Board, he was often met with hostility. “It became impossible to do my job. I thought for the sanity of the Board, which is so critical for this country and which does such an amazing job, it was best to remove myself,” he told the SA Jewish Report this week.
Goss and Katz believe their “vision to clean up the Board” has been fulfilled and they feel confident that the way has been paved for the new leadership.
Katz, who has served 15 years at the Board, two as chairman, declined to stand for honorary president, a position traditionally taken up by the outgoing chairman. He said that if you don’t have a fresh crop of leaders, you encourage “institutionalised (I wouldn’t say bad) but I’d say behaviour that isn’t vetted”.
In recent months, the Board has been plagued by a series of unpleasant internal squabbling and infighting among some of its most senior directors. This has led to a power struggle between certain members, all of whom are unpaid professionals who spend hours volunteering their time for the welfare of the community.
Goss regretted that things became ugly when he and Katz started digging into the irregularities, which arose several years prior to his tenure. They found that all the parties were not “aligned” on how to address these issues.
This leadership friction reached fever pitch with him and several others who welcomed the commission.
Through this process he felt at times “sidelined and ostracised” and that there was underhand lobbying behind the scenes.
The role of the treasurer, he said, was to make sure the Board had the “financial muscle” to do its job and it had whatever resources it needed to achieve those objectives.
“The reality is that times are tough, resources are dwindling and there are shortfalls,” he said.
The community was hard-pressed to step up efforts to combat rising anti-Semitism and BDS and this required more funding and resources. Currently the Board is running at a R2m shortfall this past financial year.
The United Communal Fund raises money for Beyachad, which in turn apportions budgets to the various organisations, including the Board. The Board’s shortfalls had to be met either by additional fundraising from an already cash-strapped local community, or off shore, which wasn’t ideal.
In trying to decipher a governance trail with regards to certain cash withdrawals from the country community trusts, Goss and Katz were met with a measure of resistance. A certain “murkiness” arose between the Board, the UCF and Beyachad, which they both felt needed to be addressed.
The inquiry looked at the country community trusts in detail to see exactly how these are run, managed and structured. It checked who ran the trusts, whether they were audited and who had signing power over them. The report found poor governance in this area.
There were two withdrawals from a particular trust. In the first, a withdrawal was loaned to the CSO to help fund additional security measures during Yomtov – it fell within the mandate of the trust in fighting anti-Semitism.
The second was to fund a “cash flow crisis”. It was noted that these funds were repaid shortly after they were withdrawn.
Goss noticed that when the trusts were frozen at his insistence, it put considerable strain on the Board’s budget, and this he found concerning.
The inquiry brought to light the need for a radical improvement in “record keeping and filing systems” of the country community trusts, and the need for “a complete tightening up of governance and lines of communication, and financial reporting,” said Marx.
According to Marx “there are many lessons to be learnt in the way the country community trusts are managed.
“Everyone has acted in good faith; there has been no theft and no misappropriation of funds,” insisted Zagnoev.
Zagnoev and Marx were very positive and hopeful that the newly-elected Board would usher in a new chapter and that the findings of the report were a step in the right direction.
A committee has been set up to investigate all issues of corporate governance and to put measures in place to rectify all shortcomings, they said.