The embattled Robben Island Museum Council on Wednesday called in the police to probe corruption at the icon of the anti-apartheid struggle.
But at the same time it contended it had been the victim of "a malicious" conspiracy, and would "raise these matters at the highest level".
On Tuesday a PricewaterhouseCoopers (PWC) forensic audit report recommended police probe how millions of rands of unknown source passed through the account of a former senior employee. They should also investigate kickbacks.
PWC found the council had fallen far short in its procurement and financial control.
"Given the serious nature of the allegations, we will refer this to the police for further investigation," council head and former island prisoner Ahmed Kathrada said on Wednesday.
But he noted that most of the allegations the auditors investigated were found to be false.
Up until Wednesday the council had consistently denied anything had been amiss.
Former political prisoners had first raised concerns about corruption and maladministration. In the wake of a controversy the island's director André Odendaal resigned last year.
Kathrada said Wednesday: "As regards to the shortcomings on procurement noted by the report, council has adopted a comprehensive procurement policy framework.
"Its implementation is constantly monitored by our new chief financial officer, a person of considerable experience.
"We also regularly review the reports of the internal auditors on this matter. A procurement committee is in place and our chief financial officer exercises strict control over contracts entered into.
"(We) have instituted a comprehensive reform of financial systems under the leadership of the new chief financial officer. And we are confident that our present systems of financial management and controls have been dramatically improved."
Kathrada said in the past year there had been "continual allegations" of corruption on Robben Island, yet "very few have been found to have had any substance (and) it can be inferred that some had a malicious motive. We will raise (this) at the highest level."
The council assured the public it would uphold "the good name of Robben Island".