Independent Electoral Commission 2012 Annual Report briefing

Meeting report

Independent Electoral Commission 2011/12 Annual Report briefing
Ms Pansy Tlakula, Chairperson, Independent Electoral Commission, gave an overview of the activities of the Independent Electoral Commission (IEC) in the year. Its international work had increased phenomenally, with many requests from other organisations both in Africa and other countries, for technical assistance in election management and the observation of elections.  

The IEC had received several awards in recognition of the work it was doing in respect of its efforts to make elections transparent, especially its Result Scanning Project. The various awards were outlined (see attached presentation for full details).

The Auditor-General (AG), in the 2010/11 Annual Report, had expressed some concerns about policy development, and so IEC management had reviewed, and made new policies. There were also some concerns around the  accessibility of voting stations and distances people had to walk to get to them. This had to be addressed.  

In the last local government elections there had been a record-breaking turnout of 57%. This could be attributed to a massive voter education campaign. There had also been less spoilt votes.

Internally, IEC managed to retain its staff, with low staff turnover.

In the previous financial year, IEC had received a qualified audit opinion from the AG, owing to expenditure relating to payment of electoral staff and the leasing of municipal electoral offices. There had also been an emphasis of matter relating to irregular expenditure, since IEC’s internal controls were found wanting. Management had promised that it would attend to these matters. It had done so successfully, and this year it had achieved an unqualified report, with no emphasis of matter. However, irregular expenditure had occurred and this had to be addressed. Other areas requiring attention were a comprehensive HR strategy and plan as well as the development of ICT policies and IT governance. The IEC still trained electoral staff just before elections. It was looking for a way to develop a more sustainable model for electoral staff training.

Mr Mosotho Moepya, Chief Executive Officer, IEC, noted a typographical error; the presentation did relate to the year ending 2012, not 2011.

He outlined the vision, mission and organisational values, and stressed that “being ethical, honest and truthful” was of utmost importance to the credibility of IEC when declaring elections free and fair and announcing the outcome of elections. He outlined the strategic goals (see attached presentation), and noted that the activities were divided into five programmes. Each programme had a number of Strategic Objectives and performance indicators.

He noted that under Programme 1, nine meetings were held with national stakeholders (against a target of six), and 29 meetings were held with international stakeholders (against a target of 14). This corroborated the Chairperson’s statement that the IEC attracted mounting interest from the international community.

Under Programme 2, IEC had managed to review 23 policies, far exceeding its targets. However, only 93% of the annual risk based internal audit plan had been implemented, against a target of 100%. There was a 7% deviation from the approved Internal Audit Plan, due to the longer time required to complete the provincial audit reports and required quality assurance

Under Programme 3, the target of 96% set for distances between boundaries of voting districts, and voting stations, which should be 7.5 km in urban areas, and 12.5 km in rural areas, was achieved. In addition, the number of checks of the voters’ roll against national population register was achieved, with 12 checks. The IEC had managed to release the 2011 Municipal Election Results in three days, half of the target of seven.

The target for voter turnout was exceeded, with 57% of eligible voters having voted in the 2011 municipal elections. In the previous two municipal elections, voter turnout did not exceed 48%.

Under Programme 4, 89 321 voter education events were held, against a target of 3 314, and 157 projects with strategic partnerships were done, against a target of 50. A total of 1.89% of cast ballots was spoilt, against a target of a maximum of 1.6%.

Under Programme 5, 198 226 electoral officials were trained, against a restated target of 196 000. The introduction of special votes required retraining of presiding officers and deputy presiding officers categories as well. The 1.1% increase in trained staff was due to the introduction of voting centres that required additional staff, which were not part of the original plan.

Financial Report
Ms Fiona Rowley, Chief Financial Officer, IEC, delivered the presentation on the financial report. She reiterated that IEC had obtained an unqualified audit opinion with no emphasis of matter. One issue was raised in respect of irregular expenditure. Improved management and monitoring had reduced the overall level of irregular expenditure from R233 million in 2010/11 to R42 million in this year. The key reason for irregular expenditure was the failure to indicate the allocation of preferential procurement preference points, mostly in relation to quotation requests. This was a new requirement of the AG. Although the internal audit unit had acted immediately to correct it, some expenses had already been incurred. All policies and procedures, documents and templates had been reviewed. A number of procurement workshops had been held to disseminate the new information to the relevant staff. Work in this area would continue, but Ms Rowley was confident that the numbers would be reduced even further in the current financial year.

She explained that the financial statement were prepared on the accruals, not the cash basis of accounting. IEC had collected R1.4 billion in revenue during the previous year, compared to R854 million in the current year, and a rollover of R21.6 million had been allowed from March 2012 to the current financial year. There had been an increase in administration fees, which were R828 million, because of subsistence and travelling expenses for electoral staff and election materials printing expenses. The assets figure remained almost the same. The reduction in Inventories and Cash and equivalent levels were due to material and money spent during the elections. The R562 million included the rollover previously indicated, and this was normal for an election year, whilst the amount of R37 million was realistic for a year which fell outside an election period. The Increase in Trade and Other receivables reflected the move of the IEC offices into commercial offices with R4 million going to rental deposits. R13 million was paid for election facilities, and R7 million for software. She also noted the changes in operating leases and trade and other payables, from one year to the next. IEC had attempted to shorten pay cycles and pay all creditors in 30 days. R4 million was reflected under Foreign and Local Aid Assistance, which was a fund the IEC held for Department of Cooperative Governance and Traditional Affairs (COGTA) Traditional Council Elections. This was the unspent portion of the fund for this project.

Discussion
Mr M Mnqasela (DA) expressed appreciation for the quality of the presentation and the quality of work done by the IEC. However, he questioned the cases where targets for meeting were exceeded, and only 93% of the risk based audit plan was implemented.

Mr Mnqasela agreed that it was difficult to set accurate targets, because it was impossible to plan for, spoilt votes, but he asked how IEC tried to minimise this risk.

Mr Mnqasela asked how the R42 million in irregular expenditure had arisen.

Ms G Bothman (ANC) said the breakdown of the R42m was explained as due to “human error”, but it was unacceptable, because it was a recurrence of what happened during the previous financial year. She wanted to know how IEC would deal with that. Although very little money was effectively lost under the irregular expenditure, policies had to be put in place to assist the IEC to stay within the confines of the law.

Mr Moepya explained that “irregular expenditure” seemed to suggest that the R42 million had disappeared. This was not so. Irregular expenditure was expenditure that did not comply with the strict prescripts for a tender, particularly around procurement scoring. IEC had done a few transactions where it applied the scoring, but it did not indicate that scoring. He stressed that all funds were accounted for.

Ms Rowley added that the full breakdown of the R42 million, and how it was incurred, appeared on page 97 of the Annual Report (AR).  Some of the issues arose in the year under review as a result of efforts to clear up procurement processors. For instance, R3 million was actually incurred in this year, because officials had failed to obtain the tax clearance certificate in a previous financial year. The internal audit function had also implemented new procedures around compliance checking. It now had an internal compliance unit which checked every transaction before it was released. This would prevent this kind of error from happening again in the future. 

A Member mentioned that the IEC should not become complacent, as there were constant concerns around electoral staff payment. Every big election was a new experience and the IEC should be very vigilant.

Ms Rowley elaborated further. R6 000 in irregular expenditure was incurred when an official selected the wrong vendor, and this was a purely mathematical error. She would hesitate to claim that human error could ever be eliminated. The net loss, in the whole R42 million of irregular expenditure, was R1 700 incurred when the wrong vendor was selected, based on the application of the PPPFA scoring.

Both of the next two categories related to failure to indicate, in the IEC’s requests for quotes or proposals, how it was going to allocate the ‘20’ part of the 80-20, or ‘10’ part of the 90-10 scoring, in terms of the Preferential Procurement Policy Framework Act (PPPFA). The law had changed in this year, with new regulations under the Act being introduced in December 2011. Entities no longer had discretion as to how they wanted to allocate those preferential points, but the amount would not appear as “irregular”  until it had been incurred, and this would persist for amounts that were paid in the future, but under contracts signed in the past.

The last category of irregular expenditure was post event purchase orders. A delegation from the accounting officer was only regarded as valid if an individual carried out and complied with all the IEC’s internal procurement processes. One of the internal processes was that no individual within the organisation should commit the IEC to expenditure, without a written and official purchase order. In these cases, the purchase orders were created after the service was delivered. The events were tracked and logged, and this was to do with internal processes. The  Internal Audit continued to do battle with irregular expenditure, to eliminate it completely.

Mr Mnqasela said that there had been problems with staff members employed by the IEC recently, as reported in the press, and called for an explanation on what led to the problem.

Mr Terry Tselane, Deputy Chairperson, IEC,  replied that IEC management received a letter from a group of IEC employees calling themselves ‘Concerned IEC Employees’, but who did not otherwise identify themselves. The letter was sent a letter to this Committee, SCOPA, the media and certain political parties, the Public Protector and Mr Bantu Holomisa. The IEC wanted the Public Protector to complete her investigation and would not duplicate her work. Matters rested with the Public Protector at the moment.

Mr G McIntosh (COPE) congratulated the IEC on being a centre of excellence in the country. It had the advantage of regular cyclical work. He asked how the voters’ roll was checked against the national population register of Home Affairs, on a monthly basis.

Mr Moepya noted that there were 23 million people on the voters’ roll, and births, attainment of 18 years, and deaths were all checked electronically each month.

Mr McIntosh understood from the presentation that the IEC had a challenge in securing schools as voting stations for the IEC, and he asked what the problem had been.

Mr Moepya said the majority of elections venues were schools. The amount paid for rentals were basically to allow the venue owner to take out insurance for the building for the duration of the election, in case the building was damaged. This amount had not been increased in a long time. In some cases, school governing bodies did not want the IEC at schools, but the IEC had succeeded in the end. There had also been positive spin-offs, because some schools previously lacking water and electricity had had them installed for the purposes of the elections.

Mr McIntosh asked where the archived and preserved records were kept.

Mr McIntosh asked what a knowledge management strategy was.

Mr Moepya noted that IEC produced massive amounts of data, which would be useless, unless organised in a way that made it accessible. Knowledge management structures made that knowledge accessible. This basically referred to integration of all services of information in a structured way, to cover documents, electronic records, newspapers and others. More scholars were becoming interested in the IEC library.

Ms Tlakula  said that essentially it related to record keeping. IEC was in the process of employing 54 people in the Outreach team, to supplement the 33 currently employed.

Mr McIntosh said one of the interesting points that came out of the census was that more than 90% of South Africans had cell phones, with many having smart phones. He wondered if IEC had considered voting via smart phone.

Mr A Gaum (ANC) congratulated the IEC on achieving an unqualified audit. The team worked hard, but the next election would be the big test and he hoped it would run smoothly. He asked when South Africa would be ready to vote online, as voters in the USA had done during the last elections.  

The Chairperson said that e-voting was done in India, but she was not comfortable with it.

Ms Bothman said some SMS messages went to recipients via America, which said a lot about the possibility of messages being intercepted and interfered with. She too felt that e-votes would be in the same risk category.

Mr Tselane replied that, personally, he loved the idea of e-voting, but media articles had stated that there were concerns in the USA about the effect of the super-storms and destruction could cause to e-voting. There were many different versions of e-voting. Some used touch screens, but the question was what would happen if electricity were to fail, or batteries go flat. Some advocates of e-voting also argued that a parallel manual process had to be followed, as a fall-back position. In addition, it was possible that cell phone voting could be manipulated, so that voters, who were not necessarily in private at the time of voting, were manipulated into voting a certain way. That also affected the secrecy of the individual vote. All economic and socio-political factors had to be taken into account.

Ms Tlakula  agreed that e-voting was an interesting development. The IEC had conducted some desktop research, and had discovered that some first-world Countries, like Belgium, had experimented with electronic voting systems and subsequently went back to manual voting.

Mr Moepya added that smart phones could be very complicated. The question was what problem e-voting was trying to resolve. Technology and electronics could be applied in many different ways in the voting process. The IEC would soon publish the results of its desktop study, looking at different countries where e-voting was done, and assessing how well it had worked. He quipped that a cartoon in USA had shown queues of people at the manual stations, avoiding the e-voting stations.

Mr Gaum asked whether something could be done during the next election to make the results available more quickly.

Ms Tlakula  replied that the law required the IEC to release the results of a voting poll within seven days of the election. The IEC released the information within three days. The reason why it was not faster that this was because of quality assurance, since IEC made sure there were no anomalies and unresolved queries by the time the results were released. She hoped the next election would go smoothly, but added that top management combined had more than 100 years of experience with elections.

Mr Gaum said the opposition parties had proposed amendments to electoral legislation, and he asked how far this process was, and urged IEC to approach the Committee well in time with any amendments, to avoid last minute crises and court cases.

Ms Tlakula  noted that the IEC could amend the Electoral Act, by making proposals to the Minister of Home Affairs. The IEC planned to deal with legislative amendments in July 2012, but during that period, the then-Minister was appointed as Head of the AU. A new Minister had now been appointed. The IEC had a meeting with the new Minister in the previous week to discuss its proposal, and would submit it formally the following week. The Minister would then initiate the process. She asked that the Portfolio Committee keep the IEC advised of the progress of the proposals.

Mr McIntosh asked what the thrust of the proposals was.

Ms Tlakula  replied that the main issue was voting by South African citizens living overseas. Shortly prior to the 2009 elections, there had been a Constitutional Court challenge to the existing Electoral Act, which had then only allowed certain categories of South African citizens living abroad to vote. These were the diplomatic service, those who were overseas for business, tertiary education, and temporarily on business. The Constitutional Court struck down the relevant section, saying there was no rational basis to discriminate against any category of citizen, and said that all citizens of South Africa living overseas must be allowed to vote, and that the IEC must amend the Act to ensure that its decision was reflected. However, there were other matters that the Court did not address. The first was whether the IEC was obliged to provide registration facilities for South African citizens overseas, who were not registered at yet The court only dealt with national ballots, not provincial and local ballots. The legislative amendments now proposed sought to deal with all issues, and also included some amendments of a purely technical nature.

Ms Bothman asked why the Minister’s Office was not under a programme.

Ms Bothman commented that the Outreach under Programme 4 was interesting and important, but she did not understand how 33 permanent staff could do justice in reaching 50 million people.

Mr Moepya agreed that Outreach needed attention. There were 33 permanent employees for outreach, but in an election year, the IEC used extra staff, and capacity provided by partners and other service providers. During election years, the IEC had an expansion – staff programme to deal with issues.

Ms Bothman also referred to the number of spoilt ballots, reflected in previous questions, and said voter education needed to be ongoing, not only during elections. This was very important to restrict spoilt papers.

Ms Tlakula  said it was difficult to pin targets for voter turnout and spoilt ballots, but in line with the AG requests, IEC tried to set them. They were both outside the control of IEC, but the numbers of spoilt papers was dropping.

Mr Tselane added that some ballots would be spoiled, in protest. Others might spoil their papers by accident, as a result of a lack of education. IEC had a duty to make sure that voters were educated enough to not spoil their votes for the second reason.

Ms Bothman asked when the IEC held meetings with communities, and asked if they were included in the overall category of meeting with stakeholders. She asked about the impact in communities.

Ms Bothman said the AG’s report raised the technicality that the IEC had failed to pay people within 30 days. If this persisted, it could lead to qualifications, so the IEC had to correct this.

Ms Bothman noted that two cases against IEC had been dismissed by the CCMA, but no reasons were given. She suggested that more details were needed, as the AR was a public document.

Mr Norman Du Plessis, Deputy Electoral Officer, IEC, said he would follow up on the two CCMA cases and would respond in writing.

Ms Bothman said that Members had to be told more about the unavailability of municipal managers to assist the IEC in doing its work, and asked how IEC would correct the situation so that employees were focusing fully on the IEC work.

Ms Bothman noted that the AR did not set out the details of the IEC’s international work and its impact.

Mr Moepya said the IEC did have detailed reports on the work done overseas. It could share these reports with members.

Ms Tlakula noted that the points raised in relation to making the Office of the Chairperson and the Office of the CEO into separate programmes were interesting, and related to governance. There were challenge, in the Chapter 9 institutions, with the role of full time Commissioners against the role of the Secretariat, and some debate whether programmes were for commissioners only, or the whole organisation. IEC had appointed Professor Mervin King to assist with formulating a governance framework for Chapter 9 institutions.

In the meantime the IEC had programmes for the Members of the Commission to interact with political role players, like portfolio committees, Ministers, and the Office of the President. There were specific programmes that IEC had set for itself, against which it could be measured. It had to be strengthened.

           

Mr Moepya said that IEC had, after the 2010/11 audit, perhaps been hyper-sensitive about putting extra controls in place to monitor everything, and in the process of focusing intensely on some issues, others may have been moved down. Management, however, did go systematically through the process, noting its challenges, and setting dates. Nothing in the internal audit programme had been missed out. When the IEC met with the Committee, it did make notes of all issues raised.

Mr Du Plessis said that payments were monitored weekly, to ensure that they were made in 30 days, but there were some cases where individuals’ bank accounts may have been closed, and it took some time to get them re-activated. In service delivery, there was no payments done beyond 30 days.

Ms Rowley added the IEC had not only reviewed its procurement policies and Standard Operating Procedures (SOPS) in the past year, but had reviewed documentation around finance and internal controls. At least four procurement workshops were held every year, attended by colleagues from the provinces, where all new information was shared and disseminated. A communications campaign published and disseminated across all local offices. Each of the workshops focused on a theme, such as budget, procurement or financial services.

The Chairperson asked whether the four workshops took non-compliance into account, as it was raised by the AG.

Ms Rowley replied that one of the prime focus areas of the procurement workshop was non-compliance, and it was also raised as part of the monthly exception reporting. The four workshops were essentially train-the-trainer workshops, so that the attendees then had to go back to their various provinces and go and disseminate the information there.

Mr Du Plessis added that there were two areas where the IEC was struggling with compliance, namely, in travel and catering. Often officials had to travel at short notice, or catering must be arranged at short notice, with purchase orders being raised after the event.

The Chairperson asked for further details about the case against the IEC.

Ms Tlakula  explained that the IEC had appealed to the Constitutional Court. In the run-up to the 2011 municipal elections, political parties had to submit a list of their candidates to the local municipality. The IFP could not submit its candidates to the local municipality., and instead tried to submit the list to a provincial office, who refused to accept the list.  The IFP challenged the decision in the Electoral Court, which ruled in favour of the IFP. IEC appealed to the Constitutional Court, where the decision was in favour of IEC.

Ms Bothman wanted to know why the IEC partnered with three auditing firms, including KPMG.

Mr Moepya replied that the three companies did auditing services for the IEC. It had a panel for a number of reasons. It had to make sure of capacity. It employed KPMG, but also had to deal with emerging audit firms, to comply with Broad Based Black Economic Empowerment. This was a progressive model that also provided checks and balances. It worked well for the IEC.

Ms Tlakula  added that the internal auditing function of the IEC only employed two full time staff, with the rest being outsourced.

Mr Moepya added that this arrangement assured that the staff stayed current, in terms of auditing practices, which would have been difficult if they were permanently employed.

Ms Mathebe noted the comment that in the election periods in 2009 there were missing ballot papers. She asked what IEC was going to do about that, and how it would address non-compliance.

Mr Moepya said where the IEC talked about securing local offices it meant having a local office in every area. The question raised related to the 2009 Elections in Mpumalanga. This issue had been dealt with. The IEC had safe areas in every municipality. Special votes brought specific and special challenges. Special votes were cast two days and one day before the election date, and these had to be kept safe somewhere. The IEC worked closely with the security agencies, and arrangements were in place to keep those ballots safe.

Ms P Petersen-Maduna (ANC) asked what percentage of people with disabilities was employed by the IEC.

Mr Moepya replied that IEC had a 2% target, and had reached 1.6% in employing people with disabilities, full-time. However, it had not previously captured data on those with disabilities working on special projects, but was doing so now. IEC teamed up with institutions and advocacy groups working with people with disabilities as service providers in this regard.

Mr McIntosh asked whether the IEC discussed with the new Minister whether the local government elections and national elections would be held on the same day.

Ms Tlakula said that this had not been discussed with the new Minister. The IEC had never been formally approached about that subject.

Mr Mnqasela referred to the PPPFA, and asked if IEC thought that this would be an issue in future.

Ms Rowley replied that the changes in PPPFA came into effect on 7 December 2011. They related to the need to advertise. She was reasonably confident that the IEC’s application of these requirements would eliminate descriptions of irregular expenditure, but the AG raised other issues that might become problematic in the future. IEC had engaged with the office of the AG early on, in order to address the issues, and she was fairly confident that a clean audit would be obtained.

Ms Tlakula  added that the qualified audit report in the 2010/11 financial year had been of concern and IEC wanted to avoid a return to that situation.

Mr McIntosh said he thought the IEC set a standard of performance which was good for the country.

The meeting was adjourned.