IEC & GPW 2021/22 Annual Performance Plans; with Minister and Deputy Minister

Home Affairs

07 May 2021
Chairperson: Acting: Mr M Chabane (ANC)
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Meeting Summary

Video: Portfolio Committee on Home Affairs
Annual Performance Plans

At a virtual meeting, the Committee was briefed by the Independent Electoral Commission of South Africa (the IEC) and the Government Printing Works (the GPW) on their Budgets and Annual Performance Plans (APPs) for 2021/22.

Members were informed that the IEC’s election and registration costs for the 2021/22 financial year encompassed a total budget of R1.99 billion. The budget for the IEC for the 2021/22 financial year is R2.31 billion. Members were disappointed to hear that the IEC had especially noted the additional funding pressures resulting from the financial impact of the COVID-19 pandemic.

Members welcomed the briefing made by the IEC who was applauded for doing its best to work towards obtaining a clean audit outcome. However they had noticed a decline in the number of voters showing up on election dates. Members noted that the budget for goods and services was reduced in the year of the local government elections. Out of concern they asked ‘Will this decrease not negatively affect the IEC’s preparations for the local government elections, particularly with regard to voter education and awareness campaigns’; and ‘Is the budget sufficient to ensure that all the required safety and hygiene protocols are adhered to on the scheduled registration and voting days’?

Members heard that there are 23 000 voting stations around the country with the following staff complement recruited and trained: 58 000 registration officials and a further 207 000 personnel for the voting day. The personnel required to conduct the elections amount to R 500 million in costs (27% of the budget).

The Committee wanted to know ‘What is the policy of the IEC to fill its critical vacancies’? and ‘What is the impact of the budget cuts and financial restraints regarding unfilled vacancies’?

The Committee noted the commitments made by the IEC for the upcoming financial year, especially given the election year for local government. Members expressed concerns regarding the preparedness of the IEC to host the local government elections in the midst of the COVID-19 pandemic and asked for clarity on what health and safety measures would be implemented during voting days. Concerns were raised regarding the low voter turnout that has seen a decline in voter participation from 89.3% in 1999 to 65.34% in 2019. Emphasis was placed on the need to ensure that youth voters participate in the elections. The Committee noted the reported irregular expenditure of R 20 million, of which R 12 million was condoned. Clarity was sought on how the IEC will address the remaining amounts to ensure a clean audit outcome.

Regarding the new online registration platform for the upcoming elections in 2024, Members asked for a briefing from the IEC on its progress; Members appreciated the deployment of voter management devices but asked for clarity on how these devices were procured; and asked further for more clarity on the voting management system and other technologies that would be implemented by the IEC. They found it worrisome that this went hand in hand with the reduction in training of staff and asked ‘How will the IEC ensure that its employees are able to embrace the technological changes’?  With regard to elections being cancelled the Committee asked ‘Are there any contingency plans in place in the event that the elections have to be cancelled’? And ‘What will happen to contracts that are in place for the elections if it gets cancelled’?  The Committee wanted to know ‘Why has the budget for goods and services allocated to party funding seen an annual drop from R 30.4 million down to R 13.7 million in the 2021/22 financial year’? The Minister reminded Members that the expenditure of the IEC is significantly lower during non-election years, which was also lowered by the impact of the COVID-19 pandemic and national lockdowns during the 2020/21 financial year. The procurement of the voter management devices and the voter registration weekends are huge cost drivers.

The Committee was briefed by the Government Printing Works (GPW). The GPW is a South African security printing specialist that deals with the printing of passports, visas, birth certificates, smart card identification documents and examination materials, as well as government stationery and publications, such as tender bulletins and government gazettes. The GPW outlined 18 performance targets for the 2021/22 financial year, with critical targets aligned to the Strategic Plan, to ensure that all outcomes and desired impacts are achieved. The GPW is expecting total sales of R1.45bn for the 2021/22 financial year, with its gross profit being estimated at R535.44 million. A surplus of R144.93 million is expected for the 2021/22 financial year, with expectations of increasing the annual surplus over the succeeding financial years. A budget has been allocated for the management of COVID-19, which has been capped at R3 500 000 as the COVID 19 regulatory infrastructure is securely in place and the current budget is to maintain and uphold the standards that have been set. The GPW has developed protocols for the management of the COVID-19 pandemic and has put in place an enterprise-wide risk management process, inclusive of business continuity management, to ensure that risks are being managed at strategic and operational levels.

Members asked whether there was a timeframe in place for the GPW’s engagement with the five SADC countries, as outlined in its APP; the GPW to explain why this specific target has been lowered from previous financial years  ‘What have been the effects of these engagements with the SADC countries regarding generating sales for the GPW’? Members raised concern regarding the drop in certain targets from previous financial years but welcomed the shift towards ensuring that the entity generates revenue or gets customers from the African continent as a whole. The Committee asked for more information about the GPW’s target of 90% achievement of the implementation of the internal audit plans. They found this a backwards trend as the historical situation is achieving this target between 94% and 100%. They asked ‘Are there specific reasons for this decline’? The GPW has not submitted its annual financial statements on time for the last two financial years. ‘What measures are put in place to ensure that the financial statements are submitted on time to achieve a clean audit outcome from the AGSA’?

Members noted here that there was a significant increase in the sundry expenses of the GPW from a few hundred thousand Rand to millions in the next three financial years. They asked ‘What do these sundry expenses encompass to justify this increase in expenditure’? ‘What are the reasons that the GPW is holding on to R 500 million in cash and not investing it in financial ways that can generate interest’? It was crucial to ensure that the assets of the GPW were generating money. Regarding the question on the reasons that the GPW is holding on to R 500 million in cash, Members heard that the GPW is amending its policies to enable it to create and maintain a diversified portfolio to generate more revenue. This also necessitates due consideration of the underlying challenges, and the need to balance investments with capital available for expenses. On the issue of the significant increase in the sundry expenses, the GPW responded that this includes the costs of the entity moving into new premises in the process of having two head offices. These costs include maintenance and the full capacitation of the new building.

Meeting report

Introductory Remarks
Mr Eddie Mathonsi, the Secretariat of the Committee, noted the apologies tendered by Chairperson Bongo and Ms L van der Merwe (IFP). This necessitated the election of an Acting Chairperson for this meeting. If more than one person is nominated, the Committee would have to vote.

Mr M Chabane (ANC) was elected as the Acting Chairperson.

The Acting Chairperson convened the virtual meeting and welcomed Members and the delegations from the Independent Electoral Commission of South Africa (IEC), the Government Printing Works (the GPW), and the Ministry of the Department of Home Affairs (DHA).

The delegation from the IEC consisted of Mr Glen Mashinini the Chairperson, Ms Janet Love the Deputy Chairperson, Mr Masego Sheburi, the Deputy Chief Electoral Officer: Electoral Operations, Ms Dawn Mbatha the Chief Financial Officer, Ms Akhtari Henning, the Deputy Chief Electoral Officer: Corporate Services, Mr Mawethu Mosery the Acting Deputy Chief Electoral Officer: Electoral Operations, and Mr George Mahlangu the Chief Executive: Party Funding.

The delegation from the GPW consisted of Ms Alinah Fosi the Chief Executive Officer, and Mr Sihle Ngubane Chief Director: Production.

The purpose of this virtual meeting was for the Committee to be briefed by the Independent Electoral Commission of South Africa (the IEC) and the Government Printing Works (the GPW) on their Annual Performance Plans (the APPs). The first item on the agenda was the briefing by the IEC on its APP and Budget for the 2021/22 financial year. The second item on the agenda was the briefing by the GPW on its APP and Budget for the 2021/22 financial year. The last item on the agenda was for the Committee to be briefed by the Minister of Home Affairs on the allegations of corruption levelled against the Executive Management of the GPW and for the Committee to enter into discussions in this regard.

The Acting Chairperson emphasised the need for all entities presenting to the Committee to adhere to the timeslots dedicated for its briefings as the time allocated for the meeting was limited. Members had received the documents relevant to the briefings and were somewhat already familiar with their content.

Briefing by the IEC on its 2021/22 APP

The first item on the agenda was the briefing by the IEC on its APP and Budget for the 2021/22 financial year. Mr Sy Mamabolo, the Chief Electoral Officer, presented the briefing to Members.

Opening remarks from the IEC:

Mr Mashinini thanked the Committee for the opportunity to brief Members on the APP and Budget for the 2021/22 financial year. The budget for the 2021/22 financial year is an election budget, because it includes the key financial resources and quantum required to deliver the fifth local government election of the country.

The cost of elections is usually spread out over two financial years. The abnormal circumstances of the COVID-19 pandemic have had an impact on the upcoming elections. It has resulted in a loss of lives and fiscal challenge for the country. The major activities surrounding the elections also had to be adapted. As a result, the election budget has been compressed into a single financial year. The budget also contains a significant roll-over from the previous financial year of R1.3 billion that has yet to be ratified by the National Treasury. However, the IEC takes comfort in the sense that the process of engagement with National Treasury has been underway with agreements being formed. He assured the Committee that the roll-over is nothing to be alarmed about, but more a concern regarding the compression of the budget.

For the 2021/22 financial year, about 70% of the budget comprises three primary cost centres. The first cost centre is the acquisition of new technologies and a new generation that revolutionises the management of the voters’ roll, which includes instant voter registration and address capturing, and the live tracking of voter participation on election days. This will significantly enhance the integrity of the elections, and close the loopholes and challenges faced by the IEC in previous elections. The technology will be piloted and used as a dry run during the registration weekends prior to the elections. The second cost centre relates to ensuring that there is adequate temporary staff and capacity to serve as registration, voting, and counting officials. There are 23 000 voting stations around the country with the following staff complement recruited and trained: 58 000 registration officials and a further 207 000 personnel for the voting day. The personnel required to conduct the elections amount to R 500 million in costs (27% of the budget). The third cost centre relates to the procurement of all electoral materials, logistics, and storage requirements that must be fulfilled amounting to R 200 million (10% of the budget).

The IEC’s budget were also constrained by the budget cuts resulting from the COVID-19 pandemic and its impact on the country’s economy. The announcements regarding the dates of the elections and the registration weekend will be made in due course. Some interventions of the IEC relating to the pandemic include the move towards an e-nomination portal for candidates, and stakeholder engagements to review previous elections. Despite the fiscal austerity constraints, the IEC has managed to provide a balanced budget that will ensure that there is no impact or compromises to the elections. The IEC is still in negotiations with the National Treasury to secure expropriation adjustments to fund the safety and health requirements of the elections in the midst of the COVID-19 pandemic.

Mr Mashinini said that the IEC is pleased to table its amended APP for the 2021/22 financial year which takes into account the impact of the coverage of its operations, and the reduction in public face-to-face voter education in the move towards electronic and social media-based voter education and stakeholder engagements.

Contextual background

The Strategic Plan and the APP of the IEC has been revised due to the COVID19 pandemic, its related restrictions and budget cuts. The following have been considered in formulating these documents:

the consultative process held in the 2018/2019 period;
the National Development Plan for 2030 and the integrated development planning in the public sector;
the Revised Framework for Strategic Plans and the APPS;
an environmental analysis was performed noting innovations in the digital age and its consequential impact on electoral democracy;
increased litigation on electoral processes, economic and fiscal climate in South Africa; and
The imperatives for the IEC to deal with extant and future challenges in the electoral process.

The IEC outlined the election and registration costs for the 2021/22 financial year which encompassed a total budget of R1.99 billion broken down as follows:

voting management devices of R626.74 million (31% of the budget);
electoral and expansion staff for electoral events to the value of R545.8 million (27% of the budget);
communication and media campaigns to the value of R81.62 million (4% of the budget);
voter education events and strategies of R75.91 million (4% of the budget);
the recruitment and training of electoral staff to the value of R94.64 million (5% of the budget);
registration and voter maintenance of R36.87 million (2% of the budget);
registration and voting material with distribution costs of R195.9 million (10% of the budget);
elections operation centres of R55 million (3% of the budget);
voting station rentals, infrastructure, and support of R67.75 million (3% of the budget);
ballot paper printing and distribution of R70 million (4%) of the budget); and
Other costs such as ICT services, security, research, readiness tests, and identification items to the value of R140.83 million (7% of the budget).

Targets of the APP and measuring performance:

Programme 1 Administration
The objective is to achieve the strategic outcome of strengthening institutional effectiveness at all levels of the organisation. It also provides the overall strategic management of the IEC, as well as centralised support and financial management services.

The first output for this programme is to exercise leadership and governance, monitoring and evaluation to ensure the effective implementation of the IEC’s core mandate, strategic outcomes, and outputs, as aligned with the corresponding budget allocations and risk mitigation. The output indicator is the number of quarterly reviews of the strategic risk register by the Executive Risk Management Committee within 30 days after the start of the next quarter. A target of four quarterly reviews is set for the Medium-Term Expenditure Framework period (the MTEF period) between the 2021/22 and 2023/24 financial years.

The second output relates to providing a cutting-edge, stable, and secure ICT environment that meets all functional needs of the IEC and supports innovative business processes. The output indicator is the minimum annual percentage network and application systems availability measures in hours, as per the available system-generated report. A target of 97% achievement (translating to 2 232 hours) for the MTEF period, including the current financial year.

The third output relates to the recruitment and retainment of a talented permanent staff complement to meet operational requirements, as well as constitutional obligations. The output indicator will be the number of permanent staff positions filled per annum. A target of 90% filled posts (translating to 1 113 positions) calculated pro-rata over the year has been set for the MTEF period.

The last output relates to the effective management of financial resources in compliance with legislation. The output indicator and target was set for the IEC to obtain a clean audit outcome from the annual external audit processes by the Auditor-General of South Africa (the AGSA).

Programme 2 Electoral Operations
The IEC reported that it manages the delivery of free and fair elections by striving for excellence at voting station level, ensuring accessibility and suitability of voting facilities and processes, managing results, maximising electoral justice for all stakeholders in the electoral process, compiling and enhancing the credibility of the voters’ roll, ensuring election of representatives; and continuously improving the legislative framework.

The only output for this programme relates to the delivery of free and fair elections in accordance with the applicable electoral timetables to ensure the credible execution of the IEC’s mandate. The output indicator relates to the number of elections set aside. A target of zero elections set aside was tabled for the MTEF period, including the current financial year.

Programme 3 Outreach
The IEC reported that the outcome of this programme relates to citizens and stakeholders being informed and engaged in the electoral democracy in the country.

The first output relates to the provision of impactful research and thought leadership to strengthen electoral democracy. The output indicators include the number of research initiatives achieved per annum, and the number of thought leadership interactions achieved per annum. The first output indicator has a set target of two initiatives for the MTEF period, and the second has a set target of ten leadership interactions for the same period between the 2021/22 and 2023/24 financial years.

The second output relates to the advancing and promoting of electoral processes through communication campaigns on diverse platforms to sustain visibility across the electoral cycle. The output indicator includes the recorded reach across multi-media communication platforms, including digital and print media, television, and radio broadcasting services. The IEC set out specific targets per media and communication platform in this regard.

Programme 4 Party Funding
The IEC reported that it focuses on the strategic outcome of contributing to the enhancement of transparency in elections and party funding. The programme manages party funding and donations in compliance with legislation and strengthens cooperative relationships by providing consultative and liaison platforms between the IEC and political parties and candidates, using systems, people and processes that are sustainable. It also provides effective management of the registration of political parties and processing of the nomination of candidates for various electoral events.

The first output relates to the management of party funding in compliance with the relevant legislation. The output indicator includes the number of disbursements to represented parties per year. A target of at least four disbursements (one each quarter) was set for the MTEF period.

The second output relates to the provision of consultative and cooperative liaison platforms between the IEC, stakeholders, and potential contributors to promote funding of a multi-party democracy. The output indicator is the number of liaison sessions held with stakeholders and potential contributors to the Multi-Party Democracy Fund. A target of ten sessions has been set for the MTEF period.

The budget of the IEC

The budget for the IEC for the 2021/22 financial year is R2.31 billion. For Programme 1 Administration a total of R765.21 million has been budgeted. For Programme 2 Electoral Operations a total of R1.32 billion has been budgeted. For Programme 3 Outreach a total of R201.7 million has been budgeted. For Programme 4 (Party Funding) a total of R22.05 million has been budgeted.

The overall budget of the IEC will be decreased in the 2022/23 financial year to an estimated R1.71bn as it is a non-election year. The estimated budget for the 2023/24 financial year is R2.33bn.

Regarding budget cuts, the IEC reported that there has been a budget cut of R174.68 million for the 2021/22 financial year, R248.76 million for the 2022/23 financial year, and a budget cut of R240.28 million for the 2023/24 financial year. These budget cuts will have an impact on the programmes of the IEC.

For Programme 1 (Administration), the implications of the budget cuts include that the IEC is unable to implement the full result of an organisational review conducted in 2017 due to a lack of funding. The organisation’s permanent staff structure is currently only funded for 90% of posts. Another implication is that past and current budget constraints lead to a reduction in the funds available for skills development and training of permanent staff within the organisation. In addition, budget cuts in the 2022/23 financial year will result in the implications of the budget cuts IEC having significantly reduced available resources with regard to the procurement of permanent office accommodation for the national office.

For Programme 2 Electoral Operations, include that the second national registration events ahead of the 2021 local government elections and the 2024 national provincial elections are not funded. Due to funding pressures, the IEC has not been able to give inflationary increases to electoral staff appointed for registration and election events. The last rates adjustment was ahead of the 2016 local government elections. The period of employment for Fixed-Term Expansion staff that is appointed for elections has been decreased by one month for the 2021 local government elections and the 2024 national provincial elections to accommodate reduced budgets. In order to increase efficiencies in the electoral process and to ameliorate intractable challenges especially in the counting and capturing of results, the Commission has proposed an e-voting pilot project. The foremost consideration in the use of technology is to drive down the costs of elections and increase operational efficiencies. This initiative is currently unfunded.

Programme 3 Outreach, the implications of the budget cuts include that due to funding pressures, the IEC has not been able to give inflationary increases since 2016 to fixed-term staff appointed during elections to perform outreach activities. The period of employment for these categories of staff also had to be decreased by one month for the 2021 local government elections to accommodate budget cuts. Furthermore, requested staff increases could not be accommodated and the Democracy Education Fieldworker programme has been cancelled. Reduced budgets affect the ability of the organisation to fully fund other initiatives to actively promote and foster awareness and participation in electoral processes.

Programme 4 Party Funding, the implications of the budget cuts include that the recruitment of staff in the Political Parties’ Funding Unit has been slowed in order to get a more realistic sense of the volume and intensity of work in this unit. The Represented Political Parties’ Fund has not been affected.

The IEC noted the additional funding pressures resulting from the financial impact of the COVID-19 pandemic. The MTEF budgets have been put under pressure as funds need to be redirected towards unplanned and ongoing COVID-19 related costs. For Programme 1 Administration, the COVID-19 pandemic has necessitated the procurement of Personal Protective Equipment (PPE), the deep cleaning of offices, the testing of staff returning to work, and the provision of remote access capabilities to staff working from home. These new protocols have been implemented for all of 272 IEC offices nationwide and over 1,000 employees. For Programme 2 (Electoral operations), a significant financial impact is anticipated as new COVID-19 protocols will have an immense impact on operations related to by-elections and the local government elections in 2021. National Treasury will be approached for additional funding though the Adjustment Estimates process in 2021 in this regard. For Programme 3 Outreach, it was reported that this programme has traditionally been carried out through human interactions and civic events.

However due to the COVID-19 pandemic, different media and platforms will need to be implemented. The financial impact of this transition still needs to be determined.

Another source of funding pressure resulted from the Constitutional Court’s judgment regarding the unconstitutionality of the Electoral Act 73 of 1998. The Constitutional Court has recently declared that the Electoral Act is unconstitutional as far as it requires individuals to contest national and provincial elections only through membership of political parties. The Constitutional Court provided Parliament with 24 months to revise the legislation and the IEC stands ready to offer technical assistance into this process to help enhance our electoral system. The financial impact pertains to the re-writing of ICT applications, the re-training of staff, the possible delimitation of voting districts and the reconfiguration of local offices.

Discussion
The Acting Chairperson thanked the delegation from the IEC for the detailed briefing and the outlining of the entity’s financial position during the upcoming financial years.

Ms L Tito (EFF) welcomed the briefing made by the IEC. She applauded the IEC for doing its best to work towards obtaining a clean audit outcome. It shows that the entity is putting in more effort and taking its work seriously. It is clear that there is a decline in the number of voters showing up on election dates. What other measures do the IEC have in place to improve voter education and registration? She emphasised the need to have a strategy to attract voters to go to voting stations on election days. She asked for details from the IEC on the budget item depreciation in Programme no. 2 (Electoral Services). The public services have not increased the salaries of its employees. Does the IEC plan to increase the salaries of its employees and by what percentage? She noted that the budget for goods and services is reduced in the year of the local government elections. ‘Will this decrease not negatively affect the IEC’s preparations for the local government elections, particularly with regard to voter education and awareness campaigns’? ‘Is the IEC aware that 30 suitcases were found containing IEC materials that were found to be dumped next to the R38’? The materials were found by people who passed by. ‘What has the IEC’s response been in this regard’?

Mr A Roos (DA) appreciated the briefing by the IEC and wished the entity the best of luck for the upcoming financial year to fulfil the tasks it has set out. He appreciated the deployment of voter management devices but asked for clarity on how these devices were procured. ‘What is the policy of the IEC to fill its critical vacancies’? ‘What is the impact of the budget cuts and financial restraints regarding unfilled vacancies’? Regarding the new online registration platform for the upcoming elections in 2024, he asked for a briefing from the IEC on its progress. He noted the reported irregular expenditure of R 20 million, of which R 12 million was condoned. ‘How will the remaining amounts be addressed to ensure that the IEC achieves a clean audit in the next financial year’? ‘What specific measures for COVID-19 will be implemented in the upcoming local government elections’? ‘Is the budget sufficient to ensure that all the required safety and hygiene protocols are adhered to on the scheduled registration and voting days’?

Ms M Molekwa (ANC) expressed hope that the briefing by the IEC would be a true reflection of the status of affairs for the upcoming year, as it will ensure that the country is prepared for the local government elections. There is a delayed appointment of staff to the IEC. She asked whether this does not impact negatively on the initiatives to increase voter registration awareness as there is only one month left for voter registration. What measures have been put in place to measure activities such as voter registration campaigns to indicate its success or challenges? ‘What measures are being implemented to increase the amount of youth that are registered to vote and to increase awareness amongst these age groups’?

Mr M Tshwaku (EFF) asked for more clarity on the voting management system and other technologies that would be implemented by the IEC. It is worrisome that this goes hand in hand with the reduction in training of staff. ‘How will the IEC ensure that its employees are able to embrace the technological changes’? What provisions will be made to encourage voting in rural areas that are far from the offices of the IEC? There is another increase in COVID-19 infections once again. What will be the impact on the upcoming local government elections if the country moves to a higher level of lockdown that restricts the movement of persons? If the elections are cancelled, what effect will this have on the budget when materials have already been purchased? ‘Are there any contingency plans in place in the event that the elections have to be cancelled’? ‘What will happen to contracts that are in place for the elections if it gets cancelled’? ‘What measures have the IEC put in place to avoid interference at voting stations’? ‘Will the Committee have enough time to scrutinise the e-recruitment portals and procedures in place’? Regarding the new online voter registration system, he noted that this technological advancement would go a long way to minimise double voting. Hopefully, these new systems will take into account the challenges of rural areas, such as a lack of network coverage. ‘What measures are put in place to ensure that the elections are tamper-proof to avoid its credibility and integrity falling in disrepute’?

Mr K Pillay (ANC) thanked the IEC for the briefing made to the Committee. He noted the IEC’s concerns regarding having only one voter registration weekend. He asked what the plans to having people register door-to-door are. This is a necessity for people who are sceptical to go to voting stations or IEC offices to register given the public health crisis of the COVID-19 pandemic. ‘What measures are put in place to accommodate people with comorbidities or who are too ill to register to vote’? He proposed that the IEC do a full presentation to the Committee on the e-voting system to outline the challenges of the system and brainstorm solutions. In terms of section 190(2) of the Constitution, the mandate of the IEC is to promote voter education and to enhance knowledge of sound and democratic electoral processes. The Chairperson of the IEC has noted the decline in voter participation from 89.3% in 1999 to 65.34% in 2019. This is almost a 20% decline in voter participation, especially among the youth. An indication was given that this is because of inadequate voting education. The IEC’s initiatives to expand on this reach through social media platforms are welcomed. ‘What has the IEC’s observations been regarding youth voter participation’? He stated that it is important to give an indication in this regard to the Committee. ‘How will the IEC measure the impact of its social media voter education campaigns regarding the local government elections’? ‘What is the preparedness of the IEC to host the local government elections in the midst of the COVID-19 pandemic’? Historically, voters have stood in queues and lines outside of voting stations. ‘What measures to implement physical and social distancing will be put in place by the IEC and how will adherence to these measures be monitored’?

Mr M Lekota (COPE) agreed with the concerns raised about hosting the local government elections in the midst of the COVID-19 pandemic. He also asked for clarity on what measures to implement physical and social distancing will be put in place by the IEC to protect the safety and health of voters.

Ms M Modise (ANC) stated that it is encouraging that the IEC takes its work seriously, which is evident from the efforts and work put into the entity’s APP. ‘Will there be a significant drop in the funding to political parties given the implementation of the Political Party Funding Act 6 of 2018’? ‘Why has the budget for goods and services allocated to party funding seen an annual drop from R30.4 million down to R13.7 million in the 2021/22 financial year’? How will this impact the distribution of funds to the political parties? Will there not be a need for short- and medium-term revisions of the targets given the current COVID-19 pandemic?

Responses from the IEC

Mr Mamabolo responded that the strategy for voter education had to be adjusted to minimise the physical interaction of voters to avoid the cross-transmission of COVID-19. The initiatives for voter education will be largely conducted through radio and television broadcasts to ensure that all communities are reached. Voter education will also be conducted through social media channels. It will also be retained through municipal outreach coordinators’ capacity to conduct limited face-to-face interventions, but this will not be the main element of the voter education campaigns. It is concerning that there is a decline in voter turnout at national and provincial elections. The IEC is aiming to improve voter turnout for the local government elections to the 60th percentiles. The IEC has noted the request to brief the Committee on its different technologies and systems that has been adopted and registered its willingness to provide the Committee with such a briefing.

Regarding the question on salary increases, he responded that the IEC approved negotiations for salary increases in terms of its own bargaining mechanisms. The annual negotiations are yet to commence for this year’s salary increases, but the IEC is preparing its position paper in line with the allocations that has been made. Negotiations will be conducted accordingly with the trade unions.

On the question relating to the 30 suitcases found with materials of the IEC, it was reported that the Provincial Electoral Officer in Mpumalanga has been charged with the responsibility of investigating the matter. A report will be tabled soon in this regard and will also be brought to the attention of the Committee when it is available. The preliminary findings have indicated that local staff members were negligent in transporting the materials, but further details will be provided when a full report is available.

The critical vacancies and a reduction in funding necessitate a criticality assessment of each position against the objectives of the delivery of a free and fair election. In this sense, not all vacancies will be declared redundant, but the IEC must conduct an evaluation on a case-by-case basis based on criteria of the position’s necessity to ensure the delivery of the elections.

The proper procurement processes were followed in obtaining the voter management devices, with advice taken from the National Treasury. These devices will be delivered later this month for the purpose of training staff and will operate where there are live interactions with voters. Given the concerns relating to the lack of network coverage, the IEC reported that the voter management devices will also have offline functionalities to curb this challenge. A total of 40 000 voter management devices will be procured. Voting will continue on a paper-based process, and the devices will only be used for verification of voter details. Online registration dates will be announced in due course and serves as a mitigating intervention for the COVID-19 pandemic. The national measures for social distancing will be implemented, including making it mandatory for voters to wear a mask, bringing their own pens, and having sanitation stations. There are ongoing discussions with political parties on how to make special votes easier to decongest the voting stations on election days. People with comorbidities can also be granted a special vote to avoid any physical interactions on the election days.

There will be no reductions in training pertaining to the election days, especially in the training needed on the voter management systems. The targets presented during this meeting was amended last year to take into account the effects and consequences of the COVID-19 pandemic.

Ms Dawn Mbatha, Chief Financial Officer, IEC, reminded Members that the expenditure of the IEC is significantly lower during non-election years, which was also lowered by the impact of the COVID-19 pandemic and national lockdowns during the 2020/21 financial year. The procurement of the voter management devices and the voter registration weekends are huge cost drivers. Regarding the question on irregular expenditure, she responded that the IEC’s amounts have dropped by almost 500% because of the implementation of the AGSA’s recommendations. Consequence management has also been effective with those implicated being dismissed and matters referred to the South African Police Service (the SAPS).

Concluding remarks

Mr Mashinini concluded that it is important for Members to appreciate the context of the budget of the IEC. The abnormal financial situation of the country resulting from the COVID-19 pandemic has had a significant impact on the operations of the IEC. This caused a shift in focus to ensure that, above all else, the integrity and credibility of the upcoming local government elections are not compromised.

The Acting Chairperson appreciated the responses from the IEC. The points and inputs from Members must continue to be taken into account by the IEC as part of its reports and plans of action going forward. The stability in the governance of the IEC is welcomed and encouraged. It is paramount that the weaknesses and challenges are addressed to ensure that the integrity and credibility of the upcoming local government elections are not compromised. He gave the delegation from the IEC permission to leave the meeting.

Briefing by the GPW on its APP (2021/22 financial year):

The second item on the agenda was the briefing by the GPW on its APP and Budget for the 2021/22 financial year. Ms Alinah Fosi, the Chief Executive Officer, presented the briefing to Members.

Opening remarks by the Minister of Home Affairs

Dr Aaron Motsoaledi, the Minister of Home Affairs, stated that the GPW depends on the work done by other governmental departments and entities. The majority of this work comes from the DHA. The GPW is self-financed and is independent of the National Treasury, and heavily reliant on the DHA for work. During the national lockdown period, substantial parts of the services of the DHA were completely closed. This resulted in no revenue generated for the GPW. Despite this, the historically healthy financial position of the GPW has mitigated the effects of the national lockdowns and the COVID-19 pandemic.

Background to the briefing:

The APP was developed based on the revised Framework for the Strategic Plans and the APP for the implementation by the national and provincial spheres of government. The APP outlines all performance targets, outcomes, and indicators that have been set by the GPW to ensure that initiatives are achieved.

Targets in the APP (for the 2021/22 financial year):

The GPW outlined 18 performance targets for the 2021/22 financial year, with critical targets aligned to the Strategic Plan, to ensure that all outcomes and desired impacts are achieved. The targets were allocated as follows: Branch 1 the Office of the Chief Executive Officer, with three targets, Branch 2 Operations and Production, with five targets, Branch 3 Strategic Management, with four targets, Branch 4 Financial Services, with four targets, and Branch 5 Human Resources, with two targets outlined. The GPW then presented the Committee with a detailed breakdown of each of the targets outlined in the APP.

Branch 1 the Office of the Chief Executive Officer (the CEO, the outcomes pertained to the ICT environment, and internal audits. The first outcome pertained to a more secure and protected ICT environment. The output was set as the achievement of mitigating all security vulnerabilities. The output indicator was the percentage of security vulnerabilities detected by the security assessments and subsequently mitigated. The annual target is mitigating 100% of all security risks, with a quarterly reporting period. The second outcome pertained to increasing the ICT servers’ uptime availability. The output indicator was the percentage uptime of the ICT systems, and an annual target of 95.5% was set, with a quarterly reporting period put in place to monitor this outcome. The third outcome was regarding the effective and efficient internal corporate governance to enable organisational performance. The output indicator was the percentage to which the annual internal audit plan was implemented, and an annual target of 90% was set with a quarterly reporting period put in place to monitor this outcome.

Branch 2 Operations and Production, the outcomes pertained to the printing of security materials and government information, including its distribution. The first three outcomes related to the printing of IDs, travel documents, and examination papers to conform to client specifications. The target of 100% was set in this regard, with a quarterly reporting period. The fourth outcome related to the coordination and distribution of government information that conforms to client specifications. The target of 100% was set in this regard, with a quarterly reporting period. The last outcome pertained to the production of security printed materials to client specifications, with a 99% target set and a quarterly reporting period.

Branch 3 Strategic Management, the outcomes pertained to marketing strategies and stakeholder support, strategic support, security management with the following targets: The first outcome was regarding the GPW’s marketing and internal communications initiatives. The output indicator was the percentage of integrated marketing and communication strategy plans implemented, with a quarterly reporting period put in place to monitor this outcome. The second outcome related to the informing of SADC countries of the GPW and its offerings, and the output indicator was set as the percentage of follow-up engagements conducted with potential customers. A target of eight follow-up engagements was set in this regard, with a quarterly reporting period. The third outcome related to the implementation of all business continuity management activities with a 100% implementation target set and a quarterly reporting period. The last outcome related to the 100% approval of the GPW’s security model and its implementation.

Branch 4 Financial Services, the targets included the achievement of an unqualified audit opinion for the 2021/22 and succeeding financial years, the achievement of three positive working capital ratios maintained, the maintaining of the 10% nett profit margins, and the timely submission of quality financial statements, and subsequent monitoring reports.

For Branch no. 5 Human Resources, the outcomes pertained to the youth and women equipped with artisanal and other professional skills, and the capacity of the workforce developed to support service delivery. The targets for this last branch were outlined as follows: The first outcome pertained to the equipping of youth and women with artisanal and other professional skills. The output was set as the implementation of the recruitment plan to fill the identified vacancies and positions. The output indicator was the number of young people and women taken through the Artisan and Graduate programmes. The annual target is 20 unemployed young people and women, with a quarterly reporting period. The second outcome pertained to the capacity of the workforce developed to support service delivery. The output was set as an 80% achievement of the total workforce trained as per the Workplace Skills Plan and identified priorities. The output indicator was the percentage of workers trained. The target for the 2021/22 financial year was 50% of the workforce, 60% for the 2022/23 financial year, and 70% for the 2023/24 financial year.

Budget and financial considerations:

The GPW is expecting total sales of R1.45 billion for the 2021/22 financial year, with its gross profit being estimated at R535.44 million. A surplus of R144.93 million is expected for the 2021/22 financial year, with expectations of increasing the annual surplus over the succeeding financial years.

For its capital expenditure, the GPW outlined the estimated costs as follows: fixed assets and replacements (R298 million), fixed ICT assets (R75 million), fixed assets of furniture (R10 million), fixed assets of equipment (R8.5 million), and costs associated with lease improvements (R150 million).

The GPW has allocated a budget for the management of COVID-19, which has been capped at R3 500 000 as the COVID 19 regulatory infrastructure is securely in place and the current budget is to maintain and uphold the standards that have been set. This budget includes R2 million set aside for professional services, R 50 000 for printing materials, R1 million for cleaning services, and R350 000 for PPE.

Management of the COVID-19 pandemic:

The GPW developed protocols in line with the Department of Public Service and Administration (the DPSA) and in accordance with regulations as issued by the Minister of Cooperative Governance and Traditional Affairs. The Risk Management Strategy and Risk Register were aligned to COVID 19 management after being developed and implemented. Risk assessments were conducted, and the COVID-19 Steering Committee was established. The Steering Committee, inclusive of labour unions, continues to handle matters pertaining to the management of the pandemic and feedback is provided to the Executive Committee on a regular basis.

Unfortunately, one employee passed away from COVID-19 complications in the previous financial year. Two employees have been placed on a long-term ill health leave after testing positive for COVID-19 and being hospitalised. During the 2020/2021 financial year, the GPW suffered massive losses due to the COVID-19 pandemic and the subsequent national lockdown. As the GPW was not classified as essential services, no operations took place. Financial losses were due to the COVID-19 national lockdown since the DHA stopped the issuance of ID’s and passports as a result of the travel restrictions. The GPW could not print passports and ID’s during the same period. The printing of Smart ID cards was also halted in the first quarter of the 2020/21 financial year, owing to the COVID-19 restrictions, and affected the printing of documents.

Management of risk and audit processes:

The GPW has put in place an enterprise-wide risk management process, inclusive of business continuity management, to ensure that risk is being managed at strategic and operational levels. Key documents such as the Risk Management Policy, Risk Management Strategy and the Annual Risk Implementation Plan are annually reviewed, together with the Risk Committee and approved by the CEO. Risk assessments have been conducted periodically and risk exposure areas allocated to various branches to manage and monitor.

Progressive monitoring of risk is then tabled at the management committee meetings as well as the GPW Risk and Audit committees. The post audit action plan is monitored through the audit matrix which is presented by Executive Committee members at every meeting to hold management accountable and ensure resolution of audits. The established Internal Controls Committee (the ICC) is composed of management and sits on a monthly basis to focus on all control deficiencies to facilitate effective resolution of all matters raised by both internal audit and the AGSA. Due to the escalation of the audit process to the AGSA by the management of the, the audit of the 2019/20 financial year has not yet been finalised. The GPW outlined its key risks and the key strategic projects for the 2021/22 financial year to the Committee relating to its Strategic Plan (See the attached presentation).

Discussion

Mr Pillay welcomed the presentation made by the GPW. He asked whether there is a timeframe in place for the GPW’s engagement with the five SADC countries, as outlined in its APP. He also asked the GPW to explain why this specific target has been lowered from previous financial years. ‘What have been the effects of these engagements with the SADC countries regarding generating sales for the GPW’? ‘What work has been done to ensure that the project relating to passports is kept going despite the national lockdowns’?

Mr Roos extended the DA’s condolences for the employee of the GPW who passed away during the COVID-19 pandemic. He asked for more information about the GPW’s target of 90% achievement of the implementation of the internal audit plans. This is a backwards trend as the historical situation is achieving this target between 94% and 100%. ‘Are there specific reasons for this decline’? The GPW has not submitted its annual financial statements on time for the last two financial years. ‘What measures are put in place to ensure that the financial statements are submitted on time to achieve a clean audit outcome from the AGSA’? There is a significant increase in the sundry expenses of the GPW from a few hundred thousand Rand to millions in the next three financial years. What do these sundry expenses encompass to justify this increase in expenditure? What are the reasons that the GPW is holding on to R 500 million in cash and not investing it in financial ways that can generate interest? It is crucial to ensure that the assets of the GPW are generating money.

Ms Molekwa welcomed the presentation made by the GPW. She appreciated the move towards ensuring that the entity generates revenue or gets customers from the African continent as a whole.

Mr Tshwaku commented that the GPW is a state-owned entity. There have been media statements that state-owned entities are struggling to generate profits. He appreciated the liquid financial situation of the GPW and the proper working relationships that are in place. He agreed with Ms Molekwa and welcomed the shift towards exploring other markets in Africa, endorsing Pan-Africanism as the key to our country’s future. ‘What measures have been put in place by the GPW to prevent and eliminate corruption and other wrongdoing within the entity’? ‘What consequence management is applied in this regard’?

Ms Modise asked how extensive the modernisation initiatives of the GPW are and requested an update on its progress. She asked whether the engagements with other African countries have showed any fruits.

Responses by the GPW

Ms Fosi responded that the GPW is in the process of having two head offices, and procurement processes and tender processes are due to start in June 2021. She indicated that the entity has a significant dependency on the DPSA to complete this process of moving into a new building. Regarding the questions on the GPW’s engagements with SADC countries, she stated that countries such as Namibia and the Democratic Republic of the Congo have recently been informed of the products and offerings of the GPW. Eight other countries will be engaged with to ensure that the work of the GPW is available to the continent. The COVID-19 pandemic has had a significant impact on the difficulty of these initiatives.

Regarding the question of the drop in the target of 90% achievement of the implementation of the internal audit plans, it was reported that the GPW’s targets are quite sensitive to the effect of the COVID-19 pandemic. The GPW has internal structures to deal with allegations of fraud, corruption, and financial misconduct that get translated into registers. These structures include the whistle-blowing policy that is currently being implemented, internal audit processes and the GPW’s investigative capacity into such allegations. The HR-units are tasked with dealing with internal grievances.

On the issue of the significant increase in the sundry expenses, the GPW responded that this includes the costs of the entity moving into new premises in the process of having two head offices. These costs include maintenance and the full capacitation of the new building. Regarding the question on the reasons that the GPW is holding on to R 500 million in cash, it was reported the GPW is amending its policies to enable it to create and maintain a diversified portfolio to generate more revenue. This also necessitates due consideration of the underlying challenges, and the need to balance investments with capital available for expenses. The GPW will provide the Committee with the necessary breakdowns of its financial information.

Responses by the DHA

Mr Nzuza Njabulo, the Deputy Minister of Home Affairs, commended the GPW for dealing with the majority of issues relating to finances. The cash equivalences of the GPW are especially important because it has buffered the impact of the COVID-19 pandemic on the state-owned entity. He assured the Committee that despite the decreases in revenue resulting in a reduced profitability of the entity, the financial health of the GPW has been maintained by relying on its profits from the previous financial years.

Dr Motsoaledi commented that there is a need to deal with the temporary positions within the GPW. The appointment of a permanent CEO of the GPW is underway, as well as the position for a General Manger in charge of the production aspects of the entity. It is crucial that the important vacancies must be filled.

The Acting Chairperson thanked the GPW for the presentation made to the Committee and thanked the Ministry of the DHA for the inputs and comments made. The Committee notes and appreciates the work done by the GPW as a strategic entity generating revenue for the government of South Africa. He thanked the Ministry of the DHA for their attendance, and thanked Members for their inputs rendered during the meeting.

The meeting was adjourned.

 

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