Border Management Authority Bill: deliberations; Government Printing Works & Electoral Commission 2015/16 Annual Reports

Meeting report

Brieifing by IEC on the 2015/16 Annual Reports
Mr Glen Mashinini, Chief Executive Officer, tendered his apology for not being accompanied by all delegates.

Mr MlungisiKelembe, Head: Commission Service, briefed the Committee. Strategic outcome oriented goals included: to strengthen governance, institutional excellence and professionalism, to enable business processes at all levels of the organisation; to achieve pre-eminence in the area of managing elections and referenda, including strengthening of a cooperative relationship with political parties; and to strengthen electoral democracy. In providing summary outcomes in respect of performance information,a total of 26 of the 33 targets (79%) for performance indicators were achieved. The IEC programmes included administration, electoral operations and outreach. The risk based annual internal audit plan was submitted to the Audit Committee on 29 April 2015 and elements were approved during the course of the year to allow work to continue. The overall annual plan was not however approved by the 30 June deadline set in the performance indicator. It was however approved during the course of the year.

Ms Fiona Rowley-Withey, Deputy Chief Electoral Officer: Corporate Services, noted that the basis of preparation remained unchanged from the prior year and that the financial statements encompassed the reporting as specified in the Public Finance Management Act (PFMA). The annual financial statements hadbeen prepared in accordance with relevant accounting standards. There were no changes in accounting policies.Audit outcome on the annual financial statements was an unqualified opinion on the annual financial statements. As disclosed in note 30 to the financial statements, the constitutional institution incurred irregular expenditure for the year ended 31 March 2016. This was as a result of non-compliance with the Preferential Procurement Regulations and the PFMA. The full extent had not yet been quantified and was at the time disputed and would be completed by 31 March 2017. As at March 2016, total revenue was R1 533 936 805 and expenditure was R1 411 935 176. The deficit on disposal of assets was R3 338 621.

Mr Mashinini thanked his colleagues for compilation of a comprehensive report and expressed his gratitude for the support the IEC received from Members and other stakeholders during elections. The Department of Home Affairs (DHA) was a key state department working with the IEC and, without its support; the IEC could not achieve its mandate. As an accounting officer, the Commission had led the IEC in its efforts to realise its objectives, it had been on top of the issues through its subcommittee, and was pleased by and large to save matters that were still outstanding in its engagements. Most objectives were achieved as they were set out. He asked Members to read the IEC report in the context of consideration of effects of municipal elections. Electoral operations were massive and very complex, and it was a period that the IEC was faced by unprecedented challenges and the leadership of the IEC was able to rise to that. The IEC was faced by unprecedented legal challenges.

Discussion
The Chairperson said South Africans had doubted whether elections would be held. Elections were held in stony conditions but this could not affect the integrity of the IEC, the result was fair and credible. The Commissioner stuck to his guns and steered the ship and produced the results majority of South Africans were happy with. This convinced the Committee that the IEC’s integrity remained intact. Whether there were litigations or not, the integrity remained undisturbed. Litigation affected IEC operations. However, the IEC was regressed its operations according to the Auditor General’s opinion.

Mr D Gumede (ANC) congratulated the team of the IEC for the job of elections well done. The IEC made South Africans proud. He applauded the integrity of the elections. He also acknowledged the misconceptions of some people that elections might have been unfair as it was reported by the media. Were these election-related issues resolved or addressed? He was happy that the IEC targets were exceeded. He expressed his concerns however over financial performance and internal audit. The internal audit did not do its job. He sought clarity on what was the internal audit action plan, on Riverside office, and on irregular expenditure.

Mr MHoosen (DA) recognised the work of the IEC that it had done. It proved to be an independent entity. He sought clarity on the study on public perceptions, and expressed his concern over how the IEC conducted itself during elections and felt that the IEC’s senior members were abused by the ANC due to the position of the IEC on election results.

Mr A Figlan (ANC) was pleased with the performance of the IEC generally and sought clarity on reasons of non-compliance resulting in irregular expenditure, on what measures were taken with regard to the Riverside office, and on the persistent challenges arising from the previous financial year.

The Chairperson stressed that compliance to Supply Chain Management was key to operations and functioning of the IEC. One could expect high level of discipline for non-compliance. He sought clarity on what the IEC could do to free the internal audit. It had been difficult for the internal audit to assist.

Mr Mashinini acknowledged warm congratulations and stated that they would be conveyed to the team of the IEC.On public perception on the integrity of the IEC, it was alleged that the Commission was summoned by the ruling party. On these perceptions, the IEC issued the statement that followed the publication of these perceptions. It stated that the IEC operated on the basis of collective decisions and this was extended to include provision of response to the media. Likewise, the Commission was expected to have a meeting in the previous week and the meeting was postponed due to Judge Makanya, a member of the Commission, having lost his mother. Due to such bereavement, the meeting was postponed. The Commission would speedily respond to those allegations. Since its inception, the IEC saw itself as promoting common understanding, collective resolution of issues, and multiparty democracy. Ongoing interactions took place on multiparty platforms. The IEC engaged with all political parties to look into and address all issues raised by them. The IEC was not summoned by the ANC; rather the IEC made a request to meet with the ANC to discuss mutual concerns. There was nothing to defend on these circumstances. It was bilateral engagement. Some of the matters were matters that could be referred to the PLC. The media statement or headlines were not matters to be responded at the time of briefing as they were matters that the Commission was still seized with. Some matters that were raised by the DA were addressed to the Minister of Home Affairs. The Minister had provided appropriate responses to these questions. These questions related to disciplinary and Riverside Office matters. The lease of Riverside Office was in dispute and was a matter before the court.

Irregularity related issues flowed from the previous years and an application was made for National Treasury to have them condoned. The IEC was waiting for response. On accountability, the disciplinary action was underway. It could be approached with caution because there were labour and constitutional principles that ought to be observed.

The IEC had an independent panel entrusted with internal audit. The IEC’s organogram was being reviewed in order to give power to some officers to conduct internal audit. This was due to the fact that the IEC was facing challenges in relying on external services. External auditing failed to meet key legislation requirements.

The Chairperson said the IEC should find a way of reviewing its procurement system. However, he reiterated that the IEC performed well and he would arrange a time in the future to reflect on the elections and to look at the areas that could be approved. The Committee learned much from this engagement.

The IEC was excused.

Government Printing Works on the 2015/16 Annual Reports
Ms Thandi Moyo, Acting Chief Executive Officer, GPW, took the Committee through presentation. She noted that the Ministers of Finance, Home Affairs and Public Services approved the business case and GPW was established as a government component on 9 October 2009. As a government component, the GPW delivered security printing services to government. The GPW had achieved seven unqualified audits inclusive of the 2015 clean audit. Its financial viability was dependent on its ability to generate revenue from services rendered. Although the GPW experienced increased outputs, service delivery was still negatively affected by human and material resource constraints. The lack of experienced and qualified senior managers, artisans and administrative personnel impacted on service delivery, resulting in the GPW being compelled to outsource certain functions. 2016 key projects included printing of the smart ID card. Generally, its works included printing of the passports, identity books, smart ID cards, examination books, and government gazettes. For the 2015/16 annual year,revenue was R1 138 249 000 and profit for the year was R383 134 000. The GPW experienced irregular expenditure of R32 239 000 and was in the process of having the total amount of irregular expenditure condoned by National Treasuyr. This notwithstanding, the GPW had undergone great transformation in its business processes, technology, products and services over the past 20 years. With regard to demographic transformation, female represented 51 of its workforce population. Black Africans represented 81%, followed by coloured, 9%. With regards to overall performance, 23 out of 26 targets were successfully achieved.

Discussion
The Chairperson said that the GPW was an entity whose performance was constant. No changes were always expected. He sought clarity on why the GPW did not agree with AG’s finding regarding B-BBEE points awarded.

Mr Figlan asked why the total number of printed gazettes did not change since the inception of the GPW and why the GPW was not expanding to offer services beyond South African borders and on whether it was happy with its domestic profits.

Mr Hoosen sought clarity on irregular expenditure of R32 million.

Mr Gumede sought clarity on human resources capacity and the GPW’s development, on whether it had capacity to compete with its potential and perspective competitors, on whether it, in its operations, bore in mind that it was a security department. He remarked that the GPW had to be at high operational level for the protection of South Africa. He felt that the forthcoming Printers Bill would change the overall operation of the GPW and sought clarity on whether there was any transitional measure to protect the operations of the GPW.

The Chairperson sought clarity on irregular expenditure. The problem of irregular expenditure was due to the lack of internal auditing. He also sought clarity on the demographic transformation, especially recruitment of people with disabilities and on what would be operational costs.

The GPW responded that GPW started to work on the Bill two years ago. The Bill would facilitate the GPW to be a state-owned company. The motivation put forward was linked to the issue of governance. As a state-owned company, the GPW would have a board that would strengthen the governance framework. Althoughthe leadership of the GPW reported to the Minister, it lacked a good structure of governance; hence it lacked a board that could conduct oversight. Another motivation was about attracting people with critical skills and recruiting new skilled employees. The Artisans used the GPW as a training ground. Once they gained skills, they left the GPW. There were two other competitors in the printing sector. Given that the GPW provided low salaries compared to its competitors, the GPW’s workforce was declining.

The GPW had identified 25 positions needing people with critical skills. It had adopted an approach of filling these positions through grooming their own skills through facilitation of some students to further their studies. On the question of security, difficulties were flowing from the Department’s failureto differentiate between security documents and non-security documents.

On attracting skills from outside South Africa, the GPW responded that there was engagement with the Department of International Relations and Cooperation (DIRCO) and it had promised to assist it by finding skills. South Africa should be proud that it was among few countries that were printing their security documents. On the question of sustainability, the GPW responded that the GPW was was sustainable.

Mr Hoosen, referring to irregular expenditure, sought clarity on whether the transaction was a single or multiple.

The Chairperson sought clarity on why the GPW was tampering with its values.

Ms Thandi responded that the GPW was committed to complying with its values of reliability, integrity, accuracy and stakeholder satisfaction. In some cases, emergency or urgency affected the production flow. This caused some delays on certain production.

The Chairperson remarked that urgency or emergency could not be grounds to justify a violation of the law. The GPW could not deviate from complying with rules.

The GPW delegates were excused.

Deliberation on the Border Management Authority Bill [B9-2016)
The Chairperson believed the outstanding issues between the DHA and National Treasury (NT) in respect of managing and controlling borders had been solved. A document was submitted to the Committee containing the agreements between SARS and the DHA. After the input of the Department of Justice and Constitutional Development, the Committee consulted legal advisors who produced their legal opinion and the document was distributed to Members. Immediately after tabling the BMA Bill, there were issues that that Chairperson tried to get clarity on and the DHA responded to those issues.
Mr Mukhuseli Apleni, Director of General, DHA stated that there were no outstanding issues between the SAPS and DHA regarding their functions in managing borders and that all constitutional matters were resolved. Regarding National Treasurer, in the previous meeting, there were issues of differentiating between the role of the SAPS and the BMA and these issues were solved. Agreement was drafted and signed by both parties.

Mr Apleni noted these agreements resulted in the amendment of the Border Management Bill. He stated that in line four of the Preamble of the Bill, the phrase “that facilitates secure travel and legitimate trade” was deleted so as to read: “The Bill further recognised that there was a need for integrated and coordinated border management in accordance with the Constitution, international and domestic law”. Certain definitions were deleted and substituted, including definitions of airspace, border management, border protection functions, and defence. Further amendments were effected with regard to clauses 2, 9, 14, 15, 17, 18, 19, 25, 31 and 36 as well as title of chapter two.

Mr Hoosen appreciated the explanation given by Mr Apleni in respect of conclusion of agreements but sought clarity on what would happen to 25 000 personnel who were mandated to control the border. Reference should be made to the complexities that were involved if they operating under the BMA.

Mr Gumede remarked that 99% customs were collected at step one and that it was on step three where it could be checked if laws were complied with. If the 99% was collected at customs, he fully agreed with the approach taken by the DHA.

Mr Apleni stated that not all cargos were opened. The one percent could not be ignored because it was important. Cargos that were not opened ought to be checked to determine whether they complied with rules.

The Chairperson guided Members through the Bill page by page and asked that they raise their concerns. The primary issue raised by the Bill was that the BMA would be in charge of all ports of entry. He also suggested that there should bea deputy Commissioner who could assume the duties of Commissioner in his absence. The BMA was a huge entity which could not be led only by a Commissioner without a deputy commissioner. The officials should be appointed by the President in consultation with the Minister or approved by Parliament.

Mr Gumede seconded the Chairperson

Mr Hoosen said there were some aspects that needed more clarity.

Mr Gumede remarked that Members needed time to go through the Bill clause by clause.

The Chairperson said that there would be an opportunity to discuss the Bill next Tuesday when the Committee would also hear from National Treasury. The spirit was that all shareholders were interested in seeing the BMA fully operational.

The meeting was adjourned.