1 Presentation to the Portfolio Committee on Home Affairs 13 October 2010

2 Annual Report and Financial Statements for the Financial Year ended 31 March 2010

3 Vision and Mission Vision To strengthen constitutional democracy through the delivery of free and fair elections in which every voter is able to record his or her informed choice Mission The Electoral Commission is an independent and impartial permanent body created by the Constitution to promote and strengthen constitutional democracy in South Africa through the delivery of free and fair elections at all levels of government

4 Legislative Mandate -In terms of Section 190 of the Constitution of the Republic of South Africa (Act 108 of 1996), the Electoral Commission must a.manage elections of national, provincial and municipal legislative bodies in accordance with national legislation b.ensure that those elections are free and fair, and c.declare the results of those elections within a period that must be prescribed by national legislation and that is as short as reasonably possible. -The duties and functions of the Electoral Commission are defined in section 5 of the Electoral Commission Act, These include to a.compile and maintain a voters' roll by means of a system of registering eligible voters by utilising data available from government sources and information furnished by voters

5 Legislative Mandate (cont.) b.compile and maintain a register of parties c.undertake and promote research into electoral matters d.develop and promote the development of electoral expertise and technology in all spheres of government e.continuously review electoral legislation and proposed electoral legislation, and to make recommendations in connection therewith f.promote voter education g.declare the results of elections for national, provincial and municipal legislative bodies within seven days after such elections, and h.appoint appropriate public administrations in any sphere of government to conduct elections when necessary.

6 Strategic Objectives 1Positioning the Commission as a global leader in electoral democracy 2Developing strategy, monitoring project implementation and facilitating independent assurance processes to ensure the effective and efficient functioning of the Commission 3Maintaining systems and procedures which will ensure an accurate and up-to-date national voters’ roll 4Implementing and promoting effective electoral processes that will facilitate the participation of political parties and candidates in the management and delivery of free and fair elections

7 Strategic Objectives (cont.) 5Delivering well-run elections which produce results that are credible 6Educating and informing civil society with a view to optimizing citizen participation in democracy and electoral processes 7Developing and maintaining effective business processes (in respect of legal services, human resources management, support services, financial management, and information and communication technology services) in order to ensure the effective functioning of the Commission

8 Strategic objective 1: Positioning the Commission as a global leader in electoral democracy Managed elections of 99 other institutions. Exceeded target of 36 by 63. Participated in 6 technical assistance programmes. Exceeded target of 4. Observed elections in 4 countries. Achieved target. Participated in 1 study tour to another country. Could not achieve target due to increased number of technical assistance provided to 6 other countries. Hosted 12 international delegations

9 Strategic objective 1 (cont.) TargetPerformance resultReason for variance Reviewing legislation and regulations at least once a year 1 At least four meetings of the FISB per year 1Meetings not possible due to the 2009 NPE

10 Strategic objective 2: Developing strategy, monitoring project implementation and facilitating independent assurance processes to ensure the effective and efficient functioning of the Commission Presented strategic plan to Portfolio Committee on Home Affairs Monthly and quarterly reports were submitted. The A-G found that quarterly reports did not track progress against targets in the approved strategic plan. This is being corrected. Audit Committee met 4 times Risk Management Committee met regularly

11 Strategic objective 2 (cont.) The A-G found the Commission wanting in respect of the following: –Strategic objectives are not SMART. This will be corrected when Strategic Plan is compiled for 2011/12. –Audit Committee did not consist of 3 members. This situation has since been corrected. –Internal Audit did not complete planned work. This was due to preparations for elections.

12 Strategic objective 3: Maintaining systems and procedures which will ensure an accurate and up- to-date national voters’ roll TargetPerformance resultReason for variance 22.6 million registered voters on the voters’ roll – target exceeded by more than Voters’ roll checked against National Population Register monthly Achieved

Strategic objective 3 (cont.): changes in the voters’ roll 1 April March 2010 Eastern Cape Free State Gauteng KwaZulu-Natal Limpopo Mpumalanga North West Northern Cape Western Cape

14 Strategic objective 3 (cont.) Targeted demographical populations where there were registration shortfalls – as a result 84% new registrations were young people between ages of 18 and 29

Strategic objective 3 (cont.): Overall registration activity per age group Age groups New registration s Re- registration same VD Re- registration different VD Total 16 – – – – – – >

16 Strategic objective 3 (cont.) voting stations identified for 2009 National and Provincial Elections Of these, were permanent, were temporary and 57 were mobile. Mobile voting stations reduced by 2%. Exceeded target by 0.3%. Of permanent voting stations, 16% did not have electricity, 6% did not have ablution facilities and 10% did not have running water. Infrastructure task team met twice a year as planned with aim of improving infrastructure at voting stations.

17 Strategic objective 4: Implementing and promoting effective electoral processes that will facilitate the participation of political parties and candidates in the management and delivery of free and fair elections Party Liaison Committee meetings held at national, provincial and municipal spheres. Exceeded target of 494 meetings. 139 registered parties: 106 at national level and 33 at municipal level 6 new parties were registered and 36 parties were deregistered. Registration and deregistration of parties completed within legal timeframes.

Strategic objective 4 (cont.): ward by-elections ProvinceBy-electionsNumber of VDs Eastern Cape27149 Free State1791 Gauteng1352 KwaZulu-Natal33177 Mpumalanga1337 Limpopo423 Northern Cape627 North West212 Western Cape

19 Strategic objective 4 (cont.) 139 ward by-elections were held within 90 days prescribed period – decrease of 14% since 2008/09 Main reasons for ward candidate vacancies: deaths (46), resignations (44) and expulsion (28) 365 PR vacancies were filled within prescribed 35 days Main reasons for PR vacancies in local councils: resignations (218), expulsion (65), deaths (43) Main reasons for PR vacancies in district councils: resignations (22), expulsion (5), deaths (2)

20 Strategic objective 5: Delivering well-run elections which produce results that are credible All local office infrastructure functional and secured in terms of municipal agreements or Commission’s procurement processes. Target achieved. All necessary electoral material, including voters’ rolls, ballot papers and security material, for use in 2009 elections were procured and distributed in time. 100% achievement of target. 100% availability of warehouses at national and provincial spheres

Strategic objective 5 (cont.): 2009 National and Provincial Elections were held on 22 April 2009 Special voting took place on 15 April 2009 (outside the Republic) and on 20 and 21 April 2009 (inside the Republic) Voter turnout of 77.3% exceeded the target of 65%

22 Strategic objective 5 (cont.) Measures to enhance transparency of elections processes included –Auditing of results system –Auditing of results –Scanning of results slips 2009 elections results declared within 3 days. Target exceeded by 4 days.

23 Strategic objective 6: Educating and informing civil society with a view to optimizing citizen participation in democracy and electoral processes civic education interventions. Exceeded target of interventions. Civic education initiatives contributed to enthusiastic participation by voters –Collaboration with various partners and stakeholders –Education materials, including Voter Education illustrated booklet –Democracy TV drama –Outside broadcasts

24 Strategic objective 6 (cont.) TargetPerformance resultReason for variance 10 campaigns conducted per province and 4 campaigns conducted nationally (94) 94 campaigns 6 stakeholder engagements per province (54) 36 stakeholder engagements Time and capacity constraints

Strategic objective 6 (cont.): Summary of interventions ProvinceTargetReachedDifference% Difference Eastern Cape % Free State % Gauteng % KwaZulu- Natal % Limpopo % Mpumalanga % North West % Northern Cape % Western Cape % %

26 Strategic objective 6 (cont.) Voter Satisfaction Survey was conducted on Election Day –54% of voters found political parties to be tolerant during election campaigns and 21% somewhat tolerant –64% of voters took up to 15 minutes to get to voting stations while 22% took between 16 and 30 minutes –96% of voters reported that no-one at all tried to force them to vote for a certain political party –73% of voters were very satisfied with level of Commission’s service and 24% were satisfied

27 Strategic objective 6 (cont.) Time and capacity constraints resulted in some targets not being achieved –3 new publications not developed –Target of 2 research projects not achieved. 1 research project, viz. “Exit Poll” conducted –Publication of occasional papers deferred to 2012 financial year –Library review deferred to 2012 –Feasibility study for museum deferred to 2013

28 Strategic objective 6 (cont.) Hosted 6 media briefings, issued 45 media releases, held one national media workshop and conducted more than 100 interviews Established an efficient public call centre with a dropped call rate of 4.6% Successful programmes and events included: –Women’s month celebrations –Youth Ambassador Programme copies of Annual Report and copies of the Elections Report were printed and distributed

29 Strategic objective 6 (cont.) Media campaign included: –2 radio adverts, produced in all 11 official languages –555 billboards –1 TV commercial Utilised SABC TV, radio, e.tv, community TV, commercial radio, community radio and print media

30 Strategic objective 7:Developing and maintaining effective business processes (in respect of legal services, human resources management, support services, financial management, and information and communication technology services) in order to ensure the effective functioning of the Commission Produced Election Legislation Pocketbooks containing all the prescripts relating to the Electoral Commission Published 16 election notices relating to the 2009 National and Provincial Elections Involved in 12 legal cases. 11 involved vacancies and replacement of municipal councillors 323 contracts and lease agreements were concluded

31 Strategic objective 7 (cont.) Human resources management –806 posts; 94 vacancies on 31 March % of the planned 170 posts were filled. Exceeded target of 50%. –Commitment to ensuring compliance with Employment Equity Act and the numerical goals set out in the EE five-year plan –Staff turnover was 2.9% –Disciplinary action taken against 17 employees for reasons of financial misconduct, misconduct or fraud –12 matters were referred to the CCMA

Strategic objective 7 (cont.) Average sick leave days by rank Rank2008/ /2010 Senior Manager Manager Deputy Manager Assistant Manager Senior Administrative Officer Administrative Officer Assistant Administrative Officer Administration Clerk Messenger / Cleaner

33 Strategic objective 7 (cont.): Employee deaths YearNumber of deathsAverage age of deceased 2007/ / /

Strategic objective 7 (cont): Recruitment, promotions and resignations RecruitedPromotedResigned DCEO / Senior Manager 000 Manager020 Deputy Manager131 AM532 Senior Administrative Officer 373 AO552 Assistant AO82013 Senior Administrative Clerk 110 Housekeeper / Driver

35 Strategic objective 7 (cont.): Staff turnover due to resignations YearNumber of resignations Percentage 2007/ % 2008/ % 2009/ %

36 Strategic objective 7 (cont.) Training and skills development –17 training interventions were conducted at the Centre for Elections Learning – electoral staff members were trained for the 2009 National and Provincial Elections –118 bursary applications were approved –8 interns were recruited

Strategic objective 7 (cont.): Employer-initiated training Course / Learning activityNumber of participants Project Management277 Labour Law87 HR, Payroll and Training34 Occupational Health and Safety17 Accounts Payable25 Employment Equity21 Effective Business-writing24 By-elections training19 Technical Risk Management Awareness 23

38 Strategic objective 7 (cont): Employer-initiated training (cont.) Course / Learning activityNumber of participants Financial management for non- financial managers 40 Induction session15 Election material task team training 7 4x4 Training23 Leadership development14

39 Strategic objective 7 (cont.) Procurement and asset management –Reviewed procurement policies and procedures to ensure alignment with Supply Chain Management requirements –Implemented an electronic procurement system –Targeted BEE and SMME suppliers in order to strengthen the Commission’s supplier database –Conducted stringent due diligence audits on companies under consideration for contracts –Maintained an asset register –Reviewed asset policies, procedures and processes to ensure compliance with the requirements of the PFMA, GRAP and IFRS

40 Strategic objective 7 (cont.) Procurement and asset management –646 contracts awarded to the value of R million –Of these, 405 went to BEE companies (57.91% of total contract value) –Non-SMMEs were awarded only 35.3% of the total value of contracts The A-G found that the Commission did not ensure that bids were advertised in at least the Government Tender Bulletin for a minimum period of 21 days. This has been corrected.

41 Strategic objective 7 (cont.) Primary focus of Information and Communication Technology projects was to provide the necessary support during the 2009 Elections –2009 Elections Results System –Enhancement of the Issue Tracker –Website capacity –Electoral Staff System Enhancements –Call Centre –GIS Support

42 Strategic Objective 7: Finance Services Maintain financial reporting and internal control mechanisms by developing and maintaining standard operating procedures in SAP Liaise and cooperate with the Auditor-General (AG) and Internal Auditors in respect of the External and internal Audit Adhere to PFMA & Treasury regulations and internal policies and procedures

43 Strategic objective 7 (cont) Some targets not achieved due to lack of adequate human resources capacity –Reconciliations not finalised by the 10 th of each month –Payments not made within the prescribed 30 day period –Updating financial directives, policies and procedures –Revising standard operating procedures The above is being addressed by the appointment of suitably qualified staff

44 Report of the Auditor-General A-G expressed a qualified audit opinion for the first time since 2001 Basis of a qualified Opinion Administrative expenditure (Page 130, Note 22) -Operating lease expenses – R The amount presented in the AFS represents the actual expenditure incurred in the current year and was correctly accounted for. The qualification is as a result of the exclusion of the future expenditure based on the lease term and escalations for the 235 MEO offices not taken into considerations as is required by the Accounting standard (GRAP13) Corrective Action: An up-to-date register of lease agreements for national, provincial and local levels is being developed to monitor all data relating to such agreements.

45 Basis of a qualified Opinion (cont.): Subsistence & travelling - R The qualification is based on the amount of R114m paid to temporary electoral staff who worked on election day. From the audit sample the error found by the auditors is R but the total expenditure was qualified. –The payment of the electoral staff members that worked on election day during the 2009 national and provincial elections presented some verification problems. Issues that, amongst others, arose were: Not all staff members turned up for work on election day. Where there was a need for replacement formal employment contracts were not entered into with all the replacement staff members. There were cases where some attending staff members did not sign attendance registers or where a formal employment contract for the day was not entered into or was subsequently mislaid in the process of having to be forwarded from the more than voting stations to central storage points. There were a few cases where staff members that were recruited and trained for election day, as best can be established, did not report for duty but were nevertheless paid as their details were not deleted from the electronic register before the date of payment.

46 Subsistence & travelling (continue…) For audit purposes all expenditure had to be verified by documentary evidence. Staff are allocated to voting stations in terms of a set formula that take voter numbers and facilities into account and that in no instance were more persons paid than was supposed to be the case. Tariffs were predetermined in the electronic financial system of the IEC and that all those who were paid, were paid the correct tariffs. Corrective action: To eliminate these issues for the coming elections the Electoral Commission will concentrate all its efforts to deal with those challenges as best possible. The electoral staff recruitment and payment plans are being reviewed. The possibility of using the registration diary more effectively in place of attendance registers is being investigated

47 Audit Report Basis of a qualified Opinion; Commitments (Disclosure Note) – R (Page 131 Note 25) This a item that is disclosed as required by the accounting standard and does not have an effect on the actual expenditure incurred in the current financial year. The contract commitments disclosed in the AFS are contracts that the commission has either a legal or contractive obligation to make payments in future and were available for audit. The estimated future payments included all the contracts of Commission and not only those that were legal commitments. Corrective action: An up-to-date register is being maintained to assess the nature, extent and value of contractual commitments on a quarterly basis

48 Audit Report All funds expended by the Commission had been accounted for There were no misdemeanours involved in any way as far as the basis for qualification is concerned

49 Accounting Policy The Annual financial statements have been prepared in accordance with effective Standards of Generally Recognised Accounting Practice (GRAP) including any interpretations, guidelines and directives issued by the Accounting standard Board. Financial statements have been prepared on the historical cost basis.

50 Revenue The Commission received R from The Department of Home Affairs; Other revenue consisting largely of investment income of R and sponsorship income of R ; All the funds have been accounted for and disclosed in the financial statements. Page 112 of the Annual report

51 Actual Expenditure vs Budget Summary : Economic Classification Report for the year ended 31 March 2010 EXPENDITURE: Standard ItemsBudget (Including Adjustments Estimate) R’000 Total Expenditure 2009/2010 R’000 Variance – Saving / (over- expenditure) R’000 Variance – % Personnel Expenditure Administrative Expenditure Stock Equipment Land & Buildings (Rental) Professional & Special Services Miscellaneous Expenses65133(68)1.05 Depreciation Deficit on Disposal of Assets Interest paid TOTAL EXPENDITURE

52 Detailed Income and Expenditure Statement for the year ended 31 March R 2009 R INCOME Parliamentary allocation Investment Income (Interest) Political party registration fees Sponsorship income Other income

R2009R EXPENDITURE Personnel expenditure Salaries and wages Remunerative allowances Gratuities ( ) Employer’s contributions Relocation costs Detailed Income and Expenditure Statement for the year ended 31 March 2010

R2009R EXPENDITURE (continued) Administrative expenditure Subsistence Expenditure Hotel Expenditure Travel Expenditure Air Transport Communication Expenditure Study Expenses Advertisements Catering/Entertainment exp Membership and registration Insurance Conference and workshops Printing (Stock) Purchase of Equipment and software

55 EXPENDITURE (continued) 2010 R 2009 R Rented equipment Rental – Land and Buildings Professional and other services Miscellaneous expenditure (30 386) Depreciation and Impairment Deficit on disposal/scrapping of assets Interest paid Total Expenditure Surplus for the Year

56 Audit Opinion Page 105 – The financial statement present fairly in all material respects, the financial position of the Electoral Commission except for the following items that where qualified; –Administrative expenditure (i)Operating lease expenditure (ii)Subsistence and travelling (Temporary Electoral Staff) –Commitments (Disclosure note)

57 Audit Report Basis of a qualified Opinion; Administrative expenditure (Page 130, Note 22) -Operating lease expenses – R The amount presented in the AFS represents the actual expenditure incurred in the current year and was correctly accounted for. The qualification is as a result of the exclusion of the future expenditure based on the lease term and escalations for the 235 MEO offices not taken into considerations as is required by the Accounting standard (GRAP13) -Subsistence & travelling - R The qualification is based on the amount of R114m paid to temporary electoral staff who worked on election day. From the audit sample the error found by the auditors is R but the total expenditure was qualified.

58 Subsistence & travelling (continue…) –The payment of the electoral staff members that worked on election day during the 2009 national and provincial elections presented some verification problems. Issues that, amongst others, arose were: Not all staff members turned up for work on election day. Where there was a need for replacement formal employment contracts were not entered into with all the replacement staff members. There were cases where some attending staff members did not sign attendance registers or where a formal employment contract for the day was not entered into or was subsequently mislaid in the process of having to be forwarded from the more than voting stations to central storage points. There were a few cases where staff members that were recruited and trained for election day, as best can be established, did not report for duty but were nevertheless paid as their details were not deleted from the electronic register before the date of payment.

59 Subsistence & travelling (continue…) For audit purposes all expenditure had to be verified by documentary evidence. Staff are allocated to voting stations in terms of a set formula that take voter numbers and facilities into account and that in no instance were more persons paid than was supposed to be the case. Tariffs were predetermined in the electronic financial system of the IEC and that all those who were paid, were paid the correct tariffs. To eliminate these issues for the coming elections the Electoral Commission will concentrate all its efforts to deal with those challenges as best possible.

60 Audit Report Basis of a qualified Opinion; Commitments (Disclosure Note) – R (Page 131 Note 25) This a item that is disclosed as required by the accounting standard and does not have an effect on the actual expenditure incurred in the current financial year. The contract commitments disclosed in the AFS are contracts that the commission has either a legal or contractive obligation to make payments in future and were available for audit. The estimated future payments included all the contracts of Commission and not only those that were legal commitments.

61 Audit Report Emphasis of matter - Restatement of Corresponding figures This relates to restatement of Financial statements for the periods prior to 31 March This was mainly due to the recognition of Intangible assets which were previously expensed. Restatement was done to ensure the correct application of GRAP 102 (Note 29) - Irregular Expenditure –Irregular expenditure relates to non-compliance with Treasury regulations 16A6.3. The Commission did not obtain Treasury approval to participate in the First Auto, and a written submission was has since been made. –The Commission did not comply with the PPPFA in relation to some payments of goods and services between the values of R and R

62 Irregular Expenditure (Continue…) No action was taken against any official as there was no financial misconduct, it was only a matter of non compliance. National Treasury has been approached for condonation (Note 28).

63 Emphasis of matters (continue…) Non-compliance with PFMA and Treasury regulations Contrary to the requirements of TR and sections 38(1)(f) and 76(4)(b) of the PFMA, several payments due to creditors were settled after 30 days from receipt of an invoice Non-compliance with the PPPF Act and Preferential Procurement Regulations (PPR) Some bids were not advertised in the Government Tender Bulletin for a minimum period of 21 days as required by the Treasury regulations 16A6.3, these bids were advertised for a lesser period than required 21 days.

64 Thank you