Home Affairs, BMA, IEC, GPW 2022/23 Budget Allocations

Meeting report

Opening Remarks
As a follow-up to the Budget Speech on 22 February, the Chairperson said the Committee would be briefed on the 2023/24 budget allocations for the Department of Home Affairs and its three entities. Thereafter, the Committee would hear about the implications of the recently passed Electoral Amendment Billfor the IEC to implement for the upcoming 2024 elections. Members of the Committee were urged to encourage all those eligible to vote in the elections to do so.

Noting the incident at Home Affairs in Elim, Limpopo, where staff members were held hostage by a foreign national, the Committee should be taken into confidence about the matter as it concerns the safety of both citizens and staff members.

Department of Home Affairs 2023/24 budget allocation
DHA Chief Financial Officer, Mr Gordon Hollamby, said that the expenditure outcomes from the past 8/9 years the Department has spent 100% of its allocation. There is a capacity to spend and since 2013-14 no unauthorised expenditure has been incurred.

In the current financial year, as of January 2023, the overall spending is at 74 percent, this is slightly under the projections for the current financial year. This underspending projection is due to the late receipt of funds for the digitization project. Alongside the passenger name recognition project that has not progressed, leaving an amount of R200 million that has not been used.

The compensation of employees (CoE) remains the biggest cost driver, sitting at 36 percent. The ceiling for CoE is capped at R3.9 billion. As of January 2023, CoE is at 75% of its target, this places the Department in a less pressurised position – allowing the offices of the Department to open during overtime and the festive deployment periods.

Allocations for the 2023/24 budget are increased and are expected to drop in 2024/25. This is due to specific baseline reductions and baseline increases of about R1 billion. This is largely for the Border Management Authority (BMA) and the Independent Electoral Commission.

Self-financing is a mechanism that allows the Department to retain some of the generated revenue, and use it for the purpose defined by National Treasury. The Department uses these funds for the costs incurred for the generation of this revenue, these include but are not limited to: cash-in-transit activities, hospital connectivity, property look and feel, financial accounting, and archives management.

The overall self-financing allocation is R987 million and this will be used for expenses incurred should Treasury allow the Department to do so.

Border Management Authority 2023/24 budget allocation
BMA Commissioner, Dr Mike Masiapato, outlined the legislative mandate from the BMA Act:
- facilitate and manage the legitimate movement of persons within the border law enforcement area and at ports of entry;
- facilitate and manage the legitimate movement of goods within the border law enforcement area and at ports of entry;
- cooperate and coordinate its border law enforcement functions with SAPS, SARS & SANDF, border communities, or any other persons.

The BMA will come into effect on 1 April 2023 and will take over the function of implementing border laws on the ground for the Departments of Health, Agriculture, Home Affairs and Environment. These departments are as a result currently in a process of moving money into the BMA.

An integration agreement has been put on the ground to drive integration, movement of staff, movement of budget from the four departments that are affected by the BMA coming into effect, and the operational costs. This agreement has been signed by the employer represented by the Department of Public Service and Administration, together with the Public Service Co-ordinating Bargaining Council and the three main unions.

The staff complement is about 1 950 coming from the four departments. The threshold for the broader engagements has been met as about 1 600 persons were seen. These consultations were not easy. The Department of Labour has been engaged in this regard and it is satisfied. All issues raised by the staff complement were adequately addressed by both the BMA leadership and the Department of Labour. One of the biggest concerns was around job security.

The current 2022/23 budget allocation has BMA operating as a special branch within DHA. As it stands 60% of the budget has been utilised, with an expected remainder of 10% by the end of the financial year.

Starting in 2023/24, the BMA baseline spending will be R1.3 billion with R1.1 billion going to CoE and R310 million to the running of the programme.

BMA requested R2.6 billion from Treasury with R1.7 billion for CoE as there is the intention of bringing in about 1 000 more border guards as well as system integration and technology deployment for new tools of trade. All of these are critical for a law enforcement authority. Unfortunately only R250 million was granted.

The budget is far from being commensurate with the mandate considering that efficient border management needs more boots on the ground, and even more, deployment of the 4IR technologies for border risk targeting, analysis as well as border patrol.

Based on this reality the BMA is looking at:
- Only bringing on board 400 border guards
- Not filling the positions at the BMA’s permanent structure
- Creating a corporate shared-services model with DHA and this agreement is being finalised.

Independent Electoral Commission 2023/24 budget allocation
IEC Chief Electoral Officer, Mr Sy Mamabolo, based on the 2024 Election budget, the 2023/24 financial year budget is R2.2 billion housed in four programmes bearing 14 outputs. The IEC budget will provide for:
- two registration weekends - one in 2023 and the other in 2024
- revisions to electoral information communication technology
- voter registration
- launch of communication campaigns
- staff expansion programme
- incremental capacity increase of the institution
- recruitment and training of 50 000 registration staff for the upcoming registration weekends
- expansion of the local delivery model and local storage sites
- identification and contracting of registration stations
- maintenance of the network of offices countrywide.

Taking note of the recently passed Electoral Amendment Billthe IEC is looking to accommodate the operational and financial implications of this. This includes the re-writing of ICT business applications, particularly the candidate nomination system to take account of independent candidates and signature requirements; the logistics information system; and the results system.

The IEC has some funding pressures, particularly in (i) workshops and training, (ii) the projected increase of ballot papers by about 50% to accommodate the regional ballot, (iii) the expected increase in the number of contestants resulting in longer ballots and possible reconfiguration of ballot papers, (iv) a public education programme of the revised electoral system and (v) workshops for new electoral contestants.

IEC Chief Financial Officer, Ms Dawn Mbatha, said the IEC has had to absorb cuts of about R240 million in the current year. The estimated budget for 2023/24 is R2.2 billion. Importantly, National Treasury has provisionally approved the retention of any 2022/23 budget allocation surpluses to assist with funding pressures.

The IEC programme financial breakdown is: Administration programme accounts for R820 million which includes CoE. Electoral Operations is the core programme accounting for R1.2 billion. The Outreach programme is R258 million. The Party Funding and Liaison programme is R25 million. The recruitment of staff in the Political Parties Funding Unit has been slowed down for the IEC to get a more realistic sense of the volume and intensity of work in this unit.

Government Printing Works 2023/24 budget allocation
GPW CEO, Ms Alina Fosi, said that GPW will be focusing on change management. The Government Technical Advisory Centre (GTAC) has been deployed for this and will provide support for the implementation of the recommendations that came from the Ministerial Panel Review Report.

On the modernisation of GPW there is a renewed focus on ICT interventions in the wake of the fourth industrial revolution. A migration plan is being implemented to ensure stabilisation and sustainability of the ICT environment. It is essential there is business continuity of all operations and sustainability, given the challenges that GPW has been experiencing in ICT and its facilities.

GPW is on a conscious journey towards a clean audit which rests upon the following crucial pillars:
- Quality of oversight processes to realise the imperative of achieving a clean audit
- Strengthening and monitoring internal controls to ensure relevance and effectiveness
- Financial probity culture with efficient procurement processes that are compliant with legislation, have integrity, and are equitable and fair
- Overall governance: leadership and management responsibility and effective governance structures such as EXCO, MANCO, Audit and Risk Committee within the combined assurance framework.

To improve revenue collection, GPW has a master plan to house state-of-the-art equipment as the intention is to delve into SADC and countries on the African continent and offer a wide product range. Development Bank of Southern Africa has been appointed as implementing agent and the process is underway.

GPW CFO, Mr Ian van Der Merwe, said that as it stands GPW is looking at a profit of about R220 million in 2022/23. GPW is a self-sustaining entity. A large sum of the revenue comes from printing services, followed by advertisement sales.

GPW started with the implementation of the approved organisational structure on 1 April 2022. GPW is on a continuous journey of transformation with the challenge of it running on purely business principles governed by market forces yet operating within the public service milieu

GPW is currently expanding its footprint to provide functional and secure printing services as it aims to establish itself as the security printer of choice in South Africa, the SADC region, and the African continent by effectively assisting its customers with complex problems of potential identity fraud and ensuring document security.

 GPW has a positive outlook as the budget accommodates the ability to improve its financial outcomes. All the projects covered within the budget will be funded through Retained Earnings that GPW has accumulated. No added funding from the fiscus will be required to achieve the goals. GPW is also progressing to improve its audit outcomes and adhere to reporting dates in line with the Public Finance Management Act.

Discussion
Ms LL van der Merwe (IFP) asked the BMA:
- It worrying that DHA is decreasing its funding for the Immigration branch. As it is there are not enough immigration officers and inspectors. This is against the backdrop of the Minister of Police confirming that there is a large number of crimes committed by undocumented and/or illegal migrants. This is alongside the recent greylisting of South Africa which sees it placed on a global financial watch list due to its shortcomings in tackling illicit financial flows. South Africa has illegal activities happening at its borders. The BMA is set to sort out immigration issues in the future, yet currently DHA is decreasing the budget for immigration, leaving little resources to address the current crisis. The massive drop in the budget for Immigration is concerning. Does it mean it is giving up on the already existing challenges surrounding illegal immigrants?
- Why are mobile units in the counter-corruption unit listed under the self-financing budget?
- On BMA financing, the City Press has a worrying article stating that the BMA is being stopped from executing its duties by police officers who have entrenched interests at the border. Can it comment?
- Will drone technology be utilised to supplement the 400 BMA officers deployed on the ground?
- What measures will be used to offset the staff funding shortfall other than outsourcing corporate services to the Department of Home Affairs?

IEC
- Considering the 2024 national and provincial elections, alongside the additional tasks to be performed the IEC has a lot of tasks to complete. On the e-voting pilot that did not occur previously, will there be any funds allocated to an e-voting pilot project in 2024?
- Have there been any donations to the Multi-Party Democracy Fund, if so how much?
- How is the IEC planning to distribute these donations, considering the 2024 independent candidates?
- On financial investments for the communication campaign ­– while it is important to ensure the youth and as many people are registered to vote – does the IEC envisage a greater number of registered voters?
- What is the targeted number of voters it should be increasing from the current 26 million registered voters?

GPW
- What is the turnaround time to implement the Ministerial Review Panel Report recommendations?
- What has led to the significant overspending on Production and Stores?
- What is the progress in ensuring GPW is the printer of choice and all departments use GPW services?

Ms M Molekwa (ANC) asked the IEC:
- Given the IEC limited resources, will it be able to execute all the projects that have been presented?

Mr B Pillay (ANC) asked DHA:
- It is encouraging to see DHA rolling out more trucks. However, the R200 million that DHA has put aside is "unspent". Why is this money going to be returned – can it not be transferred to accommodate other units or projects that may need these funds?
- There is a shortage of DHA staff members so what is its plan for its unfunded vacancies?
- Has a budget been allocated for backup systems during load shedding?
- Has the correction of downtime and network challenges been budgeted for? This is concerning as Home Affairs offices experience a lot of network downtime?

BMA
- It appears the BMA budget allocation is insufficient and may hinder the desired outcome of ensuring BMA is fully functional and fully fledged?

GPW
- On plans for GPW to have an imprint in other countries, what sort of revenue has been received from those initiatives? What marketing plans are there to ensure the success of this African initiative? Is there a budget allocation for marketing?
- Previously GPW had challenges in ensuring audits are timeously conducted so what is being done to ensure this is improved?

IEC
- Given the Electoral Amendment Bill which means independent candidates will be included, extensive work will need to be done. The budget was expected to increase but instead the opposite has been presented to the Committee. This is concerning.
- The Committee has continually raised concerns about voter education to which the IEC would respond that not much could be done due to budgetary constraints. Can the Committee not ensure there is sufficient allocation since there is an upcoming election and extensive voter education is crucial as well as ensuring that South African citizens understand the Electoral Amendment Bill.

Ms A Khanyile (DA) asked DHA:
- What are the remaining goods and services to be procured for the Who Am I project of 2023?
- What is DHA's intention with interns serving on the digitisation project as it is set to be completed in a year?

IEC
- What is the reason for IEC sending 'Please Call Me' messages to voters?

Mr Adrian Roos (DA) asked DHA:
- For the R839 million digitisation project, what are the key project milestones to ensure the project is completed on time? And how will the process be accelerated given its late start?
- It is undeniable that South Africa has porous borders, the new officials – boots on the ground – that will be deployed by BMA seem to be positioned at the border posts and not along the borders to stop persons illegally coming into the country. It is a fact that the South African National Defence Force is also under pressure. What is the financial outlook for internal enforcement in the medium term as it is neglected?
- The Committee received a report on 12 July 2022 on the review of permits issued since 2014. The report indicates extremely serious problems such as widespread fraud and fake users created on DHA systems, identity theft and staff operating visa fraud syndicates. An information technology project is critical to address the gaps that permit fraud syndicates to operate in DHA - is there such a project?

BMA
- It is not a surprise that BMA is underfunded as the Committee needs to understand BMA is in a set-up phase. What is the funding shortfall for the full implementation of the BMA? What specific functions are not being implemented at the moment due to the funding shortfall? Who will implement these as legislation gives certain tasks to departments and the BMA?

IEC
- How long are the 7 000 additionally recruited staff for the elections to be employed by IEC as they seem to be budgeted for both in 2022/23 and 2023/24?
- To what extent are the elections expected to be expensive? How will these affect candidate and party fees?

GPW
- For years GPW has been talking about trips taken by executives for business development on the continent. What is the revenue outlook for all these exercises, even if it is a five-year forecast?
- Trade receivables are sitting at R211 million which is owed to the business after sales. If DHA is the major customer of Government Printing Works why does DHA not pay when receiving the service? This amount owed is about 17% of GPW total revenue.
- The Security Printers Bill has been talked about for a long time. GPW is admittedly doing consultations and yet for several years it has been proposed that GPW consults with the private sector on the impact of job losses, should the Security Printers Bill be effected as all government security printing will be done by GPW. When will the private sector impact assessment be done? Is this the best route to take given the current economic climate as this Bill will take business away from the private sector in different parts of the country?

Ms M Modise-Mpya (ANC) asked DHA:
- What interventions are in place to improve the underspending; it is unacceptable that there are unspent funds yet a budget was in place.
- The CoE budget is presented yet Home Affairs offices are understaffed and this affects service delivery. What is DHA doing about this?

DHA response
DHA Director General, Mr Tommy Makhode, replied that the decrease in the DHA Immigration branch budget is due to the functional shift of Immigration to the BMA. All immigration officials at the ports of entry will move to BMA with their salaries. Therefore for the 2024/25 financial year, these remuneration budgets will move to BMA, because of the functional shift.

In the DHA Immigration branch budget, there are funds of about R450 million for goods/services and these will assist the Home Affairs team with deportation.

The Committee had suggested Home Affairs work on a business case due to understaffing as the DHA staffing level was sitting at about 36%. National Treasury had approved funds of R260 million which enabled DHA to fill about 762 vacant positions with a focus on services which placed it at a 42% staffing level. The Department is further looking at increasing the capacity to at least 55%. Whilst this is far below acceptable measures, DHA is looking at improving the staffing levels.

The budget will not be impacted by mobile trucks as the mobile footprint is being increased. This afternoon DHA is anticipating the receipt of 20 more trucks. Moreover, on the recommendation of the Committee, DHA is going to order 100 more trucks to be deployed and service the more rural areas.

On the digitisation programme, it is set to continue for the next two years due to the late receipt of funds, therefore the interns will still be in the digitisation project.

Mr Thulani Mavuso, DHA Deputy Director General: Institutional Planning and Support, replied that the digitisation programme is under consideration, with expected full running in March and April. More graduates are expected to be employed on this. The key milestones of the project will be indicated quarterly. The minimum set of records should be demonstrable at the end of March 2023

DHA CFO Mr Hollamby replied that the Passenger Name Recognition (PNR) is allocated at about R228 million, the system is a sub-component of the Advanced Processing System. This system allows DHA to tell you when a person books a ticket to South Africa which establishment they will be staying at, track the banking system of the traveller, and how the traveller intends to leave South Africa. Unfortunately, this system is provided by a sole supplier – a Swiss-based company – and National Treasury declined the application to engage and appoint this service provider for the PNR.

The Department was advised to go on an open tender, and the process has been started. As a result, DHA will be unable to spend the R228 million in this current financial year, National Treasury has been requested to un-earmark the funds.

On the anticipated unspent money for the digitisation project, due to late receipt of the funding allocation, DHA has engaged National Treasury for a rollover, of which Treasury has been supportive.

Border Management Authority response
BMA Commissioner, Dr Mike Masiapato, clarified that the BMA operates in two distinct areas: (i) the port of entry, which is inside the port, and (ii) the law enforcement area, which is outside the port. Outside the port is legally defined as 10 kilometres outside the port, going sideways at the borderline, and 10 kilometres inside South Africa. The other specialised area which is part of law enforcement is the vulnerable segment on the borderline. This refers to areas where there are border communities, these are areas where the borderline competes with civilian activities in that area. These areas have at times what is called the foot and mouth fence, which deals with animal movement. The BMA will be taking over this work from DHA of Agriculture.

Understanding the above, issues about the South African Police Services (SAPS) the BMA Act indicates that issues of border law enforcement work in the space, the work will be done by BMA officials. The intention was to ensure there is no confusion about duties. Whilst this work is currently being done by the SAPS when the BMA Act comes into effect it will be done by the Border Management Authority.

The initial intention of BMA was to ensure officers deployed at the port environment by SAPS are controlled by BMA and those officials are integrated into the BMA. It quickly became clear this would not succeed as the funds allocated for border control will have to be transferred to the BMA, Treasury did not allow this. This meant BMA will not have the capacity to do all the work. Although the BMA will be doing some aspect of the work based on the current 200 border guards and 400 that will be brought on in the coming financial year.

As it stands the SAPS is utilising 6,000 officials across all ports in the country. Compared to the 600 officials that the BMA will have, this meant the BMA cannot fully take on the function. The SAPS will continue this work and BMA will gradually take responsibility when their border guards increase. There are still ongoing discussions with the relevant Ministers regarding the matter.

The BMA is looking at utilising drone technologies to complement the boots on the ground, unfortunately, with the allocation of R250 million BMA will not be able to deploy this at this stage. In the interim, the BMA will try and tap into the drone technologies that the South African National Defence Force had indicated they intend to use for border management during the 2023 Budget Speech, with the hopes that the BMA will be granted additional resources.

Presently the BMA will cover all the main ports, which include land ports, sea, and airports. In terms of the line, only landline ports will be covered, and no sea port line covering. BMA has not put effort into the sea line ports, let alone budgetary consideration. The bringing in of the coastline guards will be the second phase of the BMA plans. In summary, the shortfall is R10bn over a five-year period. For the current year BMA asked for R2.6bn but got R250m.

Government Printing Works response
GPW CEO, Ms Alina Fosi, replied that to date GPW has started printing for all spheres of government. In identifying revenue-generating clients, progress has been made.

A multi-faceted approach has been adopted for the revenue quantum for the expansion plan. Since the advent of Covid-19, there have been numerous online engagements with SADC countries and the greater African continent to ensure the marketing of GPW products. This has yielded some results, as these countries have come on official visits to view GPW services, with the intention of returning for business. Central to this strategy have been efforts to engage embassies and high commissions in Pretoria to ensure there is wider engagement, without having to spend much on travelling costs.

On the data loss, several companies have been engaged for data recovery and no costs have been incurred. To date, there are no costs budgeted for data recovery, as systems are being recreated and there are efforts to re-automate the previously crashed system.

On an economic impact assessment for potential business losses by the private sector, it is important to note that GPW is part of Printing SA. Printing SA is a coordinating body for all printing, publication and its manufacturing sector within the country, therefore the GPW model has never competed with the private sector; it supports small, micro, and macro enterprises. SMMEs have been granted business by being contracted to print certain products on behalf of GPW, to ensure their development and sustainability.

Ministry response
Home Affairs Deputy Minister, Njabulo Nzuza, stated that the DHA human resources issue will be reported on and emailed to the Committee.

Indeed on 23 February 2023, an incident took place in Elim, Limpopo where DHA staff and members of the community were held hostage. The matter was about a male person who had applied for a Late Birth Registration and while was being processed, the father on whom a paternity test was meant to be done passed away. The Department discovered that the person who had applied for the late birth registration was in possession of a green bar-coded identity book under a different name. This brought suspicion to the issue meaning there are pending investigations. Fortunately, no one was physically harmed in the hostage incident. Late Registration Birth applications is an area often abused for fraud and corruption.

Self-financing refers to the funds DHA collects in services rendered such as identity documents and passports. The funds are collected and used in the main for the function of its footprint and so forth.

The delay in the digitisation project is a result of DHA receiving funding late from National Treasury. This meant recruitment had to be delayed as there were no funds. The Department is doing its best to catch up and the project will eventually be concluded timeously.

Overall DHA has managed prudent financial systems in the past and there has been consistent performance. The aim now is to improve and receive a clean audit. Efforts to lobby for funding for the BMA will continue as this has been continually committed to by the Portfolio Committee that funding for the security cluster needs to be improved.

IEC response
IEC Deputy Chief Electoral Officer for Outreach, Mr Mawethu Mosery, replied that voter education plans have a combination of integrated activities, the target is the young electorate of the country – particularly first-time voters. Given the new electoral system, every electoral member becomes a target for voter education and the communication campaign. One of these integrated activities is the community approach – the capacity is being put on the pool of staff members that will be at municipal duty stations. The hope is that communities are reached broadly within communities, this will be at a voting district level.
The second focal activity deals with vulnerable groups, particularly persons living with disabilities, where there will be similar community engagements with these groups for voter education and information.

Radio-based engagements for voter information and engagement will continue, using community-based radio stations as the medium has still been found to be relevant and effective. Digital media is a new medium and the IEC will be making use of these. The key areas include information sharing through animation, chatbots, and conferencing facilities to create dialogue for participants to engage with the IEC content. The partnership with the South African Broadcasting Corporation does include radio and television where educational material will be shared, extending to all SABC channels.

The IEC also has a focused school curriculum where civic education and duty are encouraged, coupled with the annual campaign in April which is voter education month. The context of voter education in South Africa is still about why people should participate and vote. This is a question that needs to be answered in dialogue and interactions. The electorate needs to have a purpose in participating and to understand their responsibility in participating in the electoral democracy.

Ms Dawn Mbatha, IEC CFO, confirmed that the IEC can execute all four programmes depending on National Treasury approval of the anticipated rollover. The Electoral Amendment Bill was also factored into the budget allocation process.

The electoral process is becoming an expensive exercise as there is the amendments in the Electoral Amendment Bill to consider; enhancements to technology; and efforts in automating the election process. Moreover, the IEC procures in the open market and prices are affected by external factors such as inflation.

Mr Mosotho Moepya, IEC Chairperson, replied that donations to the Multi-Party Democracy Fund is indeed a strategic innovation in the party funding regulatory environment, as it allows for corporates and the citizenry to contribute to entrenching multi-party democracy. Contributions to date have been to the value of R7.5 million. Quite admirably two citizens have made contributions. The need is there and the IEC is engaging all corporates and citizens who can contribute. A process of engaging with high net worth individuals is underway to enthuse them about contributing to the fund. This is distributed in a defined formula contained in the electoral prescripts in both an equity and proportional manner.

The IEC is intending to open the total fleet of 23 000 voting stations for two registration weekends – one in late 2023 and another in early 2024. This is an important modality as voting stations are the most accessible for people. It is a modality that is not dependent on a cell phone as you merely walk to a voting station to register. It serves as an equalising opportunity for all South African citizens. To supplement this, the IEC has an online 24/7 accessible voter registration platform. This is an attractive feature, particularly for young voters, who are the key target. Civic education programme was launched last year for students in all tertiary institutions which is also important as it is an opportunity to register.

CEO Mamabolo noted that the IEC does not offer a 'Please Call Me' facility but it does communicate with voters through SMS in certain circumstances after by-elections when it analyses registration patterns. The 7 000 staff expansion programme for the 2024 elections spans 13 months across the 2023/24 and 2024/25 financial years.
 

In closing, the Committee Chairperson thanked all the stakeholders and noted the concerns about the shortcomings in budget allocation. The Committee acknowledges that the Electoral Amendment Bill brings major shifts in governance and operations of the Electoral Commission, particularly in the move towards the 2024 elections. The shortcomings in financial support have been noted.

Overall all issues have been noted and the work of the entities is applauded. On behalf of the Committee, the work done by DHA will be closely monitored. A strategy session will be held with all three entities present for this to reflect on the issues brought up in this session. The Committee is anticipating conducting a study on electoral voting and how other states are running the electronic voting process. This will be followed by a workshop with the IEC to broadly deal with the matters.

Meeting adjourned.