Party funding regulator trips up over costs

'The IEC is expected to set up a division that will receive funding declarations from parties, audit the payments and publish the list for the public' (Delwyn Verasamy)

'The IEC is expected to set up a division that will receive funding declarations from parties, audit the payments and publish the list for the public' (Delwyn Verasamy)

The Independent Electoral Commission (IEC) may not be ready to implement new political party funding laws until after next year’s general elections because of inadequate funding and staff capacity.

The Bill requiring parties to declare the identity of donors for amounts more than R15-million was passed in the National Assembly last week and now has to be approved by the National Council of Provinces and signed by President Cyril Ramaphosa before it comes into effect.

The IEC is expected to set up a division that will receive funding declarations from parties, audit the payments and publish the list for the public. But it does not have the money to start the division as well as set up the two funds that would distribute the money to parties.

Last week treasury told Parliament it could make available only the R20-million needed to set up the IEC party funding unit from April next year, because it had not been budgeted for. This would leave the elections agency with “just a few months” to hire staff, conduct training and audit party submissions.

“It just means we probably won’t know who’s funding our political parties before going to the elections next year.
And that’s mainly because of financial constraints,” a senior IEC official, who is not authorised to speak to the media, told the Mail & Guardian this week. “That’s a really tight deadline for the IEC.”

The R20-million will be used to set up the Multi-Party Democracy Fund (MPDF) and to hire a team to oversee the declaration of donors and distribution of the money, and the existing Represented Political Party Fund (RPPF) would continue operating with treasury allocations.

In its initial presentation to Parliament the IEC estimated that it needs R45-million to set up the unit, and would spend up to R10-million on auditors for the new regulators.

But, by the treasury’s estimates, the IEC required R5.5-million to compensate three staff members and a chief executive, R14.3-million to operate the new division and audit the political party submissions and additional capital of R215 000.

“The funds should be incubated in the IEC following a shared services model. The costing [should] be financed following the phased-in approach,” said the treasury’s chief director, Gillian Wilson, in response to the IEC’s request for R45-million.

The RPPF, which already distributes money to parties in the National Assembly and provincial legislatures, will be financed with R1.149-billion this year, according to Wilson.

This week the IEC confirmed that it has not yet held meetings with companies to raise money, and feared that there is no incentive for donations. Exacerbating the problem is the fact that the MPDF does not yet exist and has no funding.

IEC chief executive Sy Mamabolo said: “The Bill provides for [declaration of funders] but whether [this] will be implemented before 2019 elections depends on the progress made with the establishment of the new party funding unit.”

Its unit’s staff cost estimate was R11-million, with the chief executive receiving a package of R1.8-million a year and the lowest level staff receiving R427 793. The IEC also budgeted R10-million for audits, whereas the treasury budgeted only R1-million.

The Democratic Alliance’s James Selfe, a member of the ad hoc committee that formulated the Bill, said he was doubtful that the IEC would be ready in time, because the commission told Parliament it would take two years to implement the system fully.

“I would doubt that they could have a reporting system in place before the next election,” he said. “It would take us some time to devise systems so as to ensure that every single donation was recorded and reported.”

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