REPORT OF THE PORTFOLIO COMMITTEE ON JUSTICE AND CONSTITUTIONAL DEVELOPMENT ON THE CONSTITUTIONAL MATTERS AMENDMENT BILL [B 22—2005]

1. Report of the Portfolio Committee on Justice and Constitutional Development on the Constitutional Matters Amendment Bill [B 22 - 2005] (National Assembly - sec 75), dated 19 August 2005:

The Portfolio Committee on Justice and Constitutional Development, having considered the subject of the Constitutional Matters Amendment Bill [B 22 - 2005] (National Assembly - sec 75), referred to it and classified by the Joint Tagging Mechanism as a section 75 Bill, endorses the classification of the Bill and reports the Bill with amendments [B 22A - 2005].

The Committee wishes to report further, as follows:

1. During its deliberations on the Bill, the Committee noted that the Public Funding of Represented Political Parties Act, 1997 (Act 103 of 1997) (the Funding Act), already provides for two scenarios where a political party has to repay to the Electoral Commission the unspent balances of all moneys that have been allocated to it in terms of section 5 of the Funding Act, namely—

(a) where a political party ceases to qualify for the allocation of moneys from the Represented Political Parties’ Fund (the Fund) (existing section 5(4)); and

(b) if Parliament and every provincial legislature are dissolved in terms of the Constitution or if Parliament or any provincial legislature is so dissolved in any other circumstances (existing section 9(3) and (4)).

2. The provisions of the new section 6A that are to be inserted in the Funding Act create a third scenario where a political party has to repay to the Electoral Commission the unspent balances of all moneys that have been allocated to it in terms of section 5 of the Funding Act, namely where a political party, after a window for "floor crossing", ceases to qualify for the allocation of moneys from the Fund in terms of section 5 of the Funding Act. The Committee, during its deliberations on the Bill, deemed it appropriate to regulate the repayment of unspent balances of moneys in terms of the new section 6A in more detail than the repayment of unspent balances of moneys is presently regulated in the existing sections 5(4) and 9(3) and (4) of the Funding Act.

3. The new section 6A(8) empowers the Electoral Commission to appoint a public accountant and auditor registered and practising as such in terms of the Public Accountants' and Auditors' Act, 1991 (Act No. 80 of 1991), to, amongst others, audit the books and records of account kept in terms of section 6 of the Funding Act by a political party that—

(a) ceases to qualify for the allocation of moneys from the Fund in terms of section 5 of the Funding Act after a window for "floor crossing"; and

(b) consequently, has to repay to the Electoral Commission the unspent balances of the moneys allocated to it.

The question has been raised whether this power should not be extended to instances─

(i) where the accounting officer of a political party, after the end of a financial year, fails to have the books and records of account of the party audited by a public accountant and auditor and, subsequently, to submit an auditor’s report and audited statement to the Electoral Commission as required by section 6 of the Funding Act; or

(ii) where the Electoral Commission is dissatisfied with an auditor’s report and audited statement so submitted.

4. The Committee also deemed it desirable to insert a new section 9A in the Funding Act providing for certain offences that could be committed by the accounting officer or leader of a political party that has to repay, in terms of the new section 6A, the unspent balances of all moneys that have been allocated to it in terms of section 5 of the Funding Act. Those offences could, however, not be made applicable to the accounting officers of political parties that have to repay their unspent balances of moneys in terms of sections 5(4) and 9(3)(b) and (4)(b)(ii) of the Funding Act, as no provision is made in those sections as to who will be responsible for repaying the unspent balances to the Commission.

5. Due to the urgency of having the Bill passed by Parliament and implemented before the next window for "floor crossing" that starts on 1 September 2005, the Committee was not in a position to—

(a) investigate the desirability of—

(i) bringing the provisions of the existing sections 5(4) and 9(3) and (4) of the Funding Act into line with the new section 6A and to consider the consequences, if any, of such alignment;

(ii) empowering the Electoral Commission to appoint a public accountant and auditor in instances where the accounting officer of a political party, after the end of a financial year, fails to have the books and records of account of the party audited by a public accountant and auditor as required by section 6 of the Funding Act or where the Electoral Commission is dissatisfied with an auditor’s report and audited statement so submitted to it in terms of that section;

(iii) making the offences created in the new section 9A applicable to the accounting officers of political parties that have to repay their unspent balances of moneys in terms of sections 5(4) and 9(3)(b) and (4)(b)(ii) of the Funding Act; and

(iv) contemplating appropriate sanctions for political parties which or accounting officers of political parties who contravene or fail to comply with the provisions of section 6 of the Funding Act; and

(b) obtain the formal views of the Electoral Commission on the above matters.

6. In the light of the above, the Committee recommends that the Minister for Justice and Constitutional Development be requested to direct her Department to investigate the matters referred to in paragraph 5 above with a view of submitting amending legislation, if necessary, to Parliament at the earliest opportunity.

Report approved.