as PAC questions diversion of unspent election funds to buy headquarters
Moroke Sekoboto
MINISTER of Law and Justice Richard Ramoeletsi has been implicated in the irregular purchase of the Independent Electoral Commission (IEC)’s headquarters for M80 million, with the Public Accounts Committee (PAC) questioning his role in authorising the acquisition using unspent election funds.
The purchase of the Maseru West property from Homestead Holdings was not budgeted for in the 2023/24 financial year, yet the IEC used money initially allocated for the 2023 Local Government Elections to finance the acquisition.
The Auditor General, Mathabo Makenete, flagged the M80 million expenditure during her audit of the IEC’s 2023/24 financial statements, raising concerns over the commission’s failure to remit unspent budget allocations to the government’s Consolidated Fund at the end of the financial year.
Appearing before the PAC yesterday, IEC executives struggled to explain why the commission had diverted the money to purchase a property instead of returning it to the Consolidated Fund by 31 March 2024.
IEC Director of Legal Services, Advocate Lehloholo Suping, told the Committee that the money had come from savings made during the 2023 local government elections, which the commission had invested with Stanlib.
“After the 2023 Local Government elections, we were left with this money as some election activities didn’t happen. In some cases we will plan to spend five days on a certain activity but end up only three days. We usually procure uniforms for our temporary staff, but suppliers failed to deliver so we didn’t pay them. We saved all that money and invested it,” Adv Suping said.
However, the explanation failed to convince the Committee, which reminded the IEC that unspent allocations were supposed to be returned to the Consolidated Fund at the close of every financial year.
The PAC also questioned why the money had been channelled through a Stanlib money market investment shortly before the financial year ended, without the knowledge of the Accountant General, before being withdrawn for the property purchase.
Adv Suping admitted that the commission had acted wrongly.
IEC Finance Manager, Mokheseng Mofolo, told the Committee that the acquisition had been approved by former Director of Elections Mpaiphele Maqutu.
Mr Mofolo said the finance office had received a memorandum titled “Acquisition of Commercial Property Purchase of Maseru West IEC Head Office”, accompanied by a routing slip approved by Adv Maqutu.
He said the purchase was supported by three documents: the memorandum, the routing slip and a payment voucher signed by the then Finance Manager, Mabatho Sesoane.
“There are three things that we used to approve the purchase: memo, routing slip and payment voucher. The memo was titled ‘Acquisition of commercial property purchase of Maseru West IEC head office’, supported by routing slip approved by Adv Maqutu, and a payment voucher signed by then Finance Manager Mabatho Sesoane,” Mr Mofolo said.
He further told the PAC that the IEC had received a letter from Mr Ramoeletsi on 2 April 2024, referring to correspondence from Finance and Development Planning Minister Dr Retšelisitsoe Matlanyane.
“On 02 April 2024 a letter from the Minister of Law and Justice quoting the Minister of Finance Dr Matlanyane dated 27 March 2024 and directed to Adv Maqutu serving him to authorize and execute all due process to effect due acquisition of the property,” Mr Mofolo said.
The correspondence became a central issue during the hearing as Committee members sought to establish who had authorised the commission to use funds that had not been allocated for the purchase.
PAC member, Maboiketlo Maliehe, challenged the IEC to identify the person who had instructed it to spend the money, arguing that the commission had no authority to retain and redirect unspent government allocations.
Ms Maliehe said the funds should have been returned to the Consolidated Fund by 31 March 2024 because they had not been used for their intended purpose during the elections.
Chairing the PAC session, Dr Tšeliso Moroke said the IEC could not justify the expenditure simply because it had received instructions from Mr Ramoeletsi.
He added that even Dr Matlanyane would have been wrong to authorise the use of the money without the necessary budgetary approval from Parliament.
“Dr Matlanyane had to go back to Parliament and ask for your budget not to use the unspent money that we have not allocated,” Dr Moroke said.
The Committee also questioned how the IEC intended to classify the expenditure to address the Auditor General’s findings. Mr Mofolo struggled to provide a satisfactory explanation, insisting on referring to the funds as “unspent”, a description Dr Moroke rejected in the circumstances of their subsequent use.
The PAC further scrutinised the procurement process, with IEC Procurement Manager, Elias Molise, failing to convince members that the acquisition had complied with the requirements governing public procurement.
The Committee questioned why the M80 million purchase had not been publicly advertised, given that procurement contracts exceeding M50 million were required to go through an open tender process.
Mr Molise said the Office of the Director of Elections had approached the procurement office after expressing interest in acquiring a building for the commission.
He said Adv Maqutu had advised the procurement office to consult the Land Administration Authority (LAA), which was believed to have information about property valuers.
“The Office of the Director of Elections called the procurement office expressing interest to procure a building. Adv Maqutu told us that he had gathered information that LAA has knowledge of valuers who can help us. He recommended our office to go to LAA and ask for their help. LAA recommended five valuators companies,” Mr Molise said.
He said the procurement Committee had subsequently approved a request to use a limited competitive procurement method.
“We consulted the procurement Committee and requested a limited competitive method of procurement and the procurement Committee approved the request and we sent the tender notice to the companies. We went to the site visits with three companies but two responded and we awarded them the contracts for them to give us evaluation reports,” Mr Molise said.
However, PAC member, Montoeli Masoetsa, warned Mr Molise that the commission could not bypass public advertising requirements for a procurement of that value.
The Committee also questioned the valuations obtained for the property and why the final purchase price was higher than both assessments.
Mr Molise said one valuation company had assessed the building at M75 million, while the other put its value at M74.8 million.
The figures raised further questions among Committee members, who sought to understand how the IEC arrived at a purchase price of M80 million despite the two valuations being considerably lower.