Legal View

RTMC found guilty

Read time 5min 00sec

A report on the investigation into allegations of mismanagement at the Road Traffic Management Corporation (RTMC) was presented to the minister of transport yesterday, almost five months after its due date.

Transport minister Sibusiso Ndebele appointed an independent task team on 8 February to investigate several complaints about the company and the damning findings of an independent audit.

The report, which was expected in March, displayed key findings of the investigation to be irregular expenditure, inappropriate procurement procedures and unauthorised use of eNatis transaction fees, says the Department of Transport (DOT).

“Minister Ndebele will study the report as well as the recommendations, which will be presented at the next RTMC Shareholder's Committee meeting scheduled for next month (August 2010).”

Taking action

DOT spokesperson Logan Maistry says Ndebele will only make a decision on the matter when he has studied the report and its recommendations.

“I'm very pleased that the task team has finally come back with the report,” says Democratic Alliance (DA) shadow minister of transport Stuart Farrow.

However, he says the minister needs to call a meeting with the stakeholders, who are the MECs of transport from all nine provinces. “The stakeholder meeting must be brought forward. We can't sit around and wait for another couple of months while the report sits on his desk.”

Farrow adds that the report needs to be brought into the public domain in terms of the Access to Information Act. “We need to see that report.”

He also feels the board of directors of the RTMC should be held accountable for all management processes and must answer questions about what they did to stop the expenditure or to alert the minister and other relevant authorities about the mismanagement.

“The CEO should be held accountable for all the public funds lost.”

Ndebele says the DOT has adopted a zero tolerance stance when it comes to fraud, corruption and mismanagement. He adds that any person found guilty of such acts must face the consequences of their actions.

“The RTMC was established for co-operative and co-ordinated strategic planning in respect of road traffic matters by the national, provincial and local spheres of government. It is therefore of paramount importance that this agency functions effectively and efficiently to fulfil its mandate," says Ndebele.

He had suspended CEO Ranthoko Rakgoale when the task team was appointed in February, and Collins Letsoalo, deputy DG of Financial Services at the DOT, was appointed acting CEO.

Questionable expenditure

Complaints first rose after a damning independent financial audit detailed procurement irregularities and gross financial mismanagement at the RTMC.

Farrow says the audit cost R13.3 million and had been completed in September 2009.

The DA said the report revealed several irregularities implicating Rakgoale. The RTMC's R4.5 million spend on provincial workshops was questioned when only R1.5 million had been budgeted for the purpose.

The company also entered into a 10-year, R658 million lease for nine office blocks, only two of which are being used for a staff component of 144.

The audit also revealed that over R1.3 million of RTMC funds was wasted for the hire of private suites at Ellis Park and Loftus Versfeld during the Confederations Cup. The CEO's purchase of an Audi A4 for personal use, using RTMC funds, was also questioned.

Official probe

The political party also wrote to the office of the Public Protector, requesting a formal investigation into the conduct of the CEO and other senior officials of the RTMC.

Farrow says the results of the audit on the company reveal it has mismanaged funds meant for major systems and implicates several officials, including the CEO, “in serious instances of misappropriation, procurement irregularities and gross financial mismanagement”.

“Together with the admonition from the Department of Transport and the findings in the audit report, this once again provides clear and undisputable grounds that the CEO and other senior officials of the RTMC mismanaged eNatis transaction fees - money intended for the improvement of SA's licence testing systems and for the introduction of the Aarto [Adjudication of Road Traffic Offences Act] system,” says Farrow.

Money squandered

Apart from appointing a task team, Ndebele also instructed the RTMC to pay over all monies collected as eNatis transaction fees.

He also stopped the salaries of several top officials, as concerns were raised that the money meant to be used for the new point demerit system was not being allocated correctly.

Transaction fees received from all annual motor vehicle licensing transactions are supposed to be used to finance the maintenance and updating of road traffic records and information, according to the RTMC Act and National Treasury regulations.

The company was supposed to use the funds to enhance current traffic information registers and to introduce new registers such as the Aarto register, computerised learners licence register, and to create and maintain a national register, which combines provincial registers for accidents and contraventions.

Aarto delayed

The RTMC is tasked with the rollout and facilitation of Aarto.

When the Aarto demerit point system is implemented, the demerits will reflect against the driving licences of infringing motorists on the National Contravention Register, on eNatis.

The RTMC announced it would spend over R300 million on IT and marketing for the new demerit system for motorists.

The system was supposed to be implemented later this year, but the deadline for national rollout has now been postponed to April 2011.

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