The challenges at the Road Traffic Management Corporation (RTMC) have been tormenting since its inception. The RTMC has had, in a period of seven years, four different Chief Executive Officers (CEOs). It therefore follows that the stability of the entity has always been suspect. When I started as Minister of Transport in May 2009, I was inundated with various complaints about the then management and allegations of mismanagement at the RTMC. The then board assured me that everything was in good order.
It was in February 2010 when I was sent more information, which was also sent to the portfolio committee on transport, that I then took a decision to appoint a task team, led by Ms Riah Phiyega, to look at the affairs of the RTMC and also appointed an Acting CEO. The then CEO was placed on special leave until his suspension in April of the same year, after I had received a preliminary report from the task team confirming some irregularities.
Subsequently, the boards' term was also not renewed due to the preliminary findings that had pointed to a dysfunctional board, which had failed to provide the necessary oversight to the entity.
The task team then finalised their report and released a report in August 2010, which also included a limited forensic report that was commissioned by the task team into various contracts that were considered irregular by the task team. The task team unearthed several irregularities and mismanagement issues.
Those ranged from lack of skilled personnel, inadequate or absence of controls, abuse of supply chain procedures and more. In short, the forensic by Gobodo confirmed most of the allegations that were levelled against the then management of the RTMC. Four executives were then subsequently suspended and charged for various transgressions of the Public Finance Manament Act (PFMA), treasury regulations and dereliction of duties.
The forensic report has been handed over to the SAPS for further investigation and possible criminal charges to be laid against various individuals and companies that are implicated by the forensic report. Furthermore, a civil case is being pursued to try and recover taxpayer monies which were found to have been wasted.
We will also be engaging South African Institute of Chartered Accountants (SAICA) to assist on the evaluation of the appointment of Deloitte who were hired irregularly to do what was then called a 'financial clean up' project, which resulted in irregular expenditure to the tune of R11 million. There is something amiss when a firm of Deloitte's status is hired in the way it was hired to do the kind of work that results in the tax payer being 'dubbed' and we therefore believe that this has to be investigated by the relevant body.
As per the provisions of the Labour relations act, internal processes ensued which included the employees taking the RTMC to the labour court. All these led to unforeseen delays which created a challenge with the finalization of disciplinary procedures as it was envisaged.
Last year in this forum we presented a detailed report which illustrated to us what had been serious lapses of the control environment and the abuse of procurement procedures. This had led to R360 million irregular expenditure, which included R200 million irregular use of e-Natis transaction fees, which were supposed to be paid over to the Department. However, due to the timing of the Task team report some of the irregular expenditure was only discovered after the year ending 31 March 2010. The irregular expenditure is included in the figures for the year under review but relates to the previous year.
The turnaround of the RTMC has been a daunting task that together as the Shareholders committee and the portfolio committee we have been monitoring and evaluating from time to time. We have seen improvements in various areas amongst others the control environment, the supply chain environment and the realignment of the RTMC to its core business as defined in its founding legislation.
We have seen the reduction of the irregular expenditure to zero from the reported R360 million in the previous year, and we have also seen stability and improvements in delivery. We can't claim that all is where we would have liked to be, but there's remarkable improvement and that gives us confidence that our interventions were not in vain. It has been two and a half years of hard work to turn this entity around.
Yesterday (5 March), as the shareholders committee, we agreed to finalise the appointment of the board and a full time CEO. We are hopeful that going forward we will see a RTMC that will deliver to the expectations of South Africans, Safe roads in South Africa, and ensure a Populace that is not only safe but also feels safe.
It is in this context that I would like this committee to receive the Annual Financial Statements of the RTMC. I call on the colleagues to be critical of us but with a view to building this important entity going forward taking into consideration the historical context. We will endeavour as the shareholders committee to do our very best to have a better RTMC into the future.
Enquiries:
Collins Letsoalo:
Acting CEO – RTMC
Cell: 082 673 3009
Transport Minister Sibusiso Ndebele on the Road Traffic Management Corporation (RTMC), at the Scopa Meeting, Parliament
