'Horrific' RTMC mismanagement revealed

2010-11-16 16:55

Cape Town - A report detailing "horrific" mismanagement of hundreds of millions of rands of taxpayers money by the Road Traffic Management Corporation (RTMC) was tabled in parliament on Tuesday.

Riah Phiyega, chairperson of the ministerial task team appointed to investigate irregularities at the RTMC, told the portfolio committee on transport that the institution had used R300m worth of electronic National Traffic Information System (eNatis) transaction fees to cover its expenses.

"The Treasury requires that the RTMC collects what they have to collect for eNatis and transfers it to the department of transport," Phiyega told the committee, which was attended by Transport Minister Sibusiso Ndebele and his deputy Jeremy Cronin.

"The department is then able to service its commitments. Whatever is remaining goes back to the Treasury. The RTMC did not transfer the funds.

"They took the money and services to cover expenditure existing in the organisation. This shows the recklessness, abuse and non-compliance in terms of what happened there."

The task team's investigation included an irregular R658m lease over a 10-year period.

The lease was cancelled when Ndebele found out about it and ended up costing R11m.

"That has been a saving grace for the department," Phiyega said.

Ndebele appointed the four-member task team in February, following reports of mismanagement at RTMC.

More than 40 people were interviewed during the investigation.

Ndebele suspended CEO Ranthoko Rakgoale when the task team was appointed. Collins Letsoalo, deputy director general of financial services at the department of transport, was appointed acting CEO.

The board of the RTMC was dissolved in April. A new one is yet to be appointed.

Other irregular expenditure included the purchase of IT infrastructure for R11m.

The wasteful expenditure included the irregular purchase of the accident reporting system - still not in use - costing R85m over two years.

"The system purchased is still not being used. We see that as fruitless expenditure of very valuable resources."

An IT help desk was installed for R9m at the corporation, which employs a mere 140 people.

"That type of investment you would normally see in a big organisation.

"This organisation employs 140 people. You don't need such a huge set-up. You need one or two people. To invest R9m shows you the weakness of judgement in the organisation."

The organisation also purchased an Enterprise Resource Planning system that managed human resources and salaries "to the tune of" R34m.

"This would be spent by the type of organisation the size of Standard Bank that employs around 30 000 people.

"This system could comfortably handle a workforce of 50 000 people.

"Worst is that the system was never put to use. I don't believe it will be ever used. Using it requires a lot of money to be spent on licences and so on."

The RTMC - which had its own finance department with a head and was responsible for producing an annual report - paid R13.3m to auditing firm Deloitte to prepare its end-of-year report for the auditor general.

It had a full complement of staff in its finance department, including a head who was an executive in the department.

"Not only was there non-compliance, but they also did not follow tender processes in awarding the contract to Deloitte."

Phiyega said the investigation found an abuse of human resources procedures at the firm.

Files found hidden in car boots

"If staff were too loud-mouthed or tried to challenge things, there were nicely crafted processes to get you suspended or charged."

The task team also discovered that files were being stolen during their investigation.

"Some people were caught removing the files at the institutions. Some of the files were found in their (car) boots.

"Some people were suspended and fired for interacting with (the) investigation we had."

Democratic Alliance MP Stuart Farrow said his biggest concern was how the minister would "take the process forward.

"It is horrific. It confirms the concerns we have had for a long time about what has been happening there," he said.

"My biggest concern is how the minister is going to manage this going forward.

"It's public money that has been wasted here. I believe we should bring the Hawks into the process to take the matter up."

Ndebele said several staff at the RTMC had been suspended, based on the recommendations of the report.

"The disciplinary inquiry is in the process of being finalised," he said.

"Further, the forensic audit process is still under way, the results of which will be actioned by the acting CEO of the RTMC.

"The Public Finance Management Act (Act 1 of 1999) makes it abundantly clear that the accounting authority for a public entity commits an act of financial misconduct if that accounting authority wilfully or negligently makes or permits an irregular expenditure or a fruitless and wasteful expenditure.

"Those found guilty of such offences are liable on conviction to a fine, dismissal or imprisonment."

  • scud - 2010-11-16 17:00

    What will it take for Zuma and his band of economic destroyers to understand that cadre deployment is corrupt,wasteful and disastrous?

  • Que - 2010-11-16 17:18

    Ho Hum........What's new? This is the order of the day in government departments. Give it a few weeks and all will be forgotten. Those suspended will sit at home for a year or so on full pay and will then be redeployed to plunder elsewhere.

  • Nic - 2010-11-16 17:19

    Another government institution, another case of horrific mismanagement costing millions. This picture is all too familiar. The internal controls and the staff who are supposed to adhere to it in these organisations are pathetic. It is called the Fat Cat syndrome. Disgusting.

  • Andrew - 2010-11-16 17:21

    How terribly surprising.

  • Shorts - 2010-11-16 17:23

    Typical !!! What do you really expect from the Presently Dysfunctional Incumbents appointed at all levels to organisations such as this as part of the ANC's cadre deployment ( at all costs ) policy?? There are many others out there run ( into the ground ) just as much as this one that we haven't as yet heard about.

  • Keifiechief - 2010-11-16 17:27

    You know this is so widespread through government that simply catching and punishing these ppl is not enough. Who appointed these ppl, if they cannot be equally charged for mis-conduct or failure to perform at one's duties (appointing ppl to these posts being one of their duties) they must at-least be named-and-shamed!

  • Mell - 2010-11-16 18:02

    Come on ANC... lets see a public display of corrupt people going to jail for a VERY long time and all their assets being possessed. If we want to get on top of corruption, you have to show that you are serious about making examples of those caught.

  • mike - 2010-11-16 18:36

    "Suspended" ??? Whatever happened to the good old fashioned concept of being fired and arrested and made to repay the debt one way or another ???

  • gcr - 2010-11-16 18:46

    It is unbelievable that this organ of state can function in such a fashion. It serves no purpose to suspend people and then take absolute months to investigate. The hearing should be swift based on outputs from the report showing their incompetence and then allow the foresenic auditors the dig up the dirt and the people must be charged criminally. This area fell under Jeff Radebe just show how absolutely ineffective he really is as a minister - he should be fired as well

  • SimonP - 2010-11-16 18:57

    Just like SABC, the culprits hearing will suspended until everyone forgets. Cadre deployment at its very finest

  • Realist - 2010-11-16 19:33

    Bring in the Hawks, attach assets. Give the crooks a holiday in prison.

  • SaintBruce - 2010-11-16 20:45

    This is the very department that is supposed to run AARTO and the eNatis and the new tollgate systems! The oversight department is the Dept. of Transport that Jeff Radebe heads up, isn't he the guy that fouled up Eskom with Alec Erwin? It is very hard to understand how such large sums of money are wasted, blown, misappropriated in a very short space of time without being noticed. Surely an audit on a company of only 140 persons can't cost R 34 million??? There is a lot to answer for and when South Africans reach the tipping point a Revolution will start and the ANC will be like the French 'royalty class' who may just begin to hear the voice of the Red Queen...."off with their heads" faintly in the distance slowly drawing nearer. How much more must we hear? Is there ANY government department that has not been named YET in the media in this shameful way? I can't think of one, can you?

  • DianaB - 2010-11-17 10:36

    Ho hum, oh dear, they got caught with their fingers in the pie - well, they'll be suspended on full pay until it's all forgotten and then the bunch of them will be promoted to successfully steal more.... the ANC has fine-tuned theft to a fine art!!!!

  • Neal - 2010-11-17 21:47

    It is time for Zuma to set the example of accountability! These on-going sagas of ineptitude, corruption, nepotism etc are, after 18 months at the helm, simply unacceptable from. Time to resign without the traditional pension! How long will this country's electorate put with this disgusting government performance?

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