‘The Change we want to see on our Roads” RTMC ANNUAL REPORT 2010/11 2 PRESENTATION TO THE PORTFOLIO COMMITTEE ON TRANSPORT DATE: 12 October 2011
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‘The Change we want to see on our Roads”
RTMC ANNUAL REPORT2010/11
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PRESENTATION TO THE PORTFOLIO COMMITTEE ON
TRANSPORT
DATE: 12 October 2011
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OutlinePART 1
Introduction2010/11 PrioritiesBusiness Performance Operating EnvironmentPerformance against targets
PART 2
Statement of Financial PositionStatement of Financial PerformanceIrregular, fruitless and wasteful expenditureAudit Report
PART 3
ChallengesLooking ahead
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IntroductionThe beginning of the 2010/11 financial year was
marked by a disbanded Board and an Acting CEO at the helm; broken governance systems and a
Corporation on the brink of collapse.
A Ministerial Task Team was appointed by the Chairperson of the Shareholders Committee. The
output of the Task Team detailed recommendations that were put before
management for implementation in order to improve the state of the Entity
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Basis for PrioritiesThe Priorities of the Corporation were informed by the Goals as set out in the Strategy and the Task Team Recommendations:
The RTMC Strategy for period under review focused on six goals Effective and sustainable law enforcement and traffic control;Sustainable human resource capacity in the road traffic
environment;Road Traffic Information Hub;Strengthening institutional capacity;Protection of road infrastructure and the environment and Effective stakeholder management and partnership.
The strategy provided a solid base on which performance can be based whilst the recommendations focused on the rectification of processes and systems in a challenging business environment
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Operating Environment• Staff Compliment
The staff complement of the Corporation was recorded at 145 on 31 March 2010 and 137 was recorded on 31 March 2011. As at 31 May 2011 the complement was at 361 as a result of the establishment of the National Traffic Police
• Management TeamThe depletion in Executive Management from, suspensions (5) and the separation of RTIA from RTMC (1) was strengthened by new appointments and secondments from the DoT, as well as Acting Positions from the available management pool
• Employer/ Employee RelationshipEffective labour and employer relationship were managed through a recognition agreement with Nehawu
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Operating Environment (2)• Change Management
Change management was heightened in line with the recommendations of the Ministerial Task Team, Standing Committee on Public Accounts and Portfolio Committee
• Governance The Road Traffic Infringement Agency was successfully separated from the RTMC and supported by the RTMC throughout the separation process
• Internal business processesFinancial and human resource management systems were implemented to support the internal business processes
Performance Against Strategic Targets Goal 1: Effective and Sustainable Law Enforcement and Traffic Control• National Rolling Enforcement Plan target of stopping a
million vehicles per month achieved, October 2010- March 2011 as follows:
• AARTO readiness for traffic authorities and systems determined
• National Road Traffic Law Enforcement Code developed• 231 Traffic Officer Trainees Trained for absorption by the
National Traffic Police
Number of vehicles stopped 7 734 766
Number of Notices Issued 2 274 369
Number of vehicles discontinued 24 812
Number of Drivers Arrested 42 892
Performance Against Strategic Targets Goal 1: Effective and Sustainable Law Enforcement and Traffic Control (2)
• Safe Road Users Educational Programmes achieved the following numbers:
• There was a 0.86 percentage reduction in fatalities in comparison to previous year
• Peak times were managed through activation of festive season campaigns in the major travel routes
Number of schools on Scholar Patrol 2402Number of learners on participatory educational techniques
163
Number of Schools on Road Safety Debates 549
Performance Against Strategic Targets Goal 2: Sustainable Human Resource Capacity in the Road Traffic Environment
• 1 597 learners enrolled at Traffic Training Colleges for qualifications including for registered qualification for Traffic Officers (this figure includes the 231 traffic trainees of the NTP)
• 363 Examiners of Driving Licences and 97 Examiners of Vehicles trained
• RTMC monitored and evaluated the 13 Traffic Colleges according to set standards to ensure compliance and enhance quality
• RTMC developed and registered three new qualifications with SAQA, additional 13 unit standards were registered
• A Policy for Traffic Training Centres has been developed and will be implemented in 2011/12 to ensure stringent measures and standards for traffic training centres
Performance Against Strategic Targets Goal 3: Road Traffic Information Hub
• 118 Major Accidents investigated, cause and recommended remedy reports compiled and sent to relevant authority
• National Fatal Accident Information Centre recorded crashes and the National Traffic Call Centre continued to receive and record bad driving reports from Voluntary Public Traffic Observers
• Traffic Offence Survey conducted to determine levels of law compliance in road safety and to assist in prioritisation of law enforcement interventions
Peformance Against Strategic Targets Goal 4: Strengthening Institutional Capacity• Internal policies pertaining to business support
functions reviewed• The restructuring process ensued, internal
consultation and draft structures developed • The Shareholders Committee convened twice in the
year under review• Management of disciplinary matters pertaining to
suspended personnel was prioritised• Established the National Driving Schools Forum with
the different national driving schools associations• New offices for a conducive environment occupied
and previous irregular lease discontinued
Perfromance Against Strategic Targets Goal 5: Protection of road infrastructure and the environment
• The RTMC had planned to coordinate functions pertaining to weight bridges and the testing testing of gas emissions, this was not achieved as the functions related to these outputs are still with the Department of Transport
• South African Safety Audit Manual reviewed • The International Road Assessment Programme
(iRAP) was proposed targeting assessment of 4000km of road infrastructure in 2011/12
Performance Against Strategic Targets Goal 6: Effective Stakeholder Management and Patnerships
• Msanzi Traffic Beat a Road Safety magazine was launched and is distributed to stakeholders quarterly
• Partipation in various cross cutting meeting and conferences including the RTMCC, LETCOM and International Association for Chief of Police Conference
• RTMC acquired only membership on the Unite Nations Road Safety Collaboration in the SADC region
• Sustainable media liaison strengthened to ensure information and education of public on various aspects of road safety
• Road safety partnership with the public and private institutions undertaken on various road safety programmes and campaigns
Part II
Annual financial Statements
2010/11
“All hands on deck, We are on course!”
Statement of Financial Position
• Reporting a state of technical insolvency
• Liabilities exceeds assets by R174 million
• Main contributor:- The liability of R200 million relating to the irregular use of transaction fees in 2009/10 financial year
Annual Financial Report – 2010/11STATEMENT OF FINANCIAL POSITION (B/S)
Current assets Amount Details Comments
Cash and bank R74 million •AARTO Accounts = R55 million
•eNaTIS Accounts = R16 million
•RTMC Main = R3 million
AAART Accounts: Infringement fees for both Gauteng Department of Community Safety, Tshwane Metro (TMPD) and RTIA paid into the AARTO national bank accounts
Funds in eNatis account represent transaction fees received by the RTMC from provinces and not yet paid over to the Department of Transport at year end.
Trade and other receivables
R183 million •Transaction fees due from Provinces = R125 million (2010: 150 million)
•AARTO Infringements due from Issuing Authorities = R31 million
•Post Office recovery costs for TMPD and JMPD = R19. 1 million (R10.8 million and R8.3 million)
•RTIA recovery costs = R7.3 million
- Transaction fees receivable from Provinces.- 70% of all outstanding debts are within the 90 day period- 30% of the total debts is long outstanding (R37 million)- R33 million of the long outstanding balance is shared amongst the three provinces {Limpopo (R9 million), Mpumalanga (R12 million) and North West (R12 million)} and these relate to the period when issuing authorities were still paying directly to the RTMC
As per the AARTO Act, all infringements collected by collecting authorities must be paid over to the Agency (AARTO Account).
RTMC’s Post Office account used for the postage of infringements for TMPD and JMPD and amounts recoverable
RTMC performing administrative function of the RTIA in terms of AARTO regulation 2 and expenditure incurred recoverable
Property Plant and Equipment
R20 million •PPE = R10 million•Intangible assets = R10 million
•Accident Reporting system written off during the reporting period
Annual Financial Report – 2010/11
STATEMENT OF FINANCIAL POSITION (B/S)Liabilities Amount Details Comments
Payables R452 million
• R125 million = Transaction fees due from provinces and payable to DoT
• R213 million = Transaction fees (Irregularly utilized (R200 M)and balance at bank plus fair value adjustment )
•R79 million = AARTO infringements
Same as in account receivables
•Mainly transaction fees irregularly utilized in 2009/10 financial year
•Infringements fees paid into AARTO national bank account and payable to issuing authorities and the RTIA. Reconciliation and disbursement ongoing
Annual Financial Report – 2010/11STATEMENT OF FINANCIAL PERFORMANCE (I/S)
INCOME Amount Details Comments
Government grant R73.6 million (2010: 83 million)
Government grant allocated to the Corporation for 2010/2011 was R73.6 million, having reduced by 11% from the previous financial year.
Other income R3,7 million
R883K
•R2. 9 million – contribution by SANRAL for the training of traffic police.•Difference relate to other sponsors and sundry income (disposal of asset)
•R98 million owed by JMPD written-off in the previous financial year (restatements of financials).
•3% collection fees recognized as income and only amounted to R800K in the reporting period
EXPENDITURE
Operating expenditure
R161 million ( 2010: 265 million)
Key drivers:
•Payroll = R59 million•Assets written off/ retired = R48 million•Impairment of assets = R8 million•Lease rentals = R8 million•Depreciation = R8 million•Other projects = 14 million
•Payroll costs increased by 10% from the previous financial year•Accident reporting system valued at R57 million discontinued•Impairment of hardware relating to ARS(R8 million impairment)
Deficit for the year R81 million ( 2010: 163 million) Mainly due to the asset written-off and depreciation
Annual Financial Report – 2010/11
IRREGULAR EXPENDITURE
Nature 2010/11 Amount
2009/10Amount
Comments
Total irregular expenditure
R34 million
Incurred in previous years
R360 million Irregularly expenditure reflected in the current financial year related to the following:-Lease rental for the previous building = R15.9 million-Procurement of IT Help desk = R8.1 million-Procurement of IT Infrastructure = R9.9 million
All of the above were investigated as part of the Ministerial Task Team
NOTE: No irregular expenditure incurred on the procurement transactions undertaken during the reporting period
Annual Financial Report – 2010/11
FRUITLESS AND WASTEFUL EXPENDITURE
Nature 2009/10 Amount
2008/09Amount
Comments
Accident Reporting System discontinued
R48.6 million
- Assessment of the system was conducted
-Accident Reporting System would have been costly to maintain (license fees, etc)-Other stakeholders (SAPS, SANRAL) not happy with the system-Crash Information Management System (CIMS) is being developed internally
Interest paid on settlement of suppliers
R163 K R83 K Investigations underway and on-going improvements
Annual Financial Report – 2010/11AUDIT REPORT
Audit Opinion Basis of opinion Comments
Adverse audit opinion -Trade and other receivables
-Property, plant and equipment
-Intangible assets
-Comparative figures
SAPO recovery costs from JMPD (R6.2 million) and group collection authoritiesfor AARTO infringements (R3.5 million) – process of recovering the debt is underway
The location of assets were not indicated on the asset register
Moved to new building in January and the asset verification was conducted in February 2011. The results of the count were still being actioned at the time of the audit. A comprehensive asset register with locations and responsible persons was given to the auditors on the 8th
July 2011 and was noted.
IT Help desk of R8.1 million not impaired
The Help Desk system not yet complete and the assessment of whether the Corporation must continue with the system is underway.
Financial transactions relating to the RTIA included in the comparative figures
Bases of the adverse report in the previous financial year. The RTIA has prepared its own annual financial statements for 2010/11.
Annual Financial Report – 2010/11AUDIT REPORT
Audit Opinion Basis of opinion Comments
Adverse audit opinion -Trade and other receivables
-Property, plant and equipment
-Intangible assets
-Comparative figures
SAPO recovery costs from JMPD (R6.2 million) and group collection authoritiesfor AARTO infringements (R3.5 million) – process of recovering the debt is underway
The location of assets were not indicated on the asset register
Moved to new building in January and the asset verification was conducted in February 2011. The results of the count were still being actioned at the time of the audit. A comprehensive asset register with locations and responsible persons was given to the auditors on the 8th
July 2011 and was noted.
IT Help desk of R8.1 million not impaired
The Help Desk system not yet complete and the assessment of whether the Corporation must continue with the system is underway.
Financial transactions relating to the RTIA included in the comparative figures
Bases of the adverse report in the previous financial year. The RTIA has prepared its own annual financial statements for 2010/11.
Annual Financial Report – 2010/11AUDIT REPORT
Audit Opinion Basis of opinion Comments
Emphasis of matter
-Restatement of corresponding figures
-Going Concern
-Irregular, fruitless and wasteful expenditure
-Material losses
-Budget reconciliation
•Amount owed by JMPD written off in the previous financial year
•AARTO report of the previous financial year adjusted – due to the eNaTIs system that cannot provide static reports and payments updated by TMPD officials reflecting as money received at TMPD instead of the AARTO main account
•State of technical insolvency – Write-off of the transaction fees debt proposed
•R34 million relating to irregular expenditure as reported•R48 million relating to asset write-off as reported
•Impairment of the capital costs relating to the ARS R8 million)
ChallengesThe following are some of the challenges as experienced in the year under review:• Financial sustainability of the RTMC, current budget inadequate,
corporation in a state of insolvency• Lengthy disciplinary proceedings for suspended employees; the internal
disciplianary code being strengthened to ensure quicker resolution of disciplianry cases
• Governance structures (absence of a Board and inability of Shareholders Committee to meet)
• Legislative framework including the functions not transferred to the Corporation
• Unfunded mandates of the Corporation including AARTO• Change Management, associated risks and resistance of new clutureWe are continually developing appropriate strategies to counter the identified challenges and risks
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Looking AheadRTMC as lead Agency on Road Safety gearing for Decade of Action Road Safety Interventions by focusing on safe road users, safe roads, safe vehicles, safe speeds and management of road safety informationFocus on Safe System Approach-holistic view on road safety management and the design of programmes.Building and strengthening relationships with key stakeholdersCapacity building of personnel and the development of a performance culture by ensuring corporate excellenceImprovement of statistical data by impelemting the crash data information management systemIncreased capacity in law enforcement with the introduction of the 24/7 shift systemImplementation of the new organisational structure in line with the strategic focusImplementation of measures for the attaintment of an unqualified audit report
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THE RTMC SUPPORTS THE DECADE OF ACTION TO ROAD SAFETY2011 ‐2020
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