Traffic parastatal in major financial mess

The Road Traffic Management Corporation is cutting back on costs as it prepares for its busiest time of the year.

It is busy slashing telephone and photocopying costs ahead of the festive season - yet its suspended chief executive continues to draw his monthly salary of R103000.

Ranthoko Rakgoale has been paid more than R800000 since his suspension by the office of Transport Minister S'bu Ndebele in March. Rakgoale, who earns R1.2-million a year, is yet to be charged following allegations of mismanagement.

The RTMC's latest annual report has detailed a staggering R380-million in irregular and fruitless expenditure during Rakgoale's watch.

This includes R17.3-million which was spent on an IT system that was never used.

Responding to a parliamentary question, Ndebele confirmed that a formal disciplinary inquiry was being prepared. He said that steps would be taken against Rakgoale to recover some of the money "in line with the outcome of the disciplinary process".

The RTMC's annual report, yet to be tabled in parliament, shows further wasteful spending by the parastatal - responsible for road traffic management across South Africa - including:

• R59.4-million to buy an accident-reporting system without putting it out to tender;
• R12-million paid to service providers without approval from the finance section;
• R200-million in licence fees collected on behalf of the Department of Transport which were "irregularly" used by the RTMC;
• R82.5-million paid out to the SA Post Office for the postage of traffic fines without concluding a contract with it; and
• Spending an extra R5.3-million on hosting an international conference in Cape Town, although only R4-million had been budgeted for it.

The auditor-general's office found that the RTMC had budgeted for a deficit in the past financial year - in direct contravention of the Public Management Finance Act.

Rakgoale declined to comment as he had not seen the report. Insisting that there was no wasteful expenditure, he said he had only recommended the IT contract for the Oracle enterprise resource planning (ERP) system, and that the RTMC's board was ultimately responsible for awarding it.

"There was justification for such a system but I am not liable for any wasteful expenditure."

Said Rakgoale: "To be honest, I don't enjoy sitting at home and earning a salary because I am not working for it."

He said he was anxiously waiting for the disciplinary inquiry so that he would get an opportunity to put across his side of the story.

The ERP system was meant to streamline the payment of staff salaries but, more importantly, it was supposed to have made it easier for motorists across South Africa to pay their traffic fines. It has been canned by acting CEO Collins Letsoalo.

This week Letsoalo said the RTMC had been forced to shelve certain projects: "We will slow down the spending on some of the projects that were supposed to finish this year."

One of the pilot projects that has been shelved is a R22-million electronic vehicle-identification system that would have resulted in an electronic chip being used on a vehicle's licence disc to monitor which vehicles were legal or illegal.

Said Letsoalo: "We have cut telephone and photocopying costs as well as catering and travel costs."

The Democratic Alliance's shadow minister for transport, Stuart Farrow, said Ndebele needed to take urgent action to stop the situation at the RTMC "from going from bad to worse".

Logan Maistry, a spokesman for the Ministry of Transport, said those found guilty of fraud, corruption and mismanagement would face consequences.