department of transport portfolio committee: department of transport annual report 2006 18 october...

Department of Transport

Portfolio Committee:Department of Transport Annual

Report 2006

18 October 2006

1

• Achievements• Key Policy Developments• Transfer Payments• Achievements against set targets for 2005/06

per Programme• Oversight Report• Audit Report• Financial Overview

Contents of presentationDepartment

of Transport

2

• Transport Policy, Economic Analysis and International and Regional Integration

• Transport Regulation and Public Entity Oversight

• Transport Logistics and Corridor Development• Transport Policy and Regional and International

Integration• Transport Policy• Integrated Planning and Inter-sphere Co-

ordination• Public Transport

AchievementsDepartment

of Transport

3

Department

of TransportTransport Policy, Economic Analysis and International and Regional Integration• An initial draft of the Performance Indicator Framework (PIF) was

completed• The draft PIF was then updated to accommodate the various

industry stakeholders’ inputs up until December 2005• After the consolidation of inputs by the various transport

stakeholders a technical consultation process was initiated with Statistics South Africa, to assist in determining the measurability of the various indicators identified in terms of the draft Performance Indicator Framework

• The technical consultation process with Statistics SA continued beyond the 2005/06 financial year

• Baseline studies on the performance of the transport system and data collection in terms of the approved framework is continuing in 2006/07

4

Department

of Transport Transport Regulation and Public Entity Oversight

• The IMO approved in principle the Southern South African Area as a Special Area where no oil spills will be allowed

• A draft Ballast Water Policy was developed• The South African Ship Register Advisory Group was established

to identify gaps and rectify them in order to advance the South African Ship’s register

• The National Ports Bill became an Act• The Maritime Security Coordination Centre was created:

• Its objective is to facilitate the implementation of the Merchant Shipping (Maritime Security) Regulations

• The Centre performs security clearance of 565 ships per month• The Centre also facilitated the approval of Port Security

Officers in all seven commercial ports, including the approval of maritime security plans

• The Department concluded Merchant Shipping Agreements with four States i.e. Gabon, Russian Federation, India and the Democratic Republic of Congo

5

Department

of Transport

Road Traffic Management Corporation:• The Law Enforcement Technical Committee, comprising of the

operational heads of the provincial and metropolitan authorities, representatives of the SAPS, Justice, Arrive Alive communications (DOT), South African National Roads Agency (SANRAL), Road Accident Fund (RAF) and private sector bodies, was established and meet regularly to plan a co-ordinate, integrated and cohesive enforcement management strategy

• Phases 1 and 2 of Patrol Car Project, comprising of 120 vehicles, were distributed to the various provinces for deployment on their respective identified hazardous locations

• The Road Traffic Management Corporation became operational during October 2005 through the transfer of road traffic management functions and the secondment of staff from the Department

Road Accident Fund:• The RAF processed 188 185 claims and reduced its claims backlog

through additional funding of R2,7 billion that was secured

Transport Regulation and Public Entity Oversight (continued)

6

Department

of Transport Transport Regulation and Public Entity Oversight (continued)

Cross Border Road Transport Agency:

The entity provided effective Cross-Border Road Transport Law Enforcement to Enhance law enforcement activities:

• Road blocks 2869• Inspections 80652• Prosecutions 4869• Cabotage 132• Overloading 61

South African Rail Commuter Corporation (SARCC):• The pilot project for rail security in the Western Cape was a success and

plans are in place to roll out the project to Kwa-Zulu Natal and Gauteng• Successfully negotiating the consolidation of Metro Rail into SARCC

Railway Safety Regulator:• The development of safety standards was finalised• Safety Management Plans of the operators were assessed and evaluated.

During the year under review, a total of 197 Safety Permits were issued

7

Department


Public Entity Oversight:• The majority of the Boards at the public entities were appointed or

in the process to be appointed• Department is currently in the process of finalising the Transport

Agencies General Law Amendment Bill• The shareholder compacts were signed and concluded with the

entities• The performance agreements are currently in the process of being

finalised with the public entities• The RAF Amendment Act, 2005 (Act No.19 of 2005) was passed

by Parliament to support the sustainability of the fund• A system of quarterly reporting was introduced

Land Transport Regulation:• An improved national training syllabus for traffic officers was

introduced during January 2006 while 5000 officers were trained to deal with hazardous materials

8

Department


Land Transport Regulation (continued):• A comprehensive, emotive, television and radio advertising on road

safety and public relations campaign was run, reaching 97% of the population.

• The migration of the e-NaTIS system has seen good progress with an expected completion date towards the end of November 2006

• The agreement with the Special Investigation Unit resulted in, amongst others, the following:

• Current criminal cases 3072• Current prosecutions 519• Convictions 480

• The National Call Centre was established, which registered over 5000 voluntary observers and recorded the reporting of a vast amount of offences

• Various legislative and regulatory changes were made to the road Traffic Act, including reflective marking of trailers and trucks

• Operation Juggernaut continued, screening over a million heavy and passenger vehicles in 2004 and 2005

9

Department

of Transport Transport Logistics and Corridor Development

• The National Freight logistics Strategy was finalised and approved by Cabinet in 2005

• The first draft of the Branch line Strategy was developed to articulate a vision and strategic approach to revitalising non-core rail lines to ensure economic sustainability of small towns and rural communities

• A forum structure was established on the Gauteng – Maputo Corridor

• A Cape Town Metropolitan Freight Study was completed to develop strategies to deal with challenges regarding freight movements in the City of Cape Town

• The Department led the revival of some rail branch lines, which include the Nkwalini Branch Line and the Belmont – Douglas Branch Line

• The revitalisation of these lines has helped stop cargo shifts of 430,000 tons of sugarcane and 500,000 tons of grain from rail to road respectively

10

Department

of Transport Transport Policy and Regional and International Integration

• The Draft Charter on Environmental Coordination was finalised• Provincial research and development visits were completed:

• To establish a good working relationship towards the development of the research agenda

• To initiate a structure for research coordination in all spheres through the formation of a Research Coordination Committee

• The National Household Survey results were submitted to Cabinet in July 2005 and was released in September 2005

• The Transport Innovation and Technology Research Strategy were finalised in October 2005

• A draft Research and Development Plan for the Department was developed in February 2006

• A draft document on the Centres of Excellence was developed in June 2005

• The draft Science Technology and Innovation Activities Cooperation Agreement was developed, together with an Interdepartmental Committee to report on progress to the Ministers of Science and Technology and Transport

11

Department

of Transport Transport Policy

• White Paper on National Transport Policy Review – achieved during 2005/06:

• Project plans were developed and approved in principle• Methodology document was completed• New trends and issues in transportation policies were identified• Policy Gap analysis was finalised• Provinces consulted on what issues should be included in the review

process• Questionnaires were drafted as means of soliciting information from

stakeholders.• A Report on the issues raised by Provincial policy units was compiled

• Milestones achieved towards the development of the Maritime Transport Policy:

• First round of consultations during September to October 2005.• Presentations to Provincial legislatures• The setting up of a dedicated website• The development of the Draft White Paper was achieved by 9

December 2005• A Core Group was established within the Department to interrogate and

fine tune the Draft White paper

12

Department

of Transport Integrated Planning and Inter-sphere Co-ordination

• Developed a capacity building programme on the NLTTA - to raise awareness on the legislative mandate and requirements of land transport planning and to ensure effective management of transport operations

• Integrated Rural Mobility and Access (IRMA) projects:• The demonstration phase commenced in three ISRDP nodes• Feasibility studies and pre-implementation plans were completed. • Objectives are to intensify the role of non-motorised transport; to

strengthen passenger transport services and strengthen rural freight services

• A revised Non Motorised Transport implementation plan was drafted to facilitate the rollout of 1 000 000 bicycles by 2010

• An agreement was entered into with the SABS-Design Institute of South Africa to develop NMT concepts, which will be more responsive to the rural environment and will be more affordable and sustainable

• For EPWP purposes, evaluation of road maintenance projects in rural areas indicated that 575 transport projects were in the pipeline with the potential of 223 410 job creation opportunities for local people

13

Department

of Transport Integrated Planning and Inter-sphere Co-ordination

• The Road Infrastructure Strategic Framework for South Africa was completed in 2005 and is currently being prepared for tabling in Cabinet. Based on the action plan, the following projects were implemented:

• The Road Asset Management Systems Audit project:• To take an inventory of information systems that are used by roads

authorities across the spheres• To define a minimum system that roads authorities should put in

place to effectively manage their road networks• To define a system that the DOT should implement for decision

support.• A feasibility study for road transport interventions in the Nquthu area,

which augmented an access road that was recently constructed with assistance from the DOT. The study will ensure that the community of Qudeni village gets comprehensive services that will enable integrated development.

• Transfer of over 3000km of roads from provinces to SANRAL• The 2010 Transport Action Agenda was finalised:

Priority statements have been submitted and evaluated and over 250 projects have so far been approved. Budget allocations include R241,7 million in 2005/06 and R3,5 billion from 2006/07 to 2008/09 from the Public Transport Infrastructure Fund 14

Department

of Transport Public Transport

Taxi Operations:• Vehicle safety specifications approved• Tender for scrapping agency advertised and evaluated• 98% of operators applied to have their permits converted

Bus Operations:• Passenger Charter was drafted• The Model Tender Document was drafted• Moratorium lifted on the transformation of Interim Contracts to Tendered and

Negotiated Contracts for bus subsidies:• MINMEC decision that bus subsidies should be transformed to public

transport subsidies• All interim contracts must be transformed into tendered and negotiated

contracts

Rail Operations• Interim Passenger Rail Plan was developed focusing commuter rail services

on priority corridors with high passenger volumes • Phase 1 of the passenger rail consolidation completed• Designs and tenders for the Khayelitsha rail extension was finalised

15

Key Policy DevelopmentsDepartment

of Transport

16

Department

of Transport Key Policy Developments

• Draft National Freight Logistics Strategy approved by Cabinet• Interim Passenger Rail Plan approved by Cabinet• National Land Transport Transitional Act (NLTTA) amended to regulate the

taxi industry• Vehicle safety Regulations for the taxi industry approved by Cabinet• The enactment of the National Ports Act will lead to the setting up of the

Independent Ports Regulator• The Road Accident Fund Amendment Act (19 of 2005) was passed• A new National Road Safety Strategy was developed• The Minister approved the 23rd Amendment, to the Civil Aviation

Regulations• Cabinet approval obtained for submission of the Montreal and Cape Town

Conventions ratification to Parliament. Requests for ratification and draft bills tabled in Parliament on 15 February 2006

• A template for the fast tracking of the implementation of the Yamassoukro Decision was created

• Draft Transport BEE Charter completed

17

Transfer PaymentsDepartment

of Transport

18

Department

of Transport Transfer Payments

Recipient Reason for transfer R’000

National Sea Rescue Institute Search and rescue 555

Hamnet Search and rescue 50

Mountain Club of South Africa Search and rescue 50

Off Road Rescue Unit Search and rescue 50

South African Maritime Safety Authority Government services and management of Maritime Rescue Coordination Centre

11 608

S.A. Rail Commuter Corporation Ltd. Commuter rail capital and subsidies

2 844 677

S.A. National Roads Agency Ltd. National roads 1 752 720

S.A. National Roads Agency Ltd. Non motorised transport 3 759

Road Accident Fund Financial assistance 2 700 000

Road Traffic Management Corporation Road traffic management 73 150

Railway Safety Regulator Rail safety regulation 20 00019

Department

of Transport Transfer Payments (continued)

Recipient Reason for transfer R’000

South African Civil Aviation Authority Government services 6 390

Nine Provinces Bus subsidies 2 297 753

Ten Municipalities Public Transport Infrastructure Fund - 2010 Soccer World Cup

241 710

SANTACO Financial assistance – taxi process

10 600

Three Universities Capacity Development 6 684

Four international organisations Membership fees 2 754

RSC levies, training levy, retirement benefits and sponsorships 947

Total 9 973 457

20

Achievements against set targets

Department

of Transport

• Administration• Transport Policy and Regional Integration• Transport Regulation and Public Entity

Oversight• Integrated Planning and Inter-sphere Co-

ordination• Transport Logistics and Corridor Development• Public Transport

21

Department

of Transport Administration

Planned output Actual performance against target

Passing of priority legislation by Parliament

• The Road Accident Fund Amendment Act, No.19 of 2005 was assented to by the President in December 2005 and Gazetted on 5 January 2006

• The National Ports Authority Act, 2005 Gazetted on 4 August 2005

NLTTA Amendment Bill, to • The Bill has been approved by the NCOP and is currently being debated by the Portfolio Committee

Develop and review HR policies and practices aligned to the strategic objectives

• 11 policies sanctioned by DG but not finalised with organized labour

• 8 policies in development/revision stage• A recruitment strategy that also focuses on alternative

measures when normal procedures fail

Revised human resources plan to ensure alignment with the new structure

• Finalised, approved & implemented• Compliant with Chapter 1, III D of the Public Service

Regulations, 2001 (as amended)

22

Department

of Transport Administration (continued)


Development of a strategic plan • Finalised and published

Enhance capacity of DOT through structured capacity development initiatives

• Out of 39 pupils that completed studies at least 16 have been employed-within DOT

• At least 11 learnerships and 53 interns were recruited and placed across various branches

Management of Centres of Development

• 1453 students were funded in various transport fields such as civil engineering, transport policy, transport economics

Develop, market, monitor and review employee assistance programme (EAP) related policies and guidelines

• Completed EAP policy review• At least 20 peer educators were trained• Drafted gender, disability and youth policies

Manage the current prevalence rate of HIV/AIDS

• At least 166 officials participated in HIV and Aids related workshops

Implementation of new Master Systems Plan

• Master Systems Plan framework finalised

23

Department

of Transport Administration (continued)


Risk assessments done Risk management plan and Committee structure established

• Risk Management Committee established and a risk management strategy was developed.

• Policies developed for:– Risk management– Fraud prevention– Whistle blowing

• Risk assessment facilitated for completion 30 June 2006

Annual and Three Year Rolling Internal Audit Strategic Plans finalized and approved by the Audit Committee

• Annual and Three Year Rolling Internal Audit Strategic Plans finalized and approved by the Audit Committee

24

Department

of Transport Transport Policy and Regional Integration


White Paper on National Maritime Transport Policy

• First round of Stakeholder / Public consultations held• Presentations to Provincial legislatures including Gauteng;

KZN; Limpopo; North West, and Western Cape• Dedicated website set up for broader public participation

New aviation policy and Aviation Bill

• Green Paper upgraded through further research and consultation

• Draft White Paper submitted to Cabinet• Further research conducted

Economic performance indicators framework (PIF)

• Initial draft of the PIF completed • Consultation process initiated with Statistics South Africa to

determine the measurability of the various indicators

China Fact Finding Mission • Hosted Chinese on fact finding mission on roads and exchanged information

Intergovernmental Trade and Economic Committee (ITEC) with Russia

• Maritime Agreement signed. • Aircraft Leasing and Airworthiness Agreement initiated

25

Department

of Transport Transport Policy and Regional Integration (continued)


Sudan: SPLM Capacity and Institution Building

• First round of training and placement for SPLM/ Government of South Sudan senior members completed

The Flanders: Continuation of funding of road safety project proposals for provinces

• Approval for road safety projects funding continuation in some Provinces by the Flanders’ government

SA-India: Implementation of identified areas of co-operation

• Maritime Agreement initialed. • Facilitated awarding of tender to ACSA for the

concessioning of the New Delhi airport.

African Union Air-Transport Ministers Conference

• Recommended specific policy and strategic actions for removal of constraints and the strengthening of the sector

India-Brazil-South Africa (IBSA) cooperation

• Participated in IBSA Transport Working Group• Negotiations of trilateral maritime and aviation agreements

at an advanced stage

26

Department

of Transport Transport Regulation and Public Entity Oversight


Develop, coordinate, administer, review and evaluate plans, legislation, policies, procedures, standards and training requirements for Search And Rescue cooperation and coordination

• Facilitated the launching of the Aviation Rescue Coordinating Centre

• The Search and Rescue (SASAR) National Policy Manual was revised

• The 2nd Biannual National Search and Rescue Conference was held

• Agreements were signed with Lesotho, Botswana and Namibia

Reliable, credible, electronic national traffic information system

• The migration to the new e--NATIS is on schedule for end November 2006. Old system working at 99% efficiency

Development and maintenance of bilateral air services agreements

• Of the 10 States on the 2005/2006 programme, only 5 States were engaged in negotiations

• Concluded a trilateral MOU with India and Brazil after March

Ratification and implementation of International Civil Aviation Organisation conventions

• Montreal and Cape Town Conventions approved by Cabinet for submission to Parliament

27

Department

of Transport Transport Regulation and Public Entity Oversight (cont.)


Maritime security coordinating centre established and fully operational

• Maritime security coordinating centre set up by June 2005, recruitment of additional staff still ongoing

National oil spill contingency plan completed

• National Oil Spill Contingency Plan is finalised and will be submitted for approval in 2006/07

National Ports Act • The Bill, enacted – Translation into Zulu in process

Service level agreements for Public Entities

• Service level agreements were concluded with the public entities to monitor and evaluate performance

Financial and risk management and internal control systems for Public Entities

• All public entities in compliance with accounting standards by 2005

• Compliance to the PFMA reports formed part of the quarterly reports received from the public entities

Promote the alignment of public entity strategies with Government policy objectives

• To a large extent the strategies and objectives were included in the entities performance agreements

28

Department

of Transport Integrated Planning & Inter-sphere Co-ordination


Transport services and infrastructure based on approved local transport plans

• 80% of integrated transport plans completed• 70% of public transport services based on transport plans

adopted by local government

Implementation of the National Land Transport Transition Act

• Draft framework for final national land transport legislation approved by Cabinet

Road infrastructure strategic Framework

• Action plan for implementing the strategic framework completed

• Secondary road networks Identified

National overload control strategy • Design for a prototype mobile load control unit completed• Process to develop prototype for piloting initiated

Improved public transport facilities • Multi-modal public transport interchange in the Inanda Ntuzuma KwaMashu node completed

• Public transport facility in Alexandra, Gauteng, completed

29

Department

of Transport Integrated Planning & Inter-sphere Co-ordination (cont.)


Promotion of non motorised transport

• 4736 bicycles were delivered• Tender processes underway to deliver 12264 bicycles in

2006/07

Integrated Rural Transport Strategy • Service Provider was appointed for the technical design and tender documentation in the Sekhukhune Distrcit Municipality

• Bid Evaluation is under way for the Umkhanyakude District Municipality

• Request for Bids will be closing on the 21st July 2006 for the O.R. Tambo District Municipality

• Strategy developed and to be submitted for approval

30

Department

of Transport Transport Logistics and Corridor Development


Centralised Freight Information Platform & freight scenario planning for 2014

• Completed 4 provincial databanks & started process in other 4 provinces

• Developed the National Freight Databank (NFD) – 80% complete with 2 Provinces left

• Developed National Freight Information Systems (NFIS) – completed 50% of user requirements

Implementation of key actions • Depends on the development of the various sub-sectoral or modal strategies. About 30% of the work is completed

Corridor mappingCorridor optimisation strategies

• Established corridor and freight forums in the various provinces

• Established KZN Freight Task Group• Launched Mpumalanga Freight & Logistics Forum• Rolling-out to North West & Western Cape

Consolidated freight information and statistics about movement of freight across the country

• Completed KZN, Gauteng, Mpumalanga, North-West, Western Cape

31

Department

of Transport Public Transport


Public transport strategy and implementation plan

• A discussion document and draft strategy have been completed

Restructured bus operations • A final draft Model Tender Contract Document was completed

• Applications for two negotiated contracts were received and published in the Government Gazette

Restructured and safer commuter rail service

• An Interim Passenger Rail Plan was developed and was approved by Cabinet

Develop a rail plan for public transport

• Developed a Passenger Rail strategy that directs the turn around in service provision, sustaining, and upgrading and expansion of the Rail Passenger Business

• 394 Coaches General Overhauled• 64 Upgraded

Key Performance Indicators for Rail Services delivery

• Preliminary operational Performance Indicators identified in Interim Rail Plan and included in MOU with SARCC

32

Department

of Transport Public Transport (continued)


Mabopane Station Redevelopment • Upgraded ablution facilities, fire detection, electrical sleeves, and existing stairs

• Access stairs completed

Extension of the Khayelitha Railway Line

• Completed up to construction phase - construction in progress

Restructured and consolidated passenger rail services

SARCC/ Metrorail consolidation completed on 1 May 2006

New Taxi Vehicle (NTV) safety specifications

• Compulsory safety requirements were finalised and published in 2005

Scrapping Administration Agency (SAA)

• The process of appointing the preferred bidder was undertaken during the year, and the SAA was appointed in June 2006

Taxi recapitalisation law enforcement

• The criteria and minimum standards of the testing centres were developed

33

Oversight ReportDepartment

of Transport

34

Department

of TransportTable 3.1 - Employment and vacancies by programme

establishmenttheadditional toPosts filled

rateVacancy

posts filledNumber of

postsNumber ofProgramme

1923.6%175229Operations)Office of the DG and Branch:Directorate: Communications,Transport Ministry, ChiefProgramme 1 (Office of the

340.5%4474Coordination)Planning and IntersphereProgramme 2 (Branch: Integrated

1832.9%4973Land Transport Regulation)Programme 3 (Chief Directorate:

228.6%4056Policy & Regional Integration)Programme 4 (Branch: Transport

646.8%3362Aviation and Maritime Transport)Programme 5 (Chief Directorate:

542.9%3663Corridor Development)Transport & Transport Logistics &Programme 6 (Branches: Public

5332.3%377557Total 35

Department

of TransportTable 6. 2: Total number of employees per occupational band

FemaleMaleOccupational Bands

TotalWhiteIndianColouredAfricanWhiteIndianColouredAfrican

422-16)Top Management (Level 15

61123146143013-14)Senior Management (Level

147114345154164(Level 9-12)and mid-managementexperienced specialistsProfessionally qualified and

1292512681428superintendents (Level 6-8)foreman andmanagement, supervisors,workers, junioracademically qualifiedSkilled technical and

3617118making (Level 3-5)discretionary decisionSemi-skilled and

decision making (Level 1-2)Unskilled and defined

377377814622510142Total

36

Audit ReportDepartment

of Transport

37

Department

of Transport Audit Report

4.1 Contract for the production of credit card format driving licenses:• Financial records were written up for 8 financial periods from March 1998 to

March 2006 on the PASTEL accounting system• Financial statements were compiled for the Card Production Facility (CPF)

for eight financial periods (first period 13 months)• The financial statements of the CPF were first consolidated with the financial

statements of the Department and provisionally submitted for audit• At an Audit Committee meeting on 26 May 2006 it was decided that the CPF

should be viewed as a Trading Account and that separate financial statements should be submitted for audit. Separate financial statements were submitted for audit by 31 May 2006

• The financial statements and records of the CPF, however, had to be reviewed to comply with Generally Accepted Accounting Practice (GAAP). The reviewed financial statements were delivered to the Department on 12 October 2006

Way forward:• The Department is in the process of ceding the contract to the RTMC• A decision on whether to apply for a Trading Account under the RTMC is

pending38

Department

of Transport Audit Report (continued)

4.1 Contract for the production of credit card format driving licenses:

(continued)• Contractors will be appointed to:

• Manage the bank accounts• Manage the assets• Write up financial records• Link transactions to the production of card licenses• Link transaction to the delivery of card licenses to Driver’ License

Testing Centres and reconcile the transactions with the NaTIS system• Reconcile transactions to the payment advice to the contractor

6.1 Fruitless and wasteful expenditure:• The contractor agreed to credit the Department with the amount of R12000

interest. The matter is being followed up by the project manager• Non arrivals and cancellations:

• Explanations from officials indicated that the “no show” report that is provided by Imperial Fleet Services is not reliable. Many bookings were cancelled within the required time frames, but still charged for, and the dates of a number of “no shows” on the report do not correspond with the dates of bookings made

• An investigation into all the cases is still underway to resolve the issues 39

Department


6.2 Irregular expenditure

Irregular expenditure declared in 2005/06:• Supplier appointed as Engineer for a project since 1993 without a contract

signed between the supplier and the Department: R 8 840 760:

The supplier was appointed as the Engineer in terms of the contract between the Department and the main contractor. The Department applied to the State Tender Board for ex post facto approval and stopped the services of the Engineer

• Human Resources obtained quotes for recruitment advertising services, but the cost of cumulative services rendered by two suppliers over two years exceeded the tender threshold of R200 000 and was deemed irregular by the auditors. The total amount declared as irregular amounted to R 3 393 109. An application for ex post facto approval was made to the Bidding Committee

• An employee did not obtain competitive quotations in two cases amounting to R 292 282 for gifts and the design of a logo for the African Union Conference that took place in May 2005. The employee was suspended and subsequently resigned. Legal opinion indicated that dismissal would have been recommended, however further State Attorney opinion is being sought.

• The Department’s office Services used Chauffeuring services of a supplier without being aware that the transversal tender already expired, resulting in irregular expenditure of R 65 335. Ex post facto approval being sought.

40

Department


6.2 Irregular expenditure (continued)

Irregular expenditure declared in 2005/06: (continued)• In 19 cases, refreshments were purchased for staff who worked after hours

without obtaining quotations, resulting in irregular expenditure of R 30 883. Explanations were requested from the managers who approved the expenditure, and most explanations are outstanding. The matter will be referred for legal advice and disciplinary steps. The Department issued a circular to prevent the purchase of refreshments without placing official orders via Supply Chain Management

• In two other instances, amounting to R2 500 and R1 200 no evidence were found that quotations were invited. These cases are being investigated for corrective action.

Irregular expenditure of previous years:• In June 2004 the Department requested an investigation from the Office of

the Auditor-General on contracts related to Government Motor Transport. The report revealed that officials irregularly requested an insurance company to pay a contractor for an outsourcing project of a Province. Payments amounted to R 1 187 740. The State Attorney concluded on 7 December 2005 that there seems to be a material dispute of fact as to whether the officials received proper permission for their actions, and that any claim that the Department may have might have expiredThe Department applied for ex post facto approval (More details)

41

Department



Irregular expenditure of previous years: (continued)• The escalation of management fees on the contract for oil pollution

prevention services ( R 1 655 230) was overseen when the contract was extended (with State Tender Board approval). SAMSA verbally agreed to escalate the management fees (confirmed by their CEO at the time in writing), but the verbal agreement was never put in writing

• The Department incurred costs amounting to R1 938 073 to ensure that a taxi conference could proceed during September 2001 because the National Conference Preparatory Committee did not receive all of the donor funds that were pledged. A forensic audit by the Auditor-General was completed and the matter was referred for a legal opinion. The legal opinion concluded that there was no indication that fraud was committed, and that any claim that the Department may have had, has prescribed. It was recommended that the amount should be written off as irrecoverable

• The former manager in charge of Arrive Alive communications contracted directly with a service provider contracted by GCIS instead of via GCIS for an amount of R 1 692 034. The Department’s Advisory Committee on Financial Irregularities advised that the matter should be condoned

• Thirteen cases of search and rescue services amounted to R 359 382 for which the State Tender Board since provided exemption from tender procedures, but not ex post facto approval for cases already incurred

42

Department



Irregular expenditure of previous years: (continued)

• In four cases, totaling R 89 090, written warnings were issued for non compliance with procurement prescripts

• In one case of R 7 917, in which no quotations were called for, documentary evidence is inadequate to identify the persons to be disciplined, although printing service was needed and rendered to the Department

• In one case amounting to R 9 150, a contract for cleaning services expired but was continued with due to an administrative oversight. The Advisory Committee on Financial Irregularities recommended a verbal warning to employees who may have been involved. The warning was issued

• In one case totaling R 26 268, former employees contracted a sole service provider on an ad hoc basis at amounts not exceeding R5000 per case. They were under the impression that services could be procured up to R5000 without the invitation of quotes. The matter was only detected after the employees resigned. The issue relates to the updating of NaTIS datasheets for which the individual was the sole service provider. An application was made to the State Tender board for ex post facto approval.

43

Department


6.3 Unauthorised expenditure: (link to details)• On 25 February 2004, SCOPA approved the historical unauthorised

expenditure, amounting to R23,97 million. The amount of R3,1 million was not written off because no decision was yet made by the State Tender Board

• The Office of the Accountant-General prepared legislation for Parliament to approve the SCOPA recommendations

6.4 Performance information:• Although some performance information was submitted late for audit, the

performance information was included in the annual report

6.5 Incompleteness of income – driver’s license registration fees:

Actual receipts Lag 6 months

Amounts that should have been received according to NATIS from 1/1/ 2000 to 23/7/2004

R 17 718 064 R 17 718 064

Receipts issued by DOT in the period(actual receipts / lag of 6 months)

R 17 062 034 R 18 680 158

Surplus (shortfall) (R 656 030) R 962 09444

Department


6.5 Incompleteness of income – driver’s license registration fees:

(continued)• Conclusion: The Department over recovered about R962000 from DLTC’s

over the period from January 2000 to July 2004• Further: Since the Regulation was repealed, amounts of R4,277 million were

by DLTC’s, which were not taken into account in the above calculations (records available for audit)

Way forward:• The Inspectorate is in the process of compiling a comprehensive record of

all receipts issued to DLTC’s for fees paid by them to the Department• The Finance Directorate will provide the Inspectorate with details of all

amounts paid directly into the bank account for which receipts were not issued, so that the details of these amounts can be incorporated into the records being compiled by the Inspectorate

• Amounts short paid and over paid will then be followed up with DLTC’s

45

Department


6.6 Non compliance with the National Road Traffic Act• All registered Driver’s License Testing Centres were inspected during

2005/06• Forty two per cent of Driver’s License Testing Centres did not comply with

minimum requirements• Recommendations were made mainly for improvements to operational and

testing methods• The Department has no mandate to take any action against a Testing Centre

that does not comply. The mandate rests with MEC’s.

6.7 Internal control weaknesses:• Payments advices were not post-checked – a register is now signed to

indicate that batches have been checked• An employee took leave consistently without submitting leave forms –

disciplinary action is being taken against the employee• Control measures were put in place to ensure that new appointments of staff

are done according to prescripts• Foreign travel claims were submitted late and many advances remained

outstanding - new procedures were implemented that substantially reduced the need to submit claims for daily allowances and reduced outstanding advances 46

Department


6.7 Internal control weaknesses: (continued)• Former employees are now removed from the BAS system to avoid

payments to ex employees• Staff did not obtain quotations for meals (after hours work) – new

procedures implemented to avoid irregular expenditure• An error was detected on a share certificate of a public entity and steps were

taken to have the error corrected• The Director-General’s employee contract was signed subsequent to the

finalisation of the audit• Irregular, fruitless and wasteful expenditure was incurred due to non

adherence to existing controls and procedures – legal opinions are obtained and where possible, disciplinary steps are taken

• High risk weaknesses in general controls surrounding Information Technology were responded to at the date of the report as follows:

• The Information technology policy is under review to incorporate the outstanding issues. Physical security issues are included in the security policy under development

• Network security procedures are under review• The Security Policy and the Contingency Policy documents are in the

process of approval47

Department


• Major weaknesses in general controls surrounding Information Technology were addressed at the date of the report as follows: (continued)

• The Disaster Recovery Plan is under review• A proposal for the review of the Master Systems Plan has been

presented for approval• Change Control procedures are being developed• Upgrade of the computer room is underway to improve physical controls

and security• Documentation of network monitoring procedures has been initiated

48

Financial OverviewDepartment

of Transport

49

Department

of Transport Financial Overview

Overview of expenditure against budget R’000

Budget allocation 7 602 159

Rollovers 39 934

Other adjustments 3 087 561

Total of Adjusted budget 10 729 654

Compensation of employees 96 852

Goods and Services 303 187

Financial transactions in assets and liabilities 1 357

Transfers and Subsidies 9 973 457

Expenditure on capital assets 23 688

Total expenditure 10 398 541

Under spent against budget 331 11350

Department

of Transport Under Expenditure

Details of major amounts under spent Progr. R’000

Under spent:

Taxi process - delays in finalising safety specifications and conversion of operating licenses

6 232 500

Transport planning projects 4 20 304

Freight Logistics projects 5 7 350

Policy development projects 2 6 199

Monitoring of public transport subsidies 6 4 137

Safety promotion, rail and road transport regulation projetcs 3 3 418

Projects underway and requested as rollovers:

Transfers to Centres of Development 1 3 000

Development of a Maritime policy 2 1 600

Launch of the Transport BEE Charter 2 520

Development of law enforcement qualifications 3 984

Design and implementation of the Rail Economic Regulator 3 2 200

Late invoice for oil pollution prevention services 3 3 300

Late invoice for search and rescue services 3 608

Final claim not yet paid for the restructuring of ACSA 3 1 42451

Department

of Transport Under Expenditure (continued)

Details of major amounts under spent Progr. R’000

Projects underway and requested as rollovers (continued):

Tenders awarded for a feasibility study on a Planning Support Centre, assessment of selected ITP’s, and updating of the NLTTA

4 1 300

Feasibility study on integrated rural mobility access project was completed late and phase 1 could not be completed

4 7 700

Project could not be completed for construction of infrastructure through use of extensive labour force

4 1 200

Design of new Non Motorised Transport technologies completed but construction of prototypes not completed

4 2 000

Pilot project for new eThekwini Transport Authority not completed 4 2 100

Development and standardisation of bus subsidy monitoring systems 4 2 000

Review of bus contracts 4 3 200

Development of standard systems and models for the devolution of bus subsidies to other spheres of Government

4 1 300

Savings: Mainly Goods and Services across Responsibilities 1 6 232

Over budgeted: Foreign memberships 3 1 400

Vacant posts that could not be filled during the year 5 15 137

Total 331 113 52

Department

of Transport Reprioritisation after Adjusted Budget

Details R’000

The Department retained the budget for the NaTIS system by shifting the budget back to the Department from the transfer payment to the Road Traffic Management Corporation

23 100

An additional R 3 million was made available for the Centres of Development to develop and promote formal qualifications for the transport sector

3 000

R 10 million was shifted to capital expenditure for the acquisition of special purpose vehicles for special overloading control purposes

10 000

53

Department

of Transport

Thank you

54

department of transport portfolio committee: department of transport annual report 2006 18 october...

Documents

transporttransport policy

transport2transport

southern south african

security clearance

various transport stakeholders

statistics south africa

various provinces

various indicators