Auditor-General Cracks Down on Road Traffic Infringement Agency for Inadequate Internal Controls

In a recent disclosure to Parliament, the Auditor-General of South Africa, Tsakani Maluleke, illuminated serious lapses in the financial management of the Road Traffic Infringement Agency (RTIA). According to the agency’s annual report for the 2022–23 financial year, the RTIA has drawn a qualified audit opinion, primarily due to its failure to enforce internal controls aligned with established policies and national legislation.

A specific area of concern raised by Maluleke was the Agency's inability to appropriately account for the Administrative Adjudication of Road Traffic Offences (Aarto) liabilities—essentially unallocated receipts—which in the current and prior year totalled millions of rands. The notorious status of the RTIA's accounting records left the Auditor-General without the requisite evidence to confirm whether adjustments were needed to the records presented.

Furthermore, Maluleke underscored issues of non-compliance with the Standard of Generally Recognised Accounting Practice. In her findings, it was evident that the RTIA had failed to acknowledge or account for amounts meeting the established definition of a liability.

The internal controls seemingly were either insufficiently designed or utterly disregarded. Schedules and listings that would support Aarto liabilities were riddled with discrepancies, undermining the reliability of the reported information. This inattention to detail extended to processes surrounding the preparation, examination, and approval of annual financial statements, which lacked the robustness required to detect and correct material errors in a timely fashion.

Adding to the financial disarray was the disregard for an effective record management system—something essential for managing consequences and deterring non-compliance with regulations, laws, and internal policies.

Maluleke reported that the RTIA incurred irregular expenditures amounting to R5,796,262 due to deviation from proper procurement procedures. The agency had not taken effective measures to circumvent fruitless and wasteful expenditure, which predominantly stemmed from incurred penalties. Indeed, there was no conclusive evidence of disciplinary steps taken against officials who triggered irregular expenditure, as records to back the investigations were neither proper nor complete.

The indictment extended to the overall preparation of financial statements, which were not congruent with the prescribed financial framework nor backed by full and thorough records, thus violating the Public Finance Management Act (PFMA).

Despite these QA challenges, RTIA registrar Matsemela Moloi reflected a hopeful stance on the agency's progress, citing a perceived stability and a decrease in reported instances of financial misconduct. Nonetheless, Moloi acknowledged the qualified audit opinion's impact stemming from unresolved historical matters associated with Aarto.

Moloi indicated that the conclusion of consequence management against officials responsible for irregular expenditure remains in a holding pattern pending appeal processes at the Commission for Conciliation, Mediation and Arbitration.

In light of this scrutiny and as part of its rectification efforts, the RTIA has undertaken a thorough review of all organisational policies and standard operating procedures, in hopes of underpinning compliance moving forward. Emphasizing this commitment to improvement, Moloi also noted the establishment of a social ethics committee aimed at proactively tackling instances of non-conformance and addressing the audit findings from the previous financial year.

With these measures in place, the RTIA aims to restore its integrity and comply with South Africa's stringent financial governance standards, ultimately providing a more accountable and transparent service to the country's road users.