Post Office contributes to R3bn licensing fraud loss

The SA Post Office has contributed to the more than R3 billion loss to the fiscus, resulting from the fraudulent issue of vehicle licence discs.

Road Traffic Management Corporation (RTMC) CEO Advocate Makhosini Msibi said on Monday it had investigated the origin of the issuance of fraudulent licence discs, which has been compounded by the closure of certain post office branches.

Msibi said these closures were not reported timeously and criminals had seized the vehicle licencing equipment that was used by the post offices and are using it to fraudulently issue vehicle licence discs.

He said 820 cases are currently being investigated related to the fraudulent issue of vehicle licence discs, driving licences, learner driving licences, roadworthy certificates and “fees dumping”.

“Of the 820 cases that we are seized with, we have made arrests together with the Hawks of 116 people, excluding the seven people arrested three weeks ago for fraud of R60 million at the Mpumalanga DLTCs [driving licence test centres],” he said at a briefing on the findings of Special Investigating Unit (SIU) and RTMC investigations.

Warrants

Msibi said there are also impending warrants that the RTMC is working jointly on with the Hawks, Asset Forfeiture Unit (AFU) and National Prosecuting Authority (NPA).

He confirmed Gauteng is the first priority in regard to the fraudulent issue of vehicle licence discs “to the tune of R1.2 billion”, with R800 million lost in Mpumalanga and R600 million in the Free State.

Transport Minister Fikile Mbalula said the SIU was mandated in 2017 through a proclamation signed by President Cyril Ramaphosa to investigate certain vehicle registration, licensing, testing and licence issuing problems and the entering of, tampering with, or manipulation of data or information on the electronic National Traffic Information System (eNaTIS).

Actions

Mbalula said the SIU has since presented an interim report identifying a number of administrative actions that should be taken by various authorities and has until 31 March 2023 to complete the investigations and table a final report.

He said concerns that gave rise to the investigation relate to, among others, officials at DLTCs collaborating with driving schools on the issuing of learners’ and driving licences.

Mbalula said the work of the SIU has resulted in:

• 99 acknowledgements of debt signed to the value of R45.72 million, with R3.84 million in cash already recovered;
• R52.79 million in cash recovered through the seizure of 375 illegally imported vehicles in the Eastern Cape;
• Referral of 190 190 driving licences to relevant MECs for cancellation;
• Referral to eNaTIS of 190 173 driving licences issued to persons who have since died for cancellation;
• Referral of 44 cases to the NPA for prosecution;
• Referral of 128 cases to various authorities for disciplinary, executive and/or administrative action; and
• 86 arrests for fraud and/or theft executed during joint operations by the RTMC, Hawks, Sars (South African Revenue Service) and the SIU.

Mbalula said these arrests in July comprised 36 vehicle testing examiners, 10 NaTIS officers, 26 DLTC officials, three SA Police Service (SAPS) members, four transport inspectors at provincial departments of transport, seven private individuals, and six officials for 10 000 illicit transactions that cost the state R60 million.

Methods uncovered

SIU head Advocate Andy Mothibi said the investigation has led to the uncovering of the criminal and corrupt methods used to infiltrate the system and it is now time for consequence management in all its forms to remove these people from the system.

He said the investigation uncovered a chain of corrupt activities at various licence issuing centres that included driving schools, the so-called runners, officials and willing participant citizens.

He said the SIU would like to “crack that criminal chain” and will be engaging with the RTMC about an intervention to end these criminal activities.

DoT interventions

Mbalula said the Department of Transport (DoT) has over the past year been working with MECs and the SA Local Government Association (Salga) to implement a number of interventions that are intended to address the root causes of these systemic and operational challenges.

“At the core of these interventions is a seamlessly integrated value chain guided by a single standard under the leadership of the RTMC. This would constitute a new service delivery model for all DLTCs in the country.

“Various measures have been implemented, which includes the introduction of online services and online payments, the rollout of smart enrolment units across all DLTCs, [and] the centralisation of the management of booking slots,” he said.

Mbalula added that the National Road Traffic Amendment Bill passed by the National Assembly on 27 September will address a number of areas covered by the SIU investigation.

This includes the regulation of driving schools that are “a law unto themselves”.

He said the SIU has identified the drivers of the systemic and operational challenges that gave rise to the corruption and malfeasance.

These include:

• The backlog and desperate need for driving licences, roadworthy certificates, and registration of vehicles is driving fraudulent conduct;
• Corrupt officials and criminal go-betweens exploit systemic weaknesses;
• Negligent and/or incompetent officials, some of whom who have access to the NaTIS system;
• Inadequate compliance monitoring by authorities;
• Lack of and/or weak management and oversight;
• Lack of standard operating procedures across national, provincial, local authorities and private institutions;
• Lack of memoranda of understanding with local authorities, DLTCs, private vehicles testing centres and private institutions;
• No agreed minimum performance standards for officials and/or employees;
• Legislative gaps;
• Money dumping – where traffic fines, SA National Roads Agency (Sanral) e-toll invoices, Aarto infringements and licence fees are ‘dumped’ on deceased persons records or persons with duplicate identifications in the form of a South African identity number or traffic register number; and
• Driving schools paying driving licence examiners to issue licences irregularly and/or fraudulently.

Problem ‘cannot be left to legislation’

Automobile Association (AA) spokesperson Layton Beard said it is good news that corrupt officials are being taken out of the mix and being dealt with, which shows this scourge in licensing departments is being addressed.

However, he said the AA is concerned that there are many facets within the current road traffic and management environment that require immediate and urgent attention.

These include increasing the number of approved, trained and professional traffic law enforcement officers, the number of officials at DLTCs, and traffic cameras that do not work and/or have been inoperative for more than 18 months in some areas.

“It cannot be left to legislation to sort out the problems on our roads,” said Beard.

Outa not convinced ‘interventions’ will help

Organisation Undoing Tax Abuse (Outa) CEO Wayne Duvenage said Outa values the fact the SIU has undertaken significant investigations to uncover and recover funds from manipulation of the various systems within the DoT.

However, he said Outa believes that more engagement with civil society will assist in uncovering and introducing interventions that will circumvent systemic manipulation and corruption.

Duvenage said the minister’s feedback is very reactive and does not set out proactive action and activities that will address many of the issues and the corruption.

He said the minister also implies that his department has substantive competence to overcome the many issues raised, but all experiences of the department interventions to date – such as online booking systems, an inaccurate NaTIS system and an inability to tackle corruption from within the booking system – suggest otherwise.

By Roy Cokayne

This article first appeared on Moneyweb, and was republished with permission. Read the original article here.