1. RTIA - Justice in Adjudication Road Traffic Infringement Agency Annual Report Presentation to the Portfolio Committee on Transport Thursday 10 October 2013 By Japh Chuwe Registrar

2. RTIA - Justice in Adjudication Contents PART I:Strategic Objectives Strategic Objectives Performance Summary on Strategic Objectives PART II:Performance review: 2012/13 Period Background Corporate governance: internal system of control Human resource overview Infringements Report: Issuing Authority Performance Adjudications Performance Financial Performance Challenges Highlights & Achievements PART III: Annual financial statements PART IV: Audit outcomes PART V: Conclusion

3. RTIA - Justice in Adjudication PART I: Strategic Objectives PART I: Strategic Objectives

4. RTIA - Justice in Adjudication Strategic Objectives SO 1: Increase the Agency’s revenue share from outstanding road traffic infringement penalties SO 2: Implementation of effective governance processes to achieve an unqualified opinion SO 3: Implementation of AARTO communication campaigns SO 4: Implementation of effective adjudication processes SO 5: Comprehensive legislative review SO 6: Full transfer of AARTO functions to the RTIA

5. RTIA - Justice in Adjudication Performance Summary on Strategic Objectives No. Strategic objectivePerformanceReason/Constraints 1Increase the Agency revenue share from outstanding road traffic infringement penalties Achieved Projected budget – R50 m Collected – R49 m Increased from R28.5 m previous year (2011/12) Non-rollout of AARTO Extended delay in mandate enforcement 2Implement effective governance processes to achieve an unqualified opinion Achieved (Unqualified opinion for the 2011/12 period) Another unqualified opinion for the 2012/13 period None 3Implement AARTO communication campaigns Partly achieved Communication & educational materials distributed through partnerships with DoT & agencies Reactive public communication Lack of funding limited audience target reach

6. RTIA - Justice in Adjudication Performance Summary on Strategic Objectives No. Strategic objectivePerformanceReason/Constraints 4Implement effective adjudications processes Achieved Backlog representations eliminated Adjudications framework updated 100% adjudicated within timeframes 35,552 representations received 34,869 representations were adjudicated. A balance of 683 representations carried over to the 1 st quarter of 2013/14 financial year. None 5Comprehensive legislative review process Achieved Draft Amendment Bill published for comments in Gazette 36173 dated 20 February 2013 Draft Regulations Amendments intensively discussed with stakeholders None

7. RTIA - Justice in Adjudication Performance Summary on Strategic Objectives No. Strategic objectivePerformanceReason/Constraints 6Full transfer of the AARTO functions to the RTIA Not Achieved AARTO Bank accounts not transferred RTIA not in control of all functions and accounts RTIA and IAs not receiving their revenue portion timeously Ineffective dispense of mandate, especially revenue collection from IAs RTMC lodged objection on the transfer of AARTO functions and accounts to RTIA Delayed process of transfer Note: This objective has subsequently been achieved and is recognised as a significant event in the current financial year. The transfer of the functions and accounts will be achieved with effect from 1 October 2013

8. RTIA - Justice in Adjudication PART II: Performance review 2012/13 Period

9. RTIA - Justice in Adjudication Background The Agency started the year with a staff of 22 and increased its complement by 16 (72%) to a total of 38 A government grant of R5m was allocated, with an additional virement of R14m towards the end of the financial year The board continued operating, albeit stretched due to limited number of members, exacerbated by 1 resignation Management continued to be overly stretched due to insufficient staff compliment

10. RTIA - Justice in Adjudication Corporate governance: Internal system of control The Agency committed to implementing processes and systems for ensuring compliance to governance prescripts in the AARTO Act and PFMA Implemented pro-active measures to address deficiencies and review progress on quarterly basis Imbedded audit and verification measures in the business process, in the absence of an internal audit unit

11. RTIA - Justice in Adjudication Human resource overview Increased staff compliment from 22 to 38 by end of the financial period (16, being 72% but less by 37 being 49% compared to approved target of 75) 2 managers transferred from RTMC 8 staff appointed for data clean-up of the NCR ROs increased to 8

12. RTIA - Justice in Adjudication Human resource overview : Staff Profile

13. RTIA - Justice in Adjudication Infringements report : Issuing Authority performance

14. RTIA - Justice in Adjudication Infringements report : Issuing Authority performance

15. RTIA - Justice in Adjudication Infringements report : Issuing Authority performance Number of infringement notices captured in comparison with previous year

16. RTIA - Justice in Adjudication Infringements report : Issuing Authority performance Number of notices captured per category

17. RTIA - Justice in Adjudication Infringements report : Issuing Authority performance Number of infringement notices per category captured in comparison with previous year

18. RTIA - Justice in Adjudication Infringements report : Issuing Authority performance

19. 19 Infringements report : Issuing Authority performance

20. RTIA - Justice in Adjudication Infringements report : Issuing Authority performance

21. RTIA - Justice in Adjudication Infringements report : Issuing Authority performance

22. RTIA - Justice in Adjudication Infringements report : Issuing Authority performance

23. RTIA - Justice in Adjudication Infringements report : Issuing Authority performance

24. RTIA - Justice in Adjudication Infringements report : Issuing Authority performance

25. RTIA - Justice in Adjudication Analysis of infringement performance Johannesburg accounts for 73.7% of captured infringements Tshwane accounts for 22.6% of captured infringements Gauteng Community Safety accounts for 2.1% of captured infringements RTMC accounts for 1.6% of captured infringements AARTO 01 (handwritten) infringements account for 24% of all notices AARTO 03 (speed) infringements account for 58% of all notices AARTO 31 (parking) infringements account for 18% of all notices

26. RTIA - Justice in Adjudication Other Selective Options – Court option

27. RTIA - Justice in Adjudication Other Selective Options – Court option

28. RTIA - Justice in Adjudication Other Selective Options - Representations

29. RTIA - Justice in Adjudication Other Selective Options - Representations

30. RTIA - Justice in Adjudication Adjudications performance

31. RTIA - Justice in Adjudication Adjudications performance

32. RTIA - Justice in Adjudication Adjudications performance Number of Representations adjudicated in comparison with previous year

33. RTIA - Justice in Adjudication Adjudications performance

34. RTIA - Justice in Adjudication Adjudications performance

35. RTIA - Justice in Adjudication Adjudications performance

36. RTIA - Justice in Adjudication Adjudications performance

37. RTIA - Justice in Adjudication Agency notices: Courtesy letters

38. RTIA - Justice in Adjudication Agency notices: Enforcement Orders

39. RTIA - Justice in Adjudication Agency notices : Others

40. RTIA - Justice in Adjudication Financial performance : Payments made  Payments made within 1 st phase (<32 days) whilst the infringement was still in the discounted stage. Infringer pays 50% which all goes to issuing authorities.  Payments made in 2 nd phase (between 33 and 64 days). IA’s receive 50% and RTIA 50% (discount now forfeited)  Payments made in 3 rd phase (after 64 days). IA’s receive 50% and RTIA 50% Payment Time Frames

41. RTIA - Justice in Adjudication Financial performance : Number of Payments made

42. RTIA - Justice in Adjudication Financial performance : Value of Payments made

43. RTIA - Justice in Adjudication Financial performance : Payments made Number of total infringement notices paid in comparison with previous year

44. RTIA - Justice in Adjudication Financial performance :

45. RTIA - Justice in Adjudication Financial performance : Monthly % payments made The higher payments during June & July was due to the serving of Enforcement Orders

46. RTIA - Justice in Adjudication Financial performance : % payments made

47. RTIA - Justice in Adjudication Challenges Legislative inefficiencies Inadequate funding - IT infrastructure - Staffing - Limited communication & education Mandate conflicts on institutional arrangements Governance (insufficient board membership)

48. RTIA - Justice in Adjudication Highlights & achievements Audit Performance - 2 nd consecutive unqualified opinion Legislative amendments - Amendment Bill published for comment in Gazette 36173 dated 20 February 2013 Institutional capacitation - cautious & strategic recruitment - establishment of internal audit, IT & debt collection units Marketing & education - leveraged on the DoT and other entities for communications

49. RTIA - Justice in Adjudication PART III: Annual financial statements PART III: Annual Financial Statements

50. RTIA - Justice in Adjudication Highlights: Financial Performance 2012/132011/12 Revenue 68 011 052 45 579 863 Infringement fees 49 011 052 28 579 863 Grant received 19 000 000 17 000 000 Expenses (61 408 113) (34 467 653) Impairment loss on receivables (31 164 022) Employment costs(10 538 186) (2 259 932) Other operating expenses (19 451 088) (32 058 909) Depreciation of property, plant and equipment (225 103) (105 719) Amortisation of intangible assets (22 819) (16 298) Assets written off (6 894) (26 795) Surplus from operations 6 602 939 11 112 210

51. RTIA - Justice in Adjudication Highlights: Financial Position 2013/122012/11 Assets Non- Current Assets 643 257 750 779 Property, plant and equipment 608 934 693 637 Intangible asset 34 323 57 142 Current assets 14 631 608 6 850 327 Trade and other receivables 1 428 816 6 850 281 Cash and cash equivalents 13 202 792 46 Total Assets 15 274 865 7 601 106

52. RTIA - Justice in Adjudication Highlights: Financial Position 2013/122012/11 Net Assets 12 890 676 6 280 802 Accumulated surplus / (deficit) 12 890 676 6 280 802 Current liabilities 2 384 189 1 320 304 Trade and other payables 2 384 189 1 320 304 Total net assets and liabilities 15 274 866 7 601 106

53. RTIA - Justice in Adjudication Financial Performance 2012/13 Revenue earned increased significantly by 71% from R28.5 million to R49 million. The year’s overall performance was significantly lower than expected due to the impairment of debtors of R31 million. Without the impairment the net surplus would have been 240% above last year’s performance of R11.1 million. Staff costs have increased significantly as the Agency skills up with the best of breed employees that will see it into its next phase of National roll-out. The agency was in a much stronger net asset position as at year end with total assets exceeding liabilities 6.4 times.

54. RTIA - Justice in Adjudication PART IV: Audit Outcomes PART IV: Audit Outcomes

55. RTIA - Justice in Adjudication Improved Audit Performance The Agency achieved an unqualified audit opinion with an emphasis of matter paragraph in 2012/2013 for the second time in a row. The number of findings also decreased from the previous year as a result of management's commitment to compliant reporting.

56. RTIA - Justice in Adjudication Audit outcomes Audit opinionBasis of opinion Unqualified audit opinion The financial statements present fairly, in all material respects, the financial position of the Road Traffic Infringement Agency as at 31 March 2013, and its financial performance and cash flows for the year then ended, in accordance with SA Standards of GRAP and the PFMA. Emphasis of matter Material impairment As disclosed in note 5 to the financial statements, a material impairment to the amount of R31 164 022 was incurred as a result of the assessment made on the cash recoverability of the accounts receivable relating to the AARTO management process.

57. RTIA - Justice in Adjudication Audit outcomes Report on other legal & regulatory requirements Predetermined objectives Some objectives, performance indicators and targets not consistent with approved annual performance agreement and not approved by the executive authority. Achievement of planned targets 33% of total planned targets were not achieved during the year under review. This was mainly due to the fact that indicators and targets were not suitably developed during the strategic planning process. Courtesy and Enforcement letters not issued The agency did not issue and serve any courtesy and enforcement letters to traffic infringers for the period September 2012 to March 2013 in contravention of the AARTO Act. Material misstatements Material misstatements identified by the AGSA were subsequently corrected.

58. RTIA - Justice in Adjudication Audit Certification Audit committee in place and fully operational during the period under review AG invited and participated in meetings Reviewed the effectiveness of internal control systems Reviewed compliance to legal & regulatory provisions, particularly to the AARTO Act & PFMA Reviewed and adopted a risk management framework

59. RTIA - Justice in Adjudication Audit Certification Adopted a going concern premise for the Agency Reviewed & discussed the AG’s management letter Reviewed & discussed the AFS & the AG’s report & audit opinion Reviewed the appropriateness of accounting policies & practises Reviewed significant adjustments resulting from the audit Satisfied with the Annual Report & recommended Board approval

60. RTIA - Justice in Adjudication PART VIII: Conclusion PART V: Conclusion

61. RTIA - Justice in Adjudication Conclusion In spite of the difficulties experienced, the Agency is fully committed to the achievement of its mandate and believes it will soon be one of the most effective performers under the Department!

62. RTIA - Justice in Adjudication Conclusion Thank you!