RTSA deposited K1.4m speed fines in illegal bank account, reveals AG

The latest Auditor General’s Report has revealed that the Road Transport and Safety Agency (RTSA) deposited over K1.4 million collected from speeding motorists into an unauthorised ‘private’ bank account, where part of it went missing before it was deposited into a government Escrow account, following an inquiry.

The Auditor General also revealed that the said unauthorised account belonged to “Pay Now Zambia Ltd” which had been active since May, 2016, before the IMS contract with RTSA was signed, further explaining that this was contrary to Financial Regulation No. 140 (1), which states that “under no circumstances shall public money be credited to a private bank account or used for personal purposes”.

And the Report has disclosed that about 1,000 registered vehicles have no matching records at RTSA, while some vehicles captured as saloons by the Intelligence Mobility Solutions (IMS) records were actually appearing as trucks on the RTSA vehicle registration system under ZAMTIS.

On November 21, 2017, Dr Brian Mushimba who served as Minister of Transport at the time told Parliament, through a ministerial statement, that IMS had submitted an unsolicited bid and won a contract to install speed cameras through a concession agreement with RTSA that would enable the private company generate revenue on behalf of government from erring motorists.

He added that 85 per cent of the revenue collected from the “Advanced Road Traffic Management” project, which included toll plazas would go to government leaving the concessionaire to retain 15 per cent over a period of 17 years.

“Mr Speaker, recognising the fact that Government has a lot of fiscal competing needs, many times it is necessary that alternate financing options be considered including inviting private sector participation. In this case, not only were we looking for a technology provider but also funding to implement an advanced traffic management system. Therefore, the best option for the Government at this juncture was to use a Public Private Partnership (PPP) model in this contract,” Dr Mushimba said in November 2017.

“The concessionaire will recover his cost over the course of the seventeen year project duration through receipts of a portion pegged at 15 per cent on the value added services. Eighty-five per cent of these collections will be remitted to the Zambian Government Treasury. This will result in better fine collections as all violations will be recorded and documented. An electronic fine control will be used by both RTSA and the police department for better control of all raised fines and collection processes.”

But according to the Report of the Auditor General on the Accounts of the Republic for the financial year ended December 31, 2018, over K1,484,707 million of the money collected from speed fines under the agreement was deposited into an ‘illegal’ account which is not one of the 16 approved Ministry of Finance Treasury accounts.

“During the period August to December, 2018, amounts totalling K1,484,707 involving 4,956 transactions collected from speed fines through the paymyfines.co.zm website were deposited into a bank account, which was not among the 16 accounts approved by the Ministry of Finance. This was contrary to Financial Regulation No. 140 (1), which states that under no circumstances shall public money be credited to a private bank account or used for personal purposes,” the Auditor General reported.

“A further scrutiny revealed that the bank account where the money was deposited belonged to “Pay Now Zambia Ltd” and had been active since May, 2016, before the IMS contract was signed. Consequently, it was not clear why management had allowed public funds to be deposited into an account not approved by Ministry of Finance.”

The Auditor General disclosed that RTSA was sweeping funds collected from motorists through an illegal online payment system through a private bank account, deposited it into another unauthorised bank account before it was sent to Control 99, a process which resulted into unaccounted for funds.

“It was also observed that the Agency was sweeping all funds that were collected from the online payment platforms, not authorised by the Ministry of Finance, from one commercial bank account to another then to Control 99. As at 31st December, 2018, the IMS had collected K1,441,266 from speed fines through the unapproved bank account. Of the K1,441,266 that was collected through the unapproved bank account, K1,358,299 was traced resulting in unaccounted funds in amounts totalling K82,967,” the Auditor General revealed.

In his response dated 20th September, 2019, the Controlling Officer stated that the unaccounted-for funds had since been traced to the Zanaco MoF Escrow revenue transit account, but the Auditor General, however, observed that the “K82,967 traced to the Zanaco MoF Escrow revenue transit account was transferred from another bank account, which was not among the approved bank accounts from the Ministry of Finance.”

In December 2018, a News Diggers investigation revealed that an addendum had been made to the RTSA, IMS concession agreement, allowing the private company to take 90 per cent of proceeds, leaving government with only 10 per cent so that the Concessionaire could speed up its retain on investment in the first seven years.

“Subject to the foregoing provisions of this agreement, all user charges owing by users of the project facilities and for the provision of services rendered by the Concessionaire under this Agreement, including fines shall accrue to the Government; and the Concessionaire shall invoice the Agency for the equipment and services provided under the project,” read the second addendum to the concession agreement in part.

“The Agency shall pay the Concessionaire monthly service charges equal to: year 1 to year 7, 90 per cent of the revenue collected; year 8 to year 12, 80 percent of the revenue collected; year 13 to year 17, 70 percent of the revenue collected from fines, vehicle inspection fees and vehicle registration fees. From fines generated by the system excluding speeding fines, the Agency shall pay the Concessionaire 20 per cent of revenue collected in year 1 to year 17, and 10 per cent of revenue collected from cross border violations.”

The concession agreement, however, resulted in operational challenges and revenue-sharing squabble as IMS complained that (after the Ministry of Finance has seized control of the revenue collection), the agreed service charges were not being paid to the Concessionaire.

In the latest report, the Auditor General further disclosed that over 1,000 vehicles on the IMS car records data base were not matching with records on the RTSA ZAMTIS platform, adding that 94 vehicles were not registered at all, despite having registration numbers.

“According to the Road Traffic Act No. 11 of 2002, RTSA is required to register all vehicles and trailers and the Act also requires RTSA to maintain a register of all the motor vehicles that have been registered. A review of the IMS infringement history report revealed that 1,016 vehicles that were captured by the speed cameras for speeding had different details from the records that were maintained on the RTSA systems (ZAMTIS and e– ZAMTIS),” stated the Auditor General.

“For example, some vehicles captured on the IMS records appeared as saloons whereas on e-ZAMTIS they appeared as trucks. A further scrutiny revealed that 94 vehicles were actually not even on the RTSA registered motor vehicle database although they had Zambian registration numbers,” Stated the Auditor General.

In his response, the RTSA Chief Executive Officer indicated that the anomalies were attributed to the high level of motor vehicle number plate cloning and new vehicle owners not updating records, such as change of ownership and change of colour, among others.

Meanwhile the Auditor General also revealed that over K248,000 cash was not accounted for at RTSA’s Ridgeway Station.

But RTSA management claimed in the Report that the missing cash was as result of a burglary, which took place at the Ridgeway Station where the funds and other valuables were stolen.

“During the period under review, the Agency had cash and other valuables in amounts totalling K248,283 not accounted for. In response, management claimed that on 28th December, 2018, a burglary took place at the Ridgeway Station in which cash and other valuables in amounts totalling K248,283 were stolen. As at 20th September, 2019, the Police had not concluded their investigations into the matter,” revealed the Auditor General.

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tom muumba
tom muumba

it would be nice for the minister to tell the nation what the cost of the system as well as cost of operating and maintaining it is. common sense tells me its possible for government to procure the equipment and contract the private sector to manage at a minimal fee, if we can afford a state of the art jet for one non-performing country CEO and his team, we can afford to invest in this system, at least it would pay for itself…..PPP is not meant to stop people in government from thinking! if its cheaper for Government to undertake… Read more »

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