1. 1 PRESENTATION TO THE PORTFOLIO COMMITTEE ON PUBLIC SERVICE AND ADMINISTRATION Report on the management of the Subsidized Motor Transport Scheme 10 November 2004

2. 2 INTRODUCTION  The purpose of the Subsidized Motor Transport Scheme (SMTS) is to enable officials to undertake approved journeys in those cases where other transport is not practical and/or economical.  Need for investigation: PSC became aware of allegations of subsidized vehicles being granted to employees as a result of their ranks rather than them meeting the qualifying requirements.  Furthermore, although the SMTS is regulated by the Subsidized Motor Transport Policy, no provision is made in the Policy for monitoring and evaluation mechanisms.

3. 3 OBJECTIVE OF THE INVESTIGATION It was the intention to establish –  whether qualifying criteria and allocation requirements set by the NDoT are adhered to;  whether control measures are in place to ensure the effective management of the Scheme;  constraints experienced with the SMTS;  the financial implications of the SMTS; and  the availability of management information.

4. 4 METHODOLOGY  Scope of the investigation: 22 departments participated in the investigation.  Sources of information: - Interviews with transport officers - Inspection of transport files - PERSAL (financial expenditure) - Service providers – Wesbank First Auto (financing the SMTS). Fleet Africa/Auto Fleet Services (maintenance of vehicles and administration of logsheets).

5. 5 TOTAL NUMBER OF PARTICIPANTS IN THE SMTS  Eastern Cape – 579  Free State – 772  Gauteng – 464  Kwazulu-Natal – 1 572  Mpumalanga – 1 303  Nort West – 1 170  Northern Cape – 193  Limpopo – 1 687  Western Cape – 252  National departments – 2 018

6. 6 FINANCIAL IMPLICATIONS  Expenditure, including the payment of capital remuneration, maintenance & fuel allowances incurred by the State, amounted to the following: R81 million - 1999/2000 financial year R122 million - 2000/2001 financial year R213 million - 2001/2002 financial year  In addition, the following insurance premiums were paid: R32 million - 1999/2000 financial year R30 million - 2000/2001 financial year R42 million - 2001/2002 financial year

7. 7 PARTICIPATION IN THE SMTS  Role players involved in the process of approval to participate in the SMTS include advisory committees and risk management committees.  Issues taken into account when evaluating an application to participate in the SMTS include the reasons motivated in the Z 81 application form, budgetary constraints and the reason(s) for the termination of a previous contract.  Most departments have their own departmental policy/procedure manual, in addition to the national Policy issued by the NDoT.

8. 8 MECHANISMS IN PLACE TO CONTROL PARTICIPATION IN THE SMTS  Distances traveled is controlled by the keeping of logbooks & completing logsheets (form Z 79).  Role and responsibility of line managers: Approving official journeys & verifying official kilometers traveled.  Vehicles are inspected to determine if the contracted kilometers have been traveled.  Individual contracts are amended & renegotiated due to deviation from the official kilometer distances initially contracted.  Records are kept of drivers’ licenses and ID documents, individual contracts, logsheets, trip authorization forms, etc.

9. 9 USE OF INFORMATION FOR MANAGEMENT PURPOSES  PERSAL is the only computerized system utilized to administer the SMTS, including payments made.  Information pertaining to numerous issues with regard to the management of the SMTS is available on PERSAL. However, officials were uninformed about such information available on PERSAL.  Information needs, such as accurate information, the decentralization of PERSAL to all provincial departments, more training on the utilization of PERSAL, etc. were identified by transport officers.

10. 10 CONSTRAINTS IN THE ADMIN & MANAGEMENT OF THE SMTS  The awarding of subsidized vehicles to officials who do not qualify: - vehicles awarded due to ranks - work circumstances not taken into account  Incorrect logsheet information & claim problems: - not informed of tariff amendments - fuel claims take too long to be paid out  Inadequate record keeping – records not regularly updated.  Misuse of subsidized vehicles for private purposes & not properly maintained.

11. 11 CONSTRAINTS (continued)  Policy related problems: - policy too often amended - policy not user-friendly & difficult to interpret  Maintenance and insurance related problems: - services not always up to standard - no change of driver allowed  Problems with the delivery of vehicles as well as the choice of vehicles available on National Contract RT 77. - delivery takes too long - choice of vehicles limited

12. 12 RECOMMENDATIONS  Provisioning of effective/efficient resources: - training & staffing - Internet & e-mail facilities to be installed  Advisory committees to be established, as required by the Policy  Tariff related recommendations: - tariff adjustments to be announced in advance - revised fuel tariffs to be applicable when towing  Amendment of the policy for the SMTS: - standardize payments on insurance claims - provisions for replacement of tyres to be revised

13. 13 RECOMMENDATIONS (continued)  Keeping participants in the SMTS informed at all times of the rules & prescripts.  Electronic processing of claims - training to be provided in this regard.  Revision of National Contract RT 77 to allow for a bigger choice of vehicles.  Enhanced record keeping of information - record also to be kept of: - cases of driver misuse - termination of contracts/disposal of vehicles - results of vehicle inspections

14. 14 CONCLUSION  The SMTS is in general administered and managed in an effective & efficient manner.  However, certain problem areas & needs were identified during the investigation.  In order to manage the SMTS in a cost effective & efficient manner, departments should use the recommendations provided in this report by adapting them to suite their unique needs and circumstances.