$47m lost at Road Traffic

As of Tuesday, May 10, 2016

By KHRISNA VIRGIL

Tribune Staff Reporter

kvirgil@tribunemedia.net

THE auditor general has warned of a severe lack of order and control surrounding safeguarding the assets and collection of revenue at the Road Traffic Department, while revealing an estimated $47m in losses from vehicle license revenue resulting from employees and motorists “circumventing rules and regulations”.

At a minimum, it is believed that there is an under recording of vehicle licence revenue of $10m due to management not having control over the licensing inventory.

In the audit of the department for the period July 1, 2012, to June 30, 2015, Auditor General Terrance Bastian said the department could not attest that correct revenue is being reported at the end of each fiscal year.

In probing operations of the department, Mr Bastian further highlighted several other instances of apparent fraud and “collusion” involving inspectors, writers and cashiers as they carried out daily tasks.

The revelations were unearthed in an audit report that was tabled yesterday in the House of Assembly. It focused on vehicle licence revenue, licence plate revenue and payroll processing.

“We observed through inquiries of management that the Road Traffic Department (RTD) did not maintain a register containing the registered number of all licensed motor vehicles,” the report said.

“Based on the requirements outlined in Section 5 of the (Road Traffic) Act, the RTD should be maintaining a register of the name and address of all registered owners, insured persons and insurers of licensees. We further noted that a listing of all active and inactive plates could not be produced for audit inspection.”

The report continued: “In order for the RTD to forecast revenue for motor vehicles, it would be essential for a register of information on the number of registered vehicles to be maintained. Due to RTD being in contravention of its Act in this regard, the determinable amount of revenue that would be due to the government in any given year is unknown.

“If a forecast would be performed based on the total number of licence plates produced and issued, approximately 374,000 plates, to the public as of June 30, 2015, one would estimate that the motor vehicle licence revenue should be at a minimum of $73m (374,000 x $195) instead of the reported average of $26m per annum.

“If the approximate number of 374,000 plates was reduced by 50 per cent there would still be an estimated loss of $10m as compared to the actual recorded revenue noted herein.”

The report also noted that when new licence plate inventory was looked at, the RTD was unable to provide auditors with a listing of all new licence plates generated and issued to the public during the years covered in the audit.

“Since it is indeterminate by the RTD as to the amount of new plates produced for all vehicles during the years under the audit, it would be suffice to say that from the production records of the Ministry of Public Works, there is an under recording in the new licence plate revenue line item of approximately $234,000.”

Fraud

There were numerous instances of what appeared to be fraudulent insurance certificates, Mr Bastian said in the report. This was especially seen on a particular insurance company’s letterhead in instances where the act was discovered. The report did not name the company.

“There is a noticeable lack of oversight in the licensing process. The behaviour being displayed by the staff of the RTD in circumventing rules and regulations is unacceptable. No licence should be issued to any person where the insurance certificate is not seen and/or retained on file for proper audit trail.”

“The Act definitively states in Section 23(1) that an invalid insurance certificate is an offence that is punishable by imprisonment and a fine. Invalid insurance certificates places an immense burden on the public as there is no immediate recourse in the event of accident. There seems to be a lack of monitoring by the appropriate staff,” the report said.

There was also a special investigation conducted into the issuance of a duplicated motor vehicle licence.

According to Mr Bastian’s report, the duplication occurred during the month of December 2014.

“It was noted that the original licence was issued at the Carmichael Road location on November 26, 2014 and the duplicated licence was issued at the head office location on December 2, 2014. It should be clarified that the duplicated licence contained the original licensee’s name, licence plate number, and expiration date.

“In speaking with the actual licensee and viewing the original issued licence we confirmed that the information presented on the original licence was duplicated. This situation was further exacerbated when the fraudulent licensee admitted to this malfeasance to the original owner in order to obtain an authentic licence in August 2015.

“During the investigation neither the original documentation nor the fraudulent documentation could be found in the cash batches provided for November 2014 and December 2014. However, it was noted in reviewing the system postings that the fraudulent licence was recorded using the original owner’s name and licence plate number on December 2, 2014.

“Since the duplicated licence was recorded in the system, we acknowledge that a licence was issued without the proper retention of the inspection certificate, prior year permit, and a copy of the insurance certificate.”

Mr Bastian said as this is in clear violation of the law, it is evident that “collusion” had to occur during the inspection, writing, and cashiering phases in the head office and Carmichael Road location to enable the issuance of this duplicated licence.

The inspectors, writers and cashiers who may be involved in this act of “gross negligence” should be made aware of the consequences of their actions as it pertains to the violation of the law, Mr Bastian said.

“Since this act was executed by willing participants in the RTD, it is obvious that the problem is not with the public alone, but with the RTD staff.”

It was strongly recommended that the persons complicit in this incident be removed with immediate effect and action be taken.

Payroll processing

In auditing the payroll process, Mr Bastian said it was observed that a salary payment in the amount of $358,750 was allowed to be processed and paid to a staff member during the month of January 2015.

He said this amount appeared to have circumvented all controls around payroll processing inside the RTD. It was noted that the Public Treasury issued a stop letter to the bank on January 26, 2015 and the paying bank remitted the overage of $355,220.83 to the Public Treasury via a draft dated January 28, 2015.

Upon requesting the supporting documentation for the remittance of the overpayment to the government, it took four months to receive the requested information, Mr Bastian said. It was further observed that there was no physical approval of the payroll during this pay period by the officer in charge as there was no documentary evidence to support the approval, the audit said.

“It is evident that there was a grave breakdown in the internal controls around payroll processing within the RTD. The operational risk associated with the over payment of the $355,220.83 is that the payment could have ultimately gone undetected not only within the government’s processing, but also within the bank’s processing.

“Responsibility, ownership and accountability appeared not to have permeated the accounting function as the evidence around the return of funds was not retained within the RTD to support this erroneous act.”

The audit also found that there were five employees who were making less than the annual minimum wage. Article 40 of the Bahamas Public Service Union Agreement states that the new salary increases for persons whose salary is under $10,700 should be $11,450 effective from September 2014.

Mr Bastian also put forward a recommendation that management of the RTD advance a plan for the department to be relocated to another building as soon as practicable.

This is due to observations on the building’s condition including a substance resembling mould in the ceiling, continuous overflows in the bathroom, inoperable faucets in the bathrooms, distinct odour emanating from the carpet and staircase railings that were not stable among other things.

Well_mudda_take_sic 7 years, 11 months ago

All of this fraud is happening right under the nose of Hanna-Martin.....this grossly incompetent MP should have been barred from holding any cabinet post many many years ago. The voters in her constituency need to wake up and understand that re-electing her time and time again has done absolutely nothing for their well-being. The people in her poor constituency who desperately need welfare and other social benefits are going without them because of all of the fraud and corruption happening right under the nose of Hanna-Martin that depletes and squanders vital financial resources needed elsewhere in our society by those truly in need of food, clothing, medicine and shelter. Career politicians like Hanna-Martin live the life of the political elite while leaving the rest of us living in abject misery! This is but one MP the voters need to reject outright in the next general election. The one with the short stubby grubby dirty sticky fingers remains at the very top of the list though, as does Christie himself!

John 7 years, 11 months ago

While Hard working Bahamians are being taxed to the bone and struggling Bahamian business are being taxed out of existence, this is what is happening to our tax dollars. Corruption everywhere, no accountability anywhere and while they live high on the 'hogg' the Average Bahamian barely has food on his table. Imagine that: one government agency accounting for one third of the revenue it is suppose to be collecting. Is it now time to sell your house and flee to the countryside?

sheeprunner12 7 years, 11 months ago

The FNM instituted several improvements to the Road Traffic back in its 1997-2002 term ...... nothing was done to improve that between 2002 and now ....... Hanna Martin has been the RTD Minister for 9 of those 14 years ...... why is she looking to pass the blame???? .... What has she done, beyond talking about these "new IT systems" that we are yet to see????

sheeprunner12 7 years, 11 months ago

........... but regardless of the lack of an IT system, it speaks to the lack of ethical and personal integrity among the RTD staff ....... that is a civil service problem (who hires those unethical thieving RTD employees???)

watcher 7 years, 11 months ago

(Who hires those unethical thieving RTD employees???)

All these corrupt practices and procedures are allowed by their unethical thieving bosses, who answer to the unethical, thieving Ministers, who sit in Cabinet with the unethical, thieving Prime Minister

BoopaDoop 7 years, 11 months ago

Amazing. We pay taxes and get nothing to show for it. $47 million disappeared in to thin air.

sheeprunner12 7 years, 11 months ago

That is how some civil servants and their families are able to live like millionaires without any investigation or scrutiny .......... but I agree with "watcher", it starts from the top .......... we run a slack country

SP 7 years, 11 months ago

Indeed!

Clamshell 7 years, 11 months ago

That is a stunning, staggering display of outright theft. Anybody want to guess how many people will go to jail? Anybody? Would anybody bet even 5 cents on any answer other than, "Nobody" ...?

sheeprunner12 7 years, 11 months ago

Why do we still base all of our Civil Service Laws and Internal Policing Regulations on a system that pre-dated Ministerial government (1964) ................. General Orders??????? ....... hmmmmmmmm

ThisIsOurs 7 years, 11 months ago

She is probably a very nice person, but after four years, the auditor general should not have been able to come to her with this report. She should have had a report to give him with all of the remediation plans and what was already implemented the minute he stepped in the door. Receipt books don't cut it.

37 million? To imagine the sheer scale of the transactions this must cover when a single car license won't exceed $500?????? She should have had this under control by year two otherwise she's at minimum ineffective at maximum incompetent.

If they knew there was a problem, there should have been strict control over sticker handling and distribution. Only a quota given out per day, a reconciliation conducted at the start and end of every day and everything else kept in a safe with strict access controls.

Honestman 7 years, 11 months ago

Hanna Martin has proven to be completely ineffective in her role. Time she was moved on but you know it won't happen.

SP 7 years, 11 months ago

........... Systemic corruption supported by 100% endemic political corruption ............

Non of this blatant corruption in RTD would be remotely possible without facilitators and incompetent leaders at the very top of the management and political chain.

Hanna-Martin should be held accountable and fired as transport minister, and independently investigated for collusion with others in the purposeful delay of tabling solutions for Bahamas to benefit for use of our air space worth millions annually.

If simply cannot take 4 years to draft an agreement for control of our air space, when every country has best practice agreements readily available to draw from!

Our country is controlled bow to stern by pirates who share the spoils of under the table deals.

Trusting Christie, Hanna-Martin and crew is not an option!

Reality_Check 7 years, 11 months ago

Mr. Terrance Bastian is the most effective Auditor General our country has had in decades and he is accomplishing much on a shoe string budget with very little resources being made available to him. The Bahamian people would be wise to insist our government quadruple Mr. Bastian's resources so that he can continue ferreting out the gaping bleeding holes in our country's revenue generating ability caused by wide spread systemic waste, fraud and corruption.

sheeprunner12 7 years, 11 months ago

No Bahamian politician or civil servant really want this AUDGEN Department to function effectively ..... it cramps their thieving fingers and their over-the-top lifestyles ............ this Dept. should expect a severe cut in June's 2016-17 Budget

sheeprunner12 7 years, 11 months ago

How many Class A,B,C, and D licensed vehicles are annually registered?????? 400,000???

How many active individual licenses are annually registered in the country????? 200,000???

What should be the expected RTD revenue each year???? .......... $100 million????

Soooooooooo, why is it that RTD say they only collecting about $30 million?????

What kind of voodoo economics is that????????? ........ every RTD employee's individual financial accounts should be audited until this money is found .......... this is outrageous!!!!!

jus2cents 7 years, 11 months ago

The government needs to privatise every department they can ASAP, starting with Bahamasair. Theft in all these and I'm sure more to come... Post office BEC Hospitals Social Security BAMSI NIB Passport Office Environmental Health

And who is next?

sheeprunner12 7 years, 11 months ago

.......... and do not forget the public schools where some principals are running million dollar plus turnover budgets ......... can you imagine what is going on there??????

SP 7 years, 11 months ago

The education system with the biggest budget is the fattest cow of the lot

Its no secret politicians, permanent secretary's, principles etc' have been hybrid-milking education and sharing the spoils for decades.

Money just disappears into thin air same as health and social services.

Massive pilferage on the grandest scale everywhere, as they tax us into oblivion and give Haitian parasites a free ride to boot!

jus2cents 7 years, 11 months ago

In any other country and this happened under your portfolio, you'd be forced to resign whilst investigation is taking place.

sheeprunner12 7 years, 11 months ago

The RTD Controllers and Chief Financial Officers for the years under review should be hauled before the Public Service Commission to answer for this ........... someone must account for some of this lost revenue ............ some heads should roll for this serious bumbling and malfeasance of our public funds ........ the PAC should insist on this one

OMG 7 years, 11 months ago

Sheeprunner, you are absolutely right. As a teacher in this country for 37 years Most Principles never submit accounts for school income or expenditure to the staff often saying it is non of their business. This is bull-- it as any monies collected from a tuck shop or school band is PUBLIC money and as such accounts should be given. Mind you whilst some departments languish for lack of supplies etc the Principles often use school funds for educational matters off the island.

Well_mudda_take_sic 7 years, 11 months ago

Senior representatives of The Bahamas Institute of Chartered Accountants (BICA) and the larger accounting firms should all be voicing their strong support for the Auditor General's Office to receive sufficient financial resources to hire additional trained and competent auditing and administrative personnel necessary to root out instances of massive waste, fraud and corruption wherever it may exist within our government departments and agencies, and government controlled corporations. I would highly recommend Mr. Bastian be allowed to focus his efforts on the Foundation Sean McQueeney and Franky Wilson (aka Snake) helped government set up to hold a 2% non-voting equity interest in BTC (formerly Batelco) and also on Bahamas Resolve, the government entity into which 13 delinquent loans made by Bank of The Bahamas (BoB) were transferred at grossly inflated values in order to try re-capitalize BoB. Where are the voices of support for Mr. Terrance Bastian from BICA and the larger accounting firms?

Economist 7 years, 11 months ago

Nothing from 'Birdie" in all this?

I am sure that Birdie can explain why, like "It wasn't explained clearly that they were not allowed to keep the money" or "They didn't know that they were stealing the money" or "They really meant to pay it back but things have been so tough that they haven't been able to pay it back."

Birdie, where are you to vindicate these thieves?

Reality_Check 7 years, 11 months ago

The Auditor General should have conducted an investigation into how many of Hanna-Martin's supporters who are registered voters in her constituency are employed by RTD and other government departments and agencies for which she has ministerial responsibility. This is one sleazy corrupt woman who learned her political trickery from her father. Were it not for A. D. Hanna's willingness to engage in nepotism to ply his daughter's way in politics, the Bahamian people would have been spared the costly consequences of Hanna-Martin's incompetence as a career politician. The only thing this potcake of a politician ever came equipped with is a loud mouth; she is well known to bark, yap and yelp ad nauseam whenever hit by a stone! Hanna-Martin and Leslie Miller have an awful lot in common in that regard. And they both have a serious deficit of grey matter upstairs!

sheeprunner12 7 years, 11 months ago

OUCH!!!!!!! ................ the old PLP oligarchy has created a lot of evil spawn

Stapedius 7 years, 11 months ago

Please stop making this a party politics issues. These b!t&es been tiefn under every government. A tief is a tief no matter who's in power. The reality is we need a reformed civil service. One which requires proper vetting and accountability. Sad part is for corruption to thrive we the citizens are supportive these illegal practices. Under the table deals for license and registration. It all boils down to poor system design. The thieves there issue registration to non road worthy vehicles and on the other end the police cruise on by when a light is busted or a car is emitting so much smoke that you can hardly see the road. So what is to be expected ? Corruption, slackness and people who love piracy.

John 7 years, 11 months ago

Why, when and how did they revert from licences being computer printed to hand written? is this to aid crookedness and corruption? Each year when you licence your vehicle(s) they give you forms to fill out saying. "so nexx year when you come you ainn gatta wait so long 'cause erryting gone be in the computer and we jes have ta print it out." Well das one dam' selfish computer 'cause it ainn' print out no licence yet.' At least not for me.

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