By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Road Traffic Department may be collecting as little as 36 per cent of due vehicle licensing revenues on New Providence, with system breakdowns “too numerous” for the Government’s financial watchdog to detail.

The Auditor-General, in another damning report on a government agency, found that based on the 374,000 vehicle licence plates issued on New Providence, the Department should be collecting at least $73 million in annual government revenues.

Yet the audit, which assessed the Road Traffic Department’s accounts for the three years to end-June 2015, found it was collecting “a reported average” of $26 million annually.

That amounts to a potential $47 million ‘discrepancy’, even with Terrance Bastian and his team applying the lowest annual licensing fee to all 374,000 plates - regardless of whether some motor vehicles should attract the higher rates.

Mr Bastian and his team were unwilling to conclude that the Road Traffic Department was collecting just over $1 out of every $3 vehicle licensing dollars due on New Providence, instead finding that this revenue stream was being “under recorded by a minimum of $10 million”.

“If the approximate number of 374,000 plates was reduced by 50 per cent, there would still be an estimated loss of $10 million as compared to the actual recorded revenue noted herein,” said the Auditor-General’s report, tabled in the House of Assembly yesterday.

“Due to the severe lack of order and control around the safeguarding of assets, collection of revenue and reporting of the same, the Road Traffic Department cannot attest that the correct revenue is being reported at the end of each fiscal year.

Mr Bastian and his team found that the Department was in breach of its own Road Traffic Act, which requires it by law to maintain a register of all licensed motor vehicles, their owners, insurers and persons insured to drive them.

Calling on the Road Traffic Department to “revamp and tailor its processes” to capture such information, the Auditor-General’s report concluded: “It is paramount to the sustainability of the Road Traffic Department that processes are controlled to enable the collection of all, revenue due to the Government.

“In order for the Road Traffic Department 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 the Road Traffic Department 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.”

The Auditor-General also found that the Road Traffic Department had under-reported revenue generated from new vehicle licence plate sales by $234,000 for the three years assessed.

With the Department lacking a listing of plates generated, and issued, the audit was forced to rely on the plate production records from the Ministry of Works.

With some 49,800 plates produced over the 2012-2015 period for all vehicle categories combined, the Auditor-General said some $747,000 in revenue should have been generated at $15 per plate. Yet just $512,982 was recorded by the Road Traffic Department.

Mr Bastian and his team also found that the Department was breaching the Road Traffic Act by charging $5 per replacement plate, even though the levying of such a fee was not mandated by law.

This was not the only occasion where the Auditor General found the Road Traffic Department was violating its Act, the report again exposing how a complete breakdown in controls and management oversight in a government department leaves it wide open to fraud, inefficiency and corruption.

The biggest losers from all this are the Bahamian people, especially taxpayers, who are denied ‘value for money’ and strong public services.

And the inability to collect all due monies leads to the Government demanding ever-increasing revenues, helping to drive initiatives such as Value-Added Tax’s (VAT) implementation.

Delivering his verdict on the Road Traffic Department audit, Mr Bastian said: “Based on the deficiencies in internal controls, the breakdown in management’s oversight around the revenue streams noted herein, and all of the malfeasances noted throughout this report, we will conclude that a complete restructuring of the motor vehicle licensing section be executed as soon as practicable”.

The report added that the vehicle licence process deficiencies were “too numerous” to mention, but included one instance where a vehicle licence was fraudulently duplicated within six days of the original being issued.

The duplicate contained the original licensee’s name, plate number and expiration date, and the Auditor-General’s report added: “This situation was exacerbated when the fraudulent licensee admitted to this malfeasance to the original owner in order to obtain an authentic licence in August 2015.”

Mr Bastian and his team said “collusion had to occur” within the Road Traffic Department in the inspection, licensing and cashiering sections for such a fraud to be perpetrated.

“We strongly recommend that the persons complicit in this act be removed with immediate effect,” the Auditor General’s report said.

Its audit also found there were “numerous instances of what appeared to be fraudulent insurance certificates” presented during vehicle licensings and inspections.

“It was especially seen being perpetrated on a particular insurance company’s letter head in the instances examined,” the Auditor-General said, although the firm involved was not named. “It was also noted in examining the samples that there were missing insurance certificates.

“There is a noticeable lack of oversight in the licensing process. The behaviour being displayed by the staff of the Road Traffic Department 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 Auditor-General warned that allowing uninsured drivers on the roads placed “an immense burden” on the Bahamian public, as no financial compensation was available if an accident occurred.

Glenys Hanna-Martin, minister of transport and aviation, yesterday blamed the Road Traffic Department’s reliance on “antiquated” manual processes for leaving it susceptible to fraud, corruption and waste.

In what appeared to be a concerted Government effort to ‘get in front’ of the potential fallout from the Auditor General’s latest report, she pledged “zero tolerance for acts of malfeasance, particularly as it relates to public monies”.

Mrs Hanna-Martin said the $8.3 million initiative to modernise the Road Traffic Department’s systems and processes, and $800,000-$1 million outsourcing of licence plate production, would cut down on the opportunity for fraud and waste. She added that it would also improve the customer experience.