From the CEO’s Desk
SUSTAINING PERFORMANCE WHILE STRIVING FOR BEST MANAGEMENT PRACTICES
In the 2012/13 financial year, Roads Agency Limpopo (RAL) got a disclaimer from the office of the Auditor-General of South Africa. And in the 2013/14 and 2014/15 financial years, the Agency got consecutive adverse audit outcomes.
All these aforementioned audit opinion verdicts were attributed to a number of complex issues, such as Supply Chain Management (SCM), which led to audit findings being raised that certain goods or service, or both, were procured irregularly and in some instances for no substantive reason, leading to irregular, and fruitless and wasteful expenditure. Irregular procurement was as a result of the lack of internal controls.
In addition to the SCM challenges, there was leadership instability at the Board of Directors and executive management levels.
The Board of RAL, led by Board Chairperson Matome Ralebipi was appointed by the MEC of Public Works, Roads and Infrastructure in April 2014. This was subsequently followed by my appointment to the position of Chief Executive Officer of the Agency in March 2015.
The leadership focussed on putting internal controls and systems in place to curb irregular, and fruitless and wasteful expenditure as part of the focus areas of the 2015-2020 turnaround strategy.
Dealing with historical irregular expenditure of more than R1.6 billion was a serious challenge due to lack of documentation, and cooperation of some staff members who had left the organisation.
The fact that there were two consecutive adverse audit opinions contributed to the complexity of the operational challenges at RAL. However, the leadership was determined to meet the challenge of turning around the Agency.
Senior management and executive positions were filled with qualified and experienced individuals, more especially in the Engineering and Finance divisions. Engineering and finance are critical for the success of the Agency because one of the challenges was attributed to the outdated fixed asset register.
Furthermore, at Board level, the leadership focused on capacitating and strengthening the oversight committees, more especially the independent Audit and Risk Committee, which had three independent non-executive directors who are experienced Chartered Accountants (SA) in their own right.
This hard work and commitment to succeed was rewarded in the first full financial year of the current leadership - the 2015/16 - when the Agency turned two prior adverse audit opinions into a qualified audit opinion. This was followed by an improved unqualified audit opinion in 2016/17.
Even though the target henceforth was to achieve a clean audit opinion, the Agency did not regress retaining the unqualified audit outcome for 2017/18. This is a clear indicator of the manifestation of historical SCM challenges and the need for the cleanup of the asset register.
It is crucial to balance infrastructure service delivery, compliance and good governance. Put simply, an institution can comply with procurement processes but fail in terms of infrastructure service delivery. Thankfully RAL has been able to balance the two.
During the current 2018/19, RAL is also planning to accelerate its Strategic Partnership Approach and conclusion of agreements stemming from such negotiations to deliver on the muchneeded road infrastructure in the province.
In the period 2015 to date, partnership agreements valued at more than R482 million have been signed with private sector partners. More specifically, strategic partnership agreements with the mining industry have resulted in the improved delivery of economically strategic road infrastructure projects in mining districts such as Sekhukhune and Waterberg.
This has resulted in visible dent against road infrastructure backlog that has been a serious challenge in our relatively sparse rural province.
We will further engage with consulting technology solution-oriented companies to explore options of delivering cheaper and affordable but good quality roads.
The President of South Africa and the Premier of Limpopo have called on all of us to join in the course for economic transformation and betterment of our people’s lives. We dare not disappoint.
MR MASELAGANYE MATJI, RAL Chief Executive Officer