By Thapelo Molefe
The African National Congress (ANC) study group on the Standing Committee on Public Accounts (Scopa) has welcomed Parliament’s decision to launch a formal oversight inquiry into the affairs of the Road Accident Fund (RAF).
This follows serious allegations of financial mismanagement, governance failures and irregular spending.
It said in a statement that the inquiry was a key step in promoting clean governance.
“It marks a significant step toward promoting clean governance, accountability, and the responsible management of public resources.”
The decision to initiate the inquiry was made by Scopa last week, with the Terms of Reference adopted on Tuesday.
The RAF, which is responsible for compensating victims of road accidents in South Africa, has come under increasing scrutiny over the past few years due to its mounting financial crisis and ongoing legal battles with the Auditor-General.
In its latest audit, the RAF’s liabilities exceed its assets by R25.5 billion.
“The oversight inquiry into the RAF is both timely and necessary, given the RAF’s adverse audit opinion as concluded by the Auditor-General and ongoing financial challenges,” said ANC Scopa whip Gijimani Skosana.
The inquiry will examine allegations of maladministration, irregular procurement practices, governance lapses, financial misconduct and excessive litigation costs.
Scopa Chairperson Songezo Zibi said the allegations against the RAF were too serious to ignore.
“The volume of complaints and related documentary disclosures to the committee about the RAF make it necessary to examine them thoroughly and make such recommendations as may be necessary to ensure that the institution does its work within legal and constitutional prescripts, and serves the public interest as intended,” Zibi said.
“An inquiry will also give everyone involved or implicated the opportunity to state their case under oath and receive a fair hearing before the committee draws its conclusions.”
The RAF has been locked in a long-standing dispute with the AGSA over how it reports its financials. In 2021, the RAF controversially changed its accounting framework, which dramatically reduced its reported liabilities from R327 billion to R34 billion.
The AGSA refused to sign off on the fund’s financial statements and took the matter to court. The Supreme Court of Appeal recently ruled in favour of the AGSA, reinforcing that the RAF’s accounting approach was unlawful.
Scopa has also raised concerns about the RAF’s heavy spending on external legal services. Reports showed that RAF paid over R55 million to Malatji & Co Attorneys and R30 million to Maponya Ledwaba Inc. during the 2023/24 financial year.
The committee questioned the absence of a permanent legal head at the RAF and the over-reliance on outsourced legal firms.
The ANC study group urged the RAF board, management and all relevant stakeholders to fully cooperate with Scopa’s inquiry.
“Public entities must no longer evade scrutiny and rigorous parliamentary oversight,” the statement read.
Meanwhile, Cosatu has welcomed an announcement by Transport Minister Barbara Creecy in Parliament to revive and retable the Road Accident Fund (RAF) and Road Accident Benefits Scheme (RABS) Bills.
Cosatu parliamentary coordinator Matthew Parks said the federation supported this progressive commitment by the minister.
“The disaster site known as the RAF has been allowed to fester for far too long with current liabilities exceeding R400 billion. Road accident claimants, the overwhelming majority of whom are working class, struggle to submit claims and receive compensation due to them.
“The RAF has occupied headlines countless times with property attached due to unpaid claims, at times leaving RAF employees resorting to sitting on milk crates,” he said.
The inquiry will be conducted by a multi-party panel of Scopa members and is expected to begin in August when Parliament resumes. It may call witnesses under oath and demand documents from the RAF and the Transport Department.
The RAF has been in crisis for several years. It has been operating without key executive staff, including a head of legal and chief claims officer.
“We also found out yesterday that the person acting as Head of Legal (for over 2yrs) at the RAF doesn’t have a law degree. There is also no Chief Claims Officer, two of the most important functions at the RAF,” Zibi said in a post on X.
The fund is also dealing with a backlog of unpaid claims and facing court challenges from medical professionals and law firms owed money.
Scopa said the inquiry would be concluded by October, and its findings may result in recommendations for criminal referrals, disciplinary actions or structural changes within the RAF.
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