Road Accident Fund addresses SCOPA inquiry into financial management
The Standing Committee on Public Accounts (SCOPA) has launched a full-scale inquiry into the Road Accident Fund (RAF
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The Road Accident Fund has maintained that it has increased the money paid to claimants and lowered its costs, as Parliament’s watchdog is set to begin a full inquiry into claims of mismanagement and wasteful spending at the Fund.
IOL previously reported that the Standing Committee on Public Accounts (SCOPA) has decided to launch a full-scale inquiry into the Road Accident Fund (RAF) following mounting allegations of financial mismanagement, wasteful spending, and governance failures.
According to the committee, this decision followed "months of repeated attempts by the committee to obtain truthful, complete information from the RAF Board and executive management to little avail".
SCOPA is expected to approve the terms of reference for the inquiry on July 1, 2025, with the investigation set to commence after the August recess.
In a statement on Friday, RAF said it respects SCOPA’s role and will keep answering to Parliament.
"We reiterate and put emphasis on what we have already reported in the RAF annual reports for the last three years, that the RAF has been financially unsustainable since its establishment in 1946," the fund said.
"It has been the subject of multiple commissions of inquiry, and the common thread across all commissions’ findings has been the disconnect between the funding model and the benefit structure"
The fund also highlighted that claimant payments rose to 83% of claims costs in 2023/24, while administrative costs dropped to 17%.
"This was a crisis that, if not addressed, would present an existential risk for the RAF and was the basis for the 2020–25 turnaround strategy"
RAF also said it steadily improved its performance against objectives, from 57% in 2019/20 to 85% in 2023/24.
According to the entity the Auditor-General of South Africa’s 2023/24 audit “did not identify any material findings on the reported performance information of Outcome 1 (a transformed and sustainable RAF) and Outcome 2 (system modernisation).”
"Additionally, the audit of compliance in respect of procurement and contract management, expenditure management, asset management, strategic planning and performance management were all concluded without any material findings. It is only in the audit of financial statements where the disagreement with the AGSA on the accounting policy change has resulted in adverse opinion".
On governance, the RAF stressed its commitment to transparency and control, with dedicated Forensic Investigations and Ethics divisions
"Amongst the key strategic outcomes for the RAF is Outcome 3 which focuses on strengthening the control environment and governance. The RAF has internal Forensic Investigations and Ethics divisions to ensure proper and transparent management of corrupt and unethical practices. An independently managed ethics and fraud hotline is available for staff and stakeholders to anonymously report any unethical and corrupt practices,"
mthobisi.nozulela@iol.co.za
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