Road Accident Fund acknowledges Scopa's inquiry into its operations

IOL News

4 hours ago

The Standing Committee on Public Accounts has resolved to launch a full committee inquiry into allegations of maladministration, financial mismanagement, wasteful and reckless expenditure, and related financial misconduct at the Road Accident Fund.
Image: File
The Road Accident Fund (RAF) said on Friday it noted the decision of the Standing Committee on Public Accounts (Scopa) to institute a full committee inquiry into its affairs.
This comes days after Scopa resolved earlier this week to launch a full committee inquiry into allegations of maladministration, financial mismanagement, wasteful and reckless expenditure, and related financial misconduct at the RAF.
The decision was taken after attempts by the committee to obtain truthful, complete information from the RAF board and executive management came to no avail.
The RAF said in a statement it respected Scopa as an accountability body which derives its functions and powers from Rule 245 of the rules of the National Assembly.
'We will continue to account to the people of South Africa through this important organ of 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 RAF stated that 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 unsustainable funding and operating models were further compounded by an increase in administrative costs, driven mainly by legal and medical costs,' said the accident insurance fund.
In a memorandum prepared for Scopa, committee Chairperson Songezo Zibi cited issues related to the organogram and vacancies at the RAF.
Zibi also mentioned the submission of inaccurate, misleading, and/or false information to Parliament by the entity.
There were also issues related to whistle-blower reports on two media services contracts worth R1 billion, RAF's acquisition of offices, as well as litigation against the Auditor-General and matters of rule of law.
'The information I set out raises numerous and serious concerns about corporate governance at the RAF,' he said.
Scopa's secretariat is expected to draft the terms of reference for the inquiry to be considered by the MPs on July 1 and then use the period afterwards to prepare for the inquiry.
The DA wants the inquiry to cover all of the outrageous financial mismanagement identified over the past months and years at the RAF.
In the letter to Zibi, DA MP Patrick Atkinson said they welcomed the resolution to initiate the parliamentary inquiry into the worsening crisis at the RAF.
'However, for this inquiry to be meaningful and in the public interest, it must be comprehensive in scope. A surface-level examination will fail to address the systematic mismanagement, misconduct and abuse of public funds that have defined the RAF's recent history,' Atkinson wrote.
The RAF defended its use of litigation against the Auditor-General, which will form part of the inquiry.
The entity has pursued the legal action despite being advised not to do so by the Transport Department.
The RAF said it is only in the audit of financial statements that the disagreement with the Auditor-General of South Africa on the accounting policy change resulted in an adverse opinion.
It also said it 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. Furthermore, the introduction of the RAF Contact Centre will go a long way in ensuring that claimants' queries are addressed.'
The RAF said despite its positive strides, it continued to manage challenges associated with a transforming organisation.
'The 2025–30 strategic plan presents an opportunity to optimise areas that have worked and to improve where gaps still persist. To this end, the RAF proactively subjected the 2025/26 annual performance plan to an independent review by the AGSA.
'The RAF reiterates that the most urgent task required to ensure financial and operational sustainability for the Fund is a legislative review.'
[e-mail]