Latest news with #R81-million
Daily Maverick
16 hours ago
- Business
- Daily Maverick
RAF hits Scopa speedbump as rare inquiry signals a reboot
Months of missed audits, vanishing executives and R340bn in liabilities have finally triggered action — Parliament is launching only its fourth full public accounts inquiry since 1994, into the Road Accident Fund. The Road Accident Fund (RAF) will now find itself the subject of a rare full committee inquiry by Parliament's Standing Committee on Public Accounts (Scopa) after months of failed document submissions and non-compliance by its board and executives. But beyond the scandal lies a deeper governance signal. 'This decision follows months of repeated attempts by the committee to obtain truthful, complete information from the RAF Board and executive management to little avail,' reads the 24 June statement. The release also cites reckless financial management, governance failures and whistle-blower reports of supply chain irregularities. While the list of issues reads like a litany, the very act of invoking Scopa's highest oversight mechanism can be interpreted as a positive shift in parliamentary accountability.'Scopa is doing the work it's meant to do,' said Dr Ivor Chipkin, governance expert and executive director of the New South Institute. 'It's checking whether public money has been properly used, whether processes were followed… That is good governance.' Inquiry 'long overdue' Only three other full committee inquiries have been launched since 1994, into Eskom, the SABC and Prasa. That the RAF has now joined that list shows how seriously Parliament views its failings. 'This inquiry is long overdue,' Organisation Undoing Tax Abuse (Outa) CEO Wayne Duvenage told Daily Maverick. 'The situation at the RAF has deteriorated to the point of becoming a national concern.' The RAF's structural dysfunction has been in plain sight for years. The Auditor-General's Annual Report for the 2022/2023 financial year, issued the fund a disclaimer audit opinion – the most severe rating, issued when auditors are unable to find sufficient evidence to support financial statements. It flagged liabilities amounting to R340-billion. The RAF's funding is not typical of an SOE, accumulating through a levy on every litre of petrol and diesel sold in the country. Its failures, then, directly affect every South African, whether you drive, pay for fuel or seek compensation after a crash. All the wheels are falling off The Auditor-General has repeatedly flagged irregular expenditure, procurement failures and poor internal controls. None of the material concerns have been addressed. A revolving door of political heads hasn't helped. 'We've had seven, eight Ministers of Transport over the past 10 years,' Duvenage noted. 'Not one of them really got stuck in to fix what is really broken.'Then came a leaked draft Special Investigating Unit (SIU) report – first reported by the Sunday Times – implicating suspended CEO Collins Letsoalo in procurement irregularities, including an R81-million lease signed against internal legal advice. Duvenage raised the point that conflict with executives in SOEs also causes longer-term challenges, with the personnel lost during conflicts often causing severe, long-term capability losses within the entity. 'We've lost a lot of institutional knowledge, a lot of really experienced, skilled people who understood RAF and its systems.' Letsoalo was suspended on 3 June 2025 after allegedly failing to attend a Scopa hearing in breach of a statutory summons. He is now challenging that suspension in court. What the RAF inquiry means for you You fund the RAF: A portion of every litre of fuel you buy goes directly to the Road Accident Fund. Its failures are costing you money. Massive debt: The RAF has liabilities of R340-billion — its financial mismanagement has been flagged by the Auditor-General for years. Justice delayed for victims: If you or a family member are in a road accident and need to claim, you could wait years for a payout due to the fund's chaotic state. Thousands of claims, many for young people, are stuck in the system. This is only the fourth full inquiry of its kind since 1994. Experts believe it signals a positive shift towards greater government accountability, which could lead to a more functional RAF in the long term. Fiscal problems with real-world consequences Challenges are not inconsequential –the RAF has amassed hundreds of millions of rands in default court judgments due to missed appearances and last-minute settlements. 'In the past five years, 43.5% of personal claims submitted to the RAF were from individuals aged 15-35, totalling [sic] 70,743 claims,' said the fund in a press release issued on Wednesday, 25 June. 'An additional 15,227 claims came from those under 15' – a clear indicator of the physical harm, often borne by the young, who the RAF as an entity exists to support. The National Treasury warned of a collapse in 2021. The Auditor-General has since continued to report noncompliance and weak financial discipline, and this has a direct impact on those who need to claim from the RAF. 'You only realise the damage when you have to claim, and you wait, and you wait. Nothing happens for years,' said Duvenage. Scopa action is a seismic shift The inquiry grants Scopa broad powers to summon witnesses under oath, compel document production and issue subpoenas. These are not symbolic levers – they are constitutional mechanisms designed for exactly this kind of failure. Chipkin argues that Scopa's actions also reflect a broader political shift: 'One of the reasons why this is happening is precisely because we don't have a dominant party. We don't have one party in control any more. So there's an opening here, and what's filling that vacuum is oversight committees and others beginning to act. That's a really good sign.' 'Scopa, if you're on the wrong side of those committees, you're playing with fire. They're not just talk shops. When a parliamentary committee does the job properly, they've got real authority behind them,' said Chipkin. Expected witnesses are likely to include current and former RAF board members and executives, the Auditor-General's office, National Treasury, SIU officials and whistle-blowers. For Duvenage, any hope of reform begins with restoring the institution's personnel and systems to competency. 'RAF needs systems people with industry understanding. Bring back the actuaries, the claims experts and the people who know the job,' he said. For the thousands of claimants stuck in limbo, as well as anyone who is affected by the cost of fuel – which is to say everyone – the inquiry, depending on its actions and findings, is not merely for show, but perhaps for institutional restoration and claims delivered. DM
The Citizen
17-06-2025
- Business
- The Citizen
Tshwane writes off billions in municipal debt through relief scheme
Tshwane writes off billions in municipal debt through relief scheme The Tshwane metro has written off more than R4.4-billion. The metro received more than 20 000 amnesty applications from residents who tampered with electricity meters and more than 1 000 applications under its incentive and debt relief scheme by the May 31 deadline. Metro spokesperson Lindela Mashigo said, 'A total of 20 056 amnesty applications from those who tampered with electricity meters were received. 'The number might rise slightly as counting wraps up. For the incentive and debt relief scheme, we received 1 033 applications, with a total debt of more than R147-million.' Mashigo said the metro reported a late rush in submissions. 'More than 50% of the applications were received in the last week before closing,' he said. All applications received under the debt relief scheme have already been approved. This initiative, championed by Deputy Mayor and MMC for Finance, Eugene Modise, was designed to ease the financial burden of municipal debt and provide residents with a clean slate. According to Mashigo, some settled with a component of arrangements which allowed applicants to benefit from partial write-off after entering into payment agreements. As for the electricity amnesty process, which targeted illegal meter tampering, the metro said it already captured 17 140 of the 20 056 forms, and 10 741 were issued to the electricity department. However, only 300 have been normalised so far, a small fraction given the scale of applications. 'The process is ongoing until all legible [applications] have been normalised.' Mashigo said that while the debt relief approvals are nearly finished, the amnesty programme is still in progress. 'One month from now for debt relief is the expected turnaround time, but for tampered meters, the period might be slightly longer, depending on the electricity department. 'The total value of municipal debt written off through the combination of indigent relief, inactive accounts, and incentive schemes stands at a staggering R4.4-billion.' He said the incentive and debt relief scheme helped write off R66.4-million in debt owed by 918 residential accounts and 66 businesses, who together owed R147.4-million. Of this, R81-million was either collected or arranged to be paid. 'The scheme is not a simple debt write-off arrangement. 'The metro incentivised customers to settle a portion of their municipal accounts and/or enter into a settlement arrangement to benefit from a write-off of a portion of the debt.' Although the amnesty campaign focused exclusively on electricity, the incentive scheme covered all services, including water, refuse, and sanitation. The metro did not separate electricity-specific debt from the rest of the write-offs. Mashigo said on the indigent relief side, about R2.4-million was written off from 85 361 indigent accounts, an intervention aimed at aiding the poorest residents. The metro plans to review the effectiveness of the campaign, and the outcome of that review will inform the next course of action. Mashigo said Tshwane's credit control and debt collection policy remains the central guide in future financial strategy. This policy includes ongoing recovery measures such as disconnections and prepaid blocking. 'Measures such as credit control activities, disconnection of services and prepaid blocking are implemented to recover revenue for services consumed. 'The metro's revenue recovery has been enhanced by the R81-million recovered or committed to through arrangements.' Also Read: BEE is bringing South Africa's economy to its knees – new report Do you have more information about the story? Please send us an email to bennittb@ or phone us on 083 625 4114. For free breaking and community news, visit Rekord's websites: Rekord East For more news and interesting articles, like Rekord on Facebook, follow us on Twitter or Instagram or TikTok At Caxton, we employ humans to generate daily fresh news, not AI intervention. Happy reading! Stay in the know. Download the Caxton Local News Network App Stay in the know. Download the Caxton Local News Network App here
