Parliament, Monday, 14 August 2023 – The Standing Committee on Public Accounts (SCOPA) will on Wednesday conduct an oversight visit to the Road Accident Fund (RAF).

SCOPA conducted an oversight visit to RAF on 23 June 2023 to investigate a dispute with the Auditor-General related to the RAF’s audit outcome for the 2021/22 financial year. On 2 June 2023, the Auditor-General of South Africa (AGSA) awarded the RAF a disclaimer audit opinion for the 2020/21 financial year, with findings on non-compliance with legislation, including the Public Finance Management Act (PFMA).

According to the AGSA, RAF management amended its accounting policy regarding International Public Sector Accounting Standard (IPSAS) 42 to recognise claim liability and expenditure as social benefits. This accounting policy conflicts with the conceptual framework of generally recognised accounting practice (GRAP), which applies to the RAF as a PFMA Schedule 3A entity, and the way in which it disclosed the provision for claims liability in its annual financial statements.

According to the 2020/21 annual report, the public entity is technically insolvent due to significant operational challenges. Key among these challenges is an operating model that relies heavily on litigation, resulting in a substantial portion of the revenue being allocated to administrative costs rather than claimants. These administrative costs include legal, medical and actuarial expenses.

On 19 April 2023, the RAF appeared before SCOPA for a hearing on its 2020/21 annual report and financial statements. Based on unsatisfactory observations made during the previous oversight visit and matters reported by Auditor-General, the committee decided to conduct a follow-up visit to determine the RAF leadership’s accountability, inadequate storage space and filing systems, unconducive working environment for employees, poor administration and improper handling of claims, and high legal costs and default judgments.


Details of the oversight visit: 

Date: Wednesday, 16 August 2023

Time: 09:00 – 12:30

Venue: Parktown site visit (10 Junction Ave Parktown, Johannesburg)

Time:  15:00 – 18:00

Venue: Centurion site visit (2 Eco Glades Office Park, 420 Witch Hazel Avenue, Centurion)


ISSUED BY THE PARLIAMENTARY COMMUNICATION SERVICES.


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Name: Faith Ndenze (Ms)

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Email: fndenze@parliament.gov.za