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The Standing Committee on Public Accounts (SCOPA) is concerned about the adverse audit outcome of the Road Accident Fund (RAF) for the 2023/2024 financial year in the context of an ongoing disagreement with the Auditor-General (AG).
 
RAF has received adverse outcomes for three financial years, mainly due to the entity’s decision to apply a different accounting policy to what the National Treasury has determined. To date, the matter has been litigated in both the High Court and the Supreme Court of Appeal (SCA), with both agreeing with the AG. The entity told the committee that it has applied to the Judge President of the SCA for reconsideration.
 
The adverse audit outcome is due to RAF refusing to use the Generally Recognised Accounting Practice (GRAP) that is prescribed by the Public Finance Management Act (PFMA) for it as an entity of government. RAF uses the International Public Sector Accounting Standards Board (IPSAS) 42 as an accounting standard which differs from the GRAP. The committee wants government to resolve this matter speedily.
 
The committee is also concerned about the financial sustainability of the fund under its current funding model. RAF relies mainly on the fuel levy as its main source of revenue stream, which is evidently insufficient.  The Deputy Minister of Transport, Mr. Mkhuleko Hlengwa informed SCOPA that the ministry is conducting a review of the funding model and the related pieces of legislation to enable RAF to be sustainable.  
 
SCOPA has requested RAF to furnish the committee with the following detailed written information:

Accumulated deposits in its banking accounts so that the committee can be certain that this is not at the disadvantage of claimants

Outstanding settlements that have exceeded the stipulated 180 days settlement.

The number and value of default judgements against the RAF.

A full list of executives and supply chain officials, and whether they have been vetted or not.

The AG will in due course table its audit report on the RAF, while minister Barbara Creecy will be appearing before the committee on 23 October 2024 to provide an update on various state entities falling under the Department of Transport.

Issued by the Parliamentary Communication Services on behalf of the Chairperson of SCOPA, Songezo Zibi