Rise Mzansi
Parliament’s Standing Committee on Public Accounts (Scopa) has adopted the terms of reference for the inquiry it has launched into evidence of and allegations of maladministration, financial impropriety and the misuse of public funds at the Road Accident Fund (RAF).
The inquiry will be a Scopa member-led process and focus on the RAF’s financial years from 2020/21 to 2024/25.
The committee aims to begin the inquiry in mid-September 2025, with the goal of completing it by the end of October 2025 although these timelines may be adjusted if necessary.
“It was necessitated by the myriad of allegations and information received by the committee in respect of alleged maladministration, financial impropriety and the misuse of public funds at the RAF.”
Scopa confirmed that the terms of reference for the inquiry covers seven main areas and their financial implications:
Governance failures and ministerial and board oversight
Financial management and compliance with the Public Finance Management Act and other legislation
Procurement and supply chain management irregularities
Legal and litigation expenditure
Fraud, corruption and whistle-blower reports
Automation and claims processing; and
Governance and human resource matters.
“The inquiry is about uncovering the truth, holding the RAF accountable and ensuring that public money serves its rightful purpose of supporting victims,” Zibi told Moneyweb.
He added that Scopa is also going to have to “say no” to a few things in the inquiry because the committee is not the portfolio committee on transport and Scopa’s mandate is quite clear.
“It is important that what we do in the end relates to the use or misuse of public funds or inefficient use of public funds or maladministration and so on,” he said.
Zibi said Scopa will have to examine certain things and if there was a public discourse that says the RAF viz-a-viz taxpayers are getting ripped off by attorneys or whoever, the committee has to look at that because its public funds.
He stressed that the preparation is as, if not more important, than the actual inquiry itself, which means the quality of the information the committee has at its disposal is very important.
Power of subpoena
Zibi said that while Parliament has a power of subpoena, it does not do that at the first instance but first requests the information and the process by which the committee obtains everything it needs will take a bit of time.
“But it’s important that we prepare adequately so that when we have the inquiry, it is focused, it sits for a finite time, it doesn’t go on forever, and we are able to write a report that is useful to Parliament, it is useful to the executive as a whole, it is also useful to South Africans and stakeholders of the RAF. That is our purpose,” he said.
He said the RAF has failed to fully disclose to Scopa the cash and the management of its cash equivalents, and specifics about its investments and the amounts invested. He added that there were contradictions about where those investments were and the RAF said they cannot tell the committee where that money is because people are looking for it.
Corporation for Public Deposits
Zibi said he sought the counsel of the director general of National Treasury, who informed him that unless the legislation specifically allows an entity to invest its cash, all cash reserves must be deposited with the Corporation for Public Deposits, which sits in the South African Reserve Bank.
“Part of this inquiry is to ask why are you [the RAF] not following legislation and doing what the legislation says you should do.
“First of all, where is this money, why are you not doing what the legislation says, show us the proof of what you have invested and so on?” he said.
Responding to Scopa’s decision to institute a full committee inquiry into the RAF, the fund said it respects Scopa as an accountability body which derives its functions and powers from the rules of the National Assembly.
‘Financially unsustainable’
The RAF said it will continue to account to the people of South Africa through Scopa but emphasised what it indicated it has already reported in its the annual reports for the last three years: that the RAF has been financially unsustainable since its establishment in 1946.
“It is for this reason that Judge Melamet in his 1992 Commission of Inquiry Report concluded that the only reason the RAF was able to keep going all these years was that the State was able to provide fuel levy increases to maintain what was clearly an unsustainable benefit structure, paid out in lump sums and thus creating an asset liability mismatch,” it said.
The RAF said the unsustainable funding and operating models were further compounded by an increase in administrative costs, driven mainly by legal and medical costs.
“The RAF reiterates that the most urgent task required to ensure financial and operational sustainability for the fund is a legislative review,” it said.
