By Lehlohonolo Lehana.
Transport Minister Sindisiwe Chikunga has called for the Road Accident Fund (RAF) act to be amended to favour claimants over lawyers.
Chikunga was briefing Scopa on Wednesday when she raised the issue of direct payments to victims instead of lawyers.
“The RAF Act, chair, is such that the RAF must always be in court. It was drafted by lawyers for lawyers. They take the RAF to court. That is why we need to amend that legislation to the extent that the RAF is for claimants and not other people. As it is right now, the RAF, I will invite anyone to read it and see that it is actually taken to court every time by lawyers than by claimants,” said Chikunga.
It is against this backdrop that lawyers would get paid directly by the RAF once the court process was over, but they will not pay the victims, said the minister.
She said the case of the R5.7m that was paid to the lawyer where the victim was only given R57,000 was the tip of the iceberg.
The Standing Committee on Public Accounts (Scopa) said they agreed with her on amendments to the Act.
Scopa chairperson Mkhuleko Hlengwa said that matter has been raised with them and they will engage the portfolio committee on transport to amend the law.
“That matter has been flagged. There may be a need for us to deal with the portfolio committee. There is urgency to the amendments of the RAF Act,” said Hlengwa.
The Special Investigating Unit told Scopa last week that they have recovered R317m from lawyers who had received duplicate payments.
Chikunga has also called on the Road Accident Fund (RAF) and auditor-general (AG) Tsakani Maluleke to reach an “amicable solution” outside the courtroom over their legal rows regarding a “technical accounting dispute”.
The RAF approached the court in 2021 in a bid to stop the auditor-general from delivering a report on the organisation for the 2021/22 financial year. It did not want the office of the auditor-general to publish its disclaimer of opinion and audit report on its financial affairs pending a review of its findings.
A disclaimer is the worst possible audit outcome and signifies an entity’s accounts cannot be relied on. It often indicates the organisation is in serious financial trouble and poorly managed.
At the heart of the dispute between the RAF and the auditor-general is the fund’s controversial decision to adopt new accounting standards, which the auditor-general said had resulted in it understating its liabilities by about R300bn compared with the previous year.
The RAF changed its accounting policy from International Financial Reporting Standards to the International Public Sector Accounting Standards after realising the escalation of its liabilities coincided with an accounting policy adopted in the 2013/14 financial year applicable to insurance contracts. The RAF has argued its liabilities and payment obligations could not be equated to those of an insurance company.
The new accounting policy — which the RAF has used in preparing its financial statements for 2020/21 and 2021/22 — has been rejected by the Accounting Standards Board, the auditor-general and the National Treasury.