RAF’s R230bn scam the worst in history

Scopa confirms a decade of unlawful practices and ministerial complicity

THE Road Accident Fund (RAF), tasked with protecting millions of road-crash victims, is facing its worst financial and governance crisis in history, as Parliament’s Standing Committee on Public Accounts (Scopa) this week confirmed grave unlawful conduct within the RAF, validating more than a decade of warnings from the Association for the Protection of Road Accident Victims (Aprav).

The findings reveal staggering manipulations of liabilities, illegal accounting practices, and the erasure of 80 000 legitimate claims, amounting to hidden liabilities of R230 billion. This unprecedented crisis has denied justice to hundreds of thousands of South Africans.

In 2021, chartered accounting firm Morar Incorporated was appointed to advise the RAF on whether to change its accounting policy from insurance contracts to social benefits under International Public Sector Accounting Standard (IPSAS) 42.

Morar recommended that the RAF continue applying IFRS 4 (insurance contracts), a policy it had used since 2014/15 without major audit issues, until the Accounting Standards Board (ASB) finalised its standard for social benefits, projected for 2023.

Director Anesh Bikram of Morar Incorporated testified: “We recommended that RAF continues to apply IFRS 4 until the ASB has finalised the standards for social benefits.”

Despite this, the RAF rejected Morar’s technical opinion and adopted IPSAS 42. Bikram revealed: “After we furnished our technical advice, we were asked to withdraw the opinion … The response was simply that the management has the right to solely select its accounting policy. It was deemed that the technical opinion was not of the high-level review.

“I did not get a complaint about the work we conducted … Because it was outside the scope of work, we were not required to bill for the work we did. That is the basis we withdrew it.”

This policy shift diverged from Generally Recognised Accounting Practice (Grap), leading to understated liabilities and claims expenditure, a disclaimer audit opinion, and a protracted court case with the Office of the Auditor-General.

Scopa confirmed that the RAF’s implementation of Board Notice 271 of 2022 was unlawful. The notice, which altered claims procedures, had already been legally set aside by the courts, but the RAF continued using it to reject claims.

According to Scopa’s parliamentary report: “The unlawful change to the Ipsas 42 accounting standard and the implementation of Board Notice 271 of 2022 were condemned as illegal actions that ‘were used to disguise the Fund’s liabilities and suppress claim processing’.”

The Lawyers’ Professional Indemnity Insurance Fund (LPIIF) stated: “There is no lawful basis for the continued use of the notice or its related claim-form regime. The RAF’s ongoing use of this instrument openly defies judicial rulings and ‘undermines the very victims it is meant to protect’.”

Testimony from LPIIF general manager Thomas Harban confirmed the Minister of Transport’s full awareness of the unlawful system, yet no corrective action was taken.

Scopa declared: “The Minister of Transport can no longer plead ignorance.” Scopa chairperson Songezo Zibi rebuked those responsible: “The Ministry has, by omission or approval, allowed illegality to persist, despite repeated court rulings setting aside the very framework the RAF relies upon.”

Scopa MP Patrick Atkinson said: “In plain terms, the RAF has rewritten the law to suit itself, and the Ministry has stood by while all this happened.”

Aprav deputy chairperson Ngoako Mohlaloga echoed this sentiment: “The Minister can no longer plead ignorance on this matter, as her ignorance can be seen as being complicit in the unlawful regime.”

The consequences are not abstract; they represent shattered lives. According to Mohlaloga: “These numbers are not accounting anomalies; they are evidence of a humanitarian and fiscal crisis, lives placed in limbo by a Fund that has forgotten its mandate.”

Former RAF actuarial head IW Charakupa testified: “The RAF’s reforms resulted in ‘a 65% drop in new claims registered and a 58% decline in finalised matters between 2020 and 2024’, clearly demonstrating a ‘cunning strategy to support their unlawful accounting standard at the expense of victims’.”

Behind every so-called “non-compliant claim” stands a family denied rehabilitation and justice, trapped by an illegal policy that erased 80 000 legitimate claims and concealed R230bn in liabilities.

PriceWaterhouseCoopers (PwC) briefed Scopa on its R8.3 million 2020 contract to conduct an organisational structure review and skills assessment. PwC’s Dayalan Govender said: “The scope only included designing and developing a transition plan, not implementation. The design of the organisational structure was developed in line with the RAF 2020–2030 strategic plan.”

However, the scope excluded liaison with unions, verification of employee qualifications, and any recommendation to halt claims processing. Govender emphasised: “No suggestions that they should not be processing claims. We were not told [the claims origination department] was not required or won’t be required.”

PwC identified inefficiencies such as claim backlogs and uneven staff-to-claim ratios across offices. While RAF expressed interest in investment functions, Govender noted: “The organogram did not provide for a fully fledged investment office as RAF’s mandate was to disburse money. There was a thinking with RAF that they had money and besides disbursing it, some had to be invested.”

On implementation failures, Govender said: “I am not sure how it was implemented, as I said I was not part of the implementation.”

Aprav has demanded urgent action from Transport Minister Barbara Creecy:

• “Withdraw the unlawful Board Notice.”
• “Return to the 2008 RAF Act and original claims procedures.”
• “Re-register all unlawfully rejected claims and allocate ‘link numbers’ to ensure payment.”

Mohlaloga said: “We call on every South African, from civil organisations and Parliament itself, to demand transparent reform and lawful administration of the Fund. The law has spoken. Now the Ministry must act. Justice for road-accident victims cannot wait another day.”

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