AG's office concerned about RAF's solvency, ability to pay claims after another adverse audit opinion

The Road Accident Fund (RAF) has earned itself another adverse audit opinion, largely over its insistence on using an accounting standard found not to be in line with government prescripts.

The RAF has reported a deficit of R2.3 billion for the period ended March 2025, a 44 percent increase over the previous year, meaning its expenditure exceeded revenue earned.

The RAF is largely funded by the fuel levy included in the price of petrol.

Presenting its audit findings to Parliament’s transport portfolio committee on Tuesday, the auditor-general (AG)’s office has expressed concerns about the fund’s solvency and its ability to pay claims.

With matters related to irregular expenditure from previous years still not ironed out, the total, as at the end of the 2024/25 financial year, now stands at R459 million.

Added to that, unfair procurement practices and the long wait for claims to be settled are all factors that have impacted the latest audit finding.

The auditor-general has also come across the use of unauthorised bank accounts, causing payments to be diverted and resulting in financial losses of R36.5 million.

Audit manager Siphesihle Mlangeni said that the use of an inappropriate accounting standard, which does not take into account claims that are not yet settled, affects the accurate determination of the fund’s liabilities, currently put at almost R28 billion.

"The liability may be much higher than reflected in the annual financial statements due to the inappropriate use of IPSAS 42, which is an important point to highlight."

The auditor-general has found no process in place to deal with duplicate, wrong and overpayment of claims now standing at R6.4 million.

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