Former RAF board vice chair defends persisiting with legal battle over accounting standard

The former vice chairperson of the Road Accident Fund (RAF), Nomonde Mabuya-Moloele, said the board was not being hostile nor recalcitrant in persisting with its legal battle over the accounting standard used by the fund.

Mabuya-Moloele said the former board was acting on the classification by the Prudential Authority and the National Treasury, that the fund is a social benefit scheme.

Four former board members are appearing before Parliament’s inquiry into maladministration at the RAF on Wednesday, and have told members of Parliament (MPs) that the spike in the fund’s liabilities led it to consider an alternative accounting practice designed for such schemes.

An occupational health specialist by profession, Mabuya-Moloele said the RAF was taking its lead from classifications made by key institutions such as Statistics South Africa (Stats SA) and the International Monetary Fund (IMF), when it also considered legal advice to switch accounting standards which the Auditor General has not approved of.

“We were not recalcitrant for the sake of being it. But the reality of the matter is, the legal advice supported the fact to appeal, we have the right to appeal, and this is a technical matter, let the courts engage.”

The former head of the audit committee, Moses Nyama, has backed her up, saying making the shift was a carefully considered move.

“I don’t think it was a simple decision. I think even within the audit committee and the working committee there was quite a lot of debate about the timing of the recognition, because it did have an impact on the liability.”

Transport Minister Barbara Creecy has subsequently ordered the RAF to end its legal challenge on the matter.

Testimony before the inquiry continues.