Pretoria - The Road Accident Fund (RAF) will be asking for leave to appeal the refusal by the Gauteng High Court, Pretoria, to keep the Auditor-General’s report regarding its financials under wraps for now. The RAF asked that the report into its affairs not be presented to Parliament and that it entirely remains under wraps pending an urgent review of the findings.
Judge Colleen Collis dismissed the application and said that in terms of the RAF Act, there was a duty on the entity and the Auditor-General to present the report to Parliament.
The audit concluded that the RAF’s liabilities exceeded R361 billion, while it maintained that its liabilities are no more than R30bn.
Auditor-General Tsakani Maluleke in December issued the RAF with a disclaimer audit opinion for the 20/21 financial year.
It was argued that the RAF changed its accounting policy early last year because it was erroneously classified as a commercial insurer.
According to the RAF, it is in fact a social insurer as it provides public insurance against risks such as loss of income due to car accidents.
RAF CEO Collins Letsoalo yesterday, during a television interview, denied that the bone of contention is about the R361bn liability which the Auditor-General claimed it was facing.
He said the only issue was whether the accounting policy which the RAF had applied (which resulted in the R30bn liability) was wrong or not.
While he would not elaborate on what the stance of the RAF was in this regard, he maintained that the accounting policy used by the RAF was correct and up to standard, although the Auditor-General is disputing this.
Letsoalo indicated that the RAF was going to file its notice to appeal the judgment yesterday. Although the RAF is said to be the second biggest state liability after Eskom, Letsoalo was adamant that they were on track with business and fulfilling its promise to pay claimants within 180 days as promised.
In its urgent application which was turned down, the RAF said it would be severely prejudiced if the report was made known at this stage. It was argued that the report needed to remain under wraps, pending the finalisation of a review application to have it overturned. The review application is still pending.
The trigger to this application as contended by the RAF was its decision in April 2021 to change its accounting policy from using the International Financial Reporting Standards to the International Public Sector Accounting Standards.
It was argued that the RAF, by adopting this policy, understated its liabilities by approximately R300bn when compared to the prior year’s computation of the liability.
The A-G said the RAF’s financial statements were not prepared in according to the prescribed financial reporting framework and not supported by full and proper records.
Pretoria News