Road Accident Fund scandal: R43bn govt agency exposed for massive mismanagement

A major government fund meant to help car crash victims is in deep trouble, and taxpayers want immediate answers. Only 60% of the money collected actually helps those hurt, while the remaining 40% goes toward covering administrative costs.

The Road Accident Fund (RAF) gets about R43 billion each year, which comes from the Road Accident Fund Levy, a fuel tax that adds R2.18 to every litre of fuel sold in South Africa. This huge pot of money is supposed to pay for claims from people injured or families who lost loved ones in car accidents that result in serious injury, loss of life, or loss of income.

Parliament probe uncovers deep financial rot

The Standing Committee on Public Accounts (SCOPA) in Parliament is now digging into the RAF’s financial affairs, according to a report seen by Autojournal Africa.

This probe started on October 6 because the fund has given out unreliable and incomplete financial data for years, preventing proper audits. For the last five years, the official Auditor General of South Africa (AGSA) has given the RAF an adverse or disclaimed audit opinion. Action SA MP Alan Beesley called the RAF a “black hole,” saying no one knows how deep the issue goes, labelling it the “government’s concealed rot.”

SCOPA has received over 100 submissions from lawyers, doctors, RAF staff, and victims, and is now calling these parties to testify to uncover the full extent of the mismanagement. Allegations include inadequate background checks on senior executives with a pattern of reckless financial decisions, and general financial mismanagement.

Massive Undisclosed Liabilities and Slow Payments

The RAF is technically insolvent, as its liabilities have far exceeded its assets for well over a decade. For the 2024/2025 financial year, the fund is already running on a R27.8 million deficit, an amount that has been ballooning for over ten years.

Claims processing is also very slow, as the average claim now takes about four years to pay out, causing significant hardship for victims. The RAF is accused of hiding its true debt using an unapproved accounting method, IPSAS 42, which is not sanctioned by the AGSA.

This method has led to the misstatement of outstanding claims liabilities and claims expenditure. By using this unlawful accounting principle, the RAF’s stated claims liability dropped sharply from R330 billion to R27 billion in 2021.

MP Beesley estimates that the fund’s unrecorded liabilities may exceed R500 billion, which he said is nearly a fifth of the national government’s entire annual budget and one of the most serious financial misstatements by any state entity in democratic South Africa.

Victims rejected while money was wasted

Despite taking in roughly R43 billion per annum, the RAF has drastically reduced the number of claims it has paid out to victims over the last few years. Those who have managed to make a successful claim are now facing significant payment delays.

The RAF introduced new paperwork in 2022 that doubled the claim form from 12 to 24 pages, which South African courts later deemed unlawful. Since this change, the number of registered claims has dropped sharply from 300,000 in 2021 to 100,000 in the last financial year. Of the roughly 100,000 claims it received, a massive 72% were rejected.

Parliament heard that most claimants are rarely able to complete the paperwork without the assistance of an attorney. Furthermore, several industry whistleblowers have come forward reporting more than R1 billion in supply chain irregularities.

Examples of questionable spending include the RAF allegedly spending R10 million on personal security for now-suspended CEO Collins Letsoalo, including hotel stays for bodyguards. Despite its financial shortcomings, the RAF spent R4 million on an awards ceremony in March 2025.

It also defended two marketing contracts, each with an allocated budget of R100 million, which were flagged for dodgy invoices, including one for a R48,300 hat. The financial mess has had real-world consequences, with Sunshine Hospital, which was owed R300 million by the RAF, ultimately forced to shut down after issuing 6,285 summons and obtaining 647 judgments totaling R180 million.

RAF defends its position, parliament remains skeptical

The RAF has defended its poor audit outcomes, stating they have been caused by a disagreement with the AGSA over its classification. The entity argues that it is a social benefit fund and is therefore entitled to use non-standard accounting methods, which it says better reflects the RAF’s mandate to compensate victims without a profitability metric.

It also lamented its funding model, which it says is outdated and does not account for inflation and rising claim costs. Parliament remains skeptical of these defenses. SCOPA chair Songezo Zibi labeled the RAF “broken,” adding that the inquiry will potentially be “precedent-setting” for accountability in South Africa.

Read more on Why petrol costs so much in South Africa