Transport Minister Barbara Creecy is contemplating an investigation into the financial misconduct by the board of directors of the Road Accident Fund (RAF).
This potential probe arises from the ongoing litigation between the RAF and the Office of the Auditor-General (A-G).
Creecy revealed this during a question session in the National Assembly on Wednesday when asked about litigation involving the RAF, with DA MP Chris Hunsinger voicing concerns about the RAF’s persistence in legal proceedings against the A-G.
Hunsinger said the Pretoria High Court had dismissed RAF’s legal challenge against the A-G and that many see the institution’s stubbornness in not following the prescribed accounting standards as an indictment of the RAF’s management and board.
“Do you think, Minister, it is fair to utilise taxpayer money for these seemingly pointless yet planned judicial challenges?” asked Hunsinger.
In her response, Creecy stated that she and her deputy Mkhuleko Hlengwa were on record that the RAF should not to proceed with the legal action.
“And should they do so, I will initiate a financial misconduct investigation of the board as this might constitute a violation of section 83.1 of the Public Finance Management Act,” she said.
The RAF has petitioned the President of the Supreme Court of Appeal after the same court refused to hear their leave to appeal after it lost an application in the Pretoria High Court to review and set aside the A-G’s 2020-21 disclaimer audit report following its failure to interdict its publication.
The RAF undertook the legal action despite the Transport Department, instructing it to find a solution to the dispute that was sparked by a finding on its finances by the A-G.
The A-G had found that the International Public Sector Accounting Standards 42 RAF used, was inappropriate and significantly different to the South African Standards of Generally Recognised Accounting Practice.
Meanwhile, Creecy confirmed that RAF has obtained an interim interdict against SARS in a dispute about diesel refunds claimed by Eskom.
This after SARS and Eskom entered into a settlement agreement in which the taxman contended it was obliged to pay Eskom R5,1 billion that was to be deducted from the RAF. She said although the RAF declared a dispute in terms of the Intergovernmental Relationship Framework Act, SARS deducted the first tranche of about R1,2 billion from the RAF.
“The Road Accident Fund approached the court for relief and the interim relief was granted against SARS,” Creecy said, adding that SARS was interdicted from deducting the R 5,1 billion or any part thereof from the fund.
However, she said SARS was still entitled to make other statutory deductions, which were not related to the disputed R5,1 billion.
“The interim interdict will remain operative until such time as the dispute that was declared by the applicant (RAF) and the first respondent (SARS) has been resolved or the process has been terminated.”
Creecy also said if the dispute was not resolved, RAF will be entitled to institute proceedings to prohibit SARS from recouping the R5,1 billion.
“This interdict is an interim interdict. Once the merits of the case have been considered by the court the department will then comply with the final decisions of the court order,” she said.
“This process must run the 45 days on the intergovernmental dispute as determined by the court. Should that fail, RAF obviously, in terms of this interim court order, is entitled to institute further legal proceedings against SARS.”
