The Minister of Transport, Barbara Creecy, has taken decisive action by dissolving the board of directors of the Road Accident Fund (RAF), citing ongoing governance and operational challenges that have severely hindered the entity’s ability to fulfil its legislative responsibilities.
In an official statement released by the Department of Transport, Creecy highlighted a pattern of persistent issues plaguing the RAF, including exorbitant legal expenditures incurred through protracted litigation over accounting standards. These costly legal battles have not only strained the financial resources of the RAF but also raised questions about its overall accountability and governance practices.
One notable incident that sparked concern was the “reckless handling” of the suspension of the Fund’s CEO, Collins Letsoalo. His subsequent legal challenge to this suspension further complicated the RAF’s operations and led to heightened scrutiny of the board’s decision-making processes.
Furthermore, Creecy pointed to a troubling trend of default judgments against the RAF, which amplify legal costs and present significant obstacles to the organisation’s financial sustainability. These issues, combined with the apparent lack of insight and direction from the board, have necessitated a change in management to restore integrity and trust in the Fund.
In light of this dissolution, the Minister has sought assistance from the National Treasury to appoint an interim functionary who will act as the accounting authority for the RAF in accordance with the Public Finance Management Act. This interim measure aims to stabilise the situation while a more permanent solution can be developed.
sinenhlanhla.masilela@iol.co.za
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