The media-buying contracts of the Road Accident Fund (RAF) to the value of more than R1bn were under scrutiny in parliament on Wednesday, with MPs questioning senior managers on whether the cash-strapped fund was getting value for money.
The inquiry by the standing committee on public accounts (Scopa) heard that the RAF awarded two tenders to the value of R500m each: one to Dzinge Productions (in December 2023) and the other to Media Mix 360 (in November 2022).
Dzinge’s role involved producing advertisements for mass media, while Media Mix was responsible for placing the finished work across various platforms, including newspapers, billboards, social media and radio.
The Scopa inquiry, which began formal hearings on October 7, is examining the governance, procurement and financial management of the state-supported insurance fund over fiveyears.
The RAF provides compulsory social insurance cover to all road users for injury or death caused by motor vehicle accidents.
Committee chair Songezo Zibi said the inquiry aimed to establish whether systemic failures at the fund had led to irregular expenditure, fruitless litigation and the erosion of public accountability.
The inquiry follows repeated failures by the RAF to provide credible information to parliament and coincides with a legislative review of the Road Accident Fund Act by the department of transport.
RAF communications head McIntosh Polela and senior marketing manager Hlami Mathye took the witness box on Wednesday and fielded questions from MPs.
“We received a whistle-blowing [report] with a list of contracts at the Road Accident Fund, and we subsequently asked for a copy of the same. More specifically, we have asked RAF for a list of all contracts from R5m and above, which has been sent to the committee,” Zibi told the inquiry.
He said the two were among the largest contracts at the RAF, with the integrated claims management system with PwC to the value of about R850m.
ActionSA MP Alan David Beesley asked Polela how the RAF ensured it received value for money, and whether he was totally sure every invoice he approved was value for money.
After some back and forth with Beesley he responded in the affirmative, saying: “The actual process is standardised in such a way that when an invoice comes through, they need to come with proof of work having been done.”
Beesley asked if he was totally sure the work had been done before he signed the invoice for payments. Polela responded: “We are 100% sure the work is actually done. Number one, these are reputable agencies. Two, there’ll be hell to pay if the work hasn’t been done.”
ANC MP Helen Neale-May revealed that since June “the RAF has paid R403m to Media Mix 360 and R172m to Dzinge, a total of R575m out of R1bn for both contracts, raising serious concerns about the sustainability of these agreements”.
She said Media Mix’s bid price was for R5.8m per year, while Dzinge’s was about R16.8m per year, “against budget allocation of R100m per annum for each contract”.
“You are dealing with two agencies in the same media space, how are you dealing with the overlap?” Neale-May asked the two witnesses. Mathye responded: “There’s no overlap at the moment in terms of the work these two agencies are doing.”
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