The Road Accident Fund told parliament this week that, despite recent improvements in claims payments, it remains technically insolvent and structurally constrained in its ability to meet its obligations.
It says liabilities are continuing to outstrip revenue and available cash resources.
Appearing before Scopa, the RAF’s interim board confirmed that the fund’s liabilities continue to exceed its revenue base, with claims obligations running well beyond available cash resources.
While claims payments increased from R28.4bn in the 2024/25 financial year to R33.5bn in 2025/26, the RAF acknowledged that these gains have not resolved the underlying funding mismatch or the growing “requested but not yet paid” (RNYP) liability, which stood at R17.8bn by January 27.
The hearings formed part of Scopa’s ongoing inquiry into the governance, financial sustainability and executive oversight of the RAF.
The fund has been under an interim board since August 2025.
People will say the Road Accident Fund is underfunded and needs more money. But if you go to Treasury with that notion, they will look at how inefficient the administration is and how money is being spent on areas that do not make sense.
— Kenneth Brown, interim board chair
Interim board chair Kenneth Brown told Scopa that internal efficiencies and cost-containment measures would be insufficient to address the RAF’s long-term sustainability challenges.
“People will say the Road Accident Fund is underfunded and needs more money,” Brown said. “But if you go to Treasury with that notion, they will look at how inefficient the administration is and how money is being spent on areas that do not make sense.”
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Brown told the committee that the RAF pays R45bn-R50bn a year in claims, of which about 25% is paid to attorneys under the contingency fee system.
“That amounts to about R12.5bn spent on administration,” he said, adding that a move towards a direct claims model could result in big cost savings.
He told the MPs that default judgments have risen sharply, reaching R6.6bn in the previous year and accumulating to about R15bn. According to Brown, many of these costs arose from matters that were not defended, resulting in inflated settlements.
Structural mismatch
The chair of the audit and risk committee, Alfredina Themba, told Scopa that the RAF’s financial challenges are rooted in a structural mismatch between fixed revenue and escalating liabilities.
“From an accounting perspective, if your revenue is fixed and your costs keep increasing, you are supposed to reduce costs,” Themba said. “But how do you reduce costs when claims come from people who are injured in accidents? We cannot stop claims from coming in.”
Themba confirmed that the RAF has withdrawn its litigation against the auditor-general after years of dispute over the appropriate accounting treatment for claims liabilities. She said the board’s focus is now on stabilising liabilities, improving claims data accuracy and strengthening internal controls.
Scopa questioned the interim board on long-term employee suspensions, procurement practices and legal expenditure. The board confirmed that more than 50 employees had been placed on paid suspension for extended periods without finalised disciplinary outcomes, contributing to big legal costs and operational strain.
The RAF 1 claim form, currently before the Supreme Court of Appeal, was another key issue raised. The board confirmed that a large proportion of claims submitted under the form have been rejected as non-compliant because of documentation requirements, and that an adverse ruling could expose the RAF to substantial additional liabilities.
Executive oversight
On Wednesday, attention shifted from the RAF’s internal governance failures to the role of executive oversight, as the ministry of transport appeared before Scopa to respond to allegations of ministerial interference in the fund’s operations.
Deputy minister Mkhuleko Hlengwa told the committee that correspondence sent by the minister to the RAF does not constitute interference, but forms part of routine shareholder oversight linked to annual performance plans and quarterly reporting requirements.
Hlengwa said the department receives regular performance assessments from its state-owned companies governance unit and issues formal correspondence to all entities under its portfolio if performance concerns are identified.
“Ordinarily, they are going to receive correspondence to say you are not performing in certain areas and that you have to address those issues,” he said.
He rejected claims that the RAF has been singled out, stating that the same approach applies across the department’s entities. Hlengwa added that he reviews submissions before they reach the minister and raises concerns if necessary as part of an internal system of checks and balances.
“We are not going to allow a situation where we do not engage with our entities simply because previous styles of ministry were different,” he told Scopa, adding that the current approach is intended to promote transparency and clarity rather than operational control.
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