Road Accident Fund 2019/20 Annual Performance Plan at the NCOP (National Council of Provinces) Transport, Public Service and Administration, Public Works and Infrastructure with Deputy Minister Ms Dikeledi Magadzi
28 August 2019 – Chairperson: Mr KM Mmoiemang (ANC, Northern Cape) – find the plan here – Government Departments & Entities 2019/20 Annual Performance Plan (APP)
- The RAF reported that about +-R15 billion requested claims had been processed and were ready to be paid but the RAF was unable to pay them. 92% of RAF costs went towards the payment of claims.
- There were 86 210 claimants engaged through community outreach in 2019/20.
- There was also a transition from the Road Accident Fund (RAF) to the Road Accident Benefit Scheme (RABS).
- 3 500 caregivers were employed for servicing injured claimants and there were treatment plans introduced for all serious injuries. – Would love to know what these caregivers are doing….
- There was further discussion on community centres in the municipalities, the Road Accident Benefit Scheme Bill, huge liabilities of the RAF.
REMARKS BY THE DEPUTY MINISTER
- Ms Magadzi said the RAF was a victim of its own success because the harder it worked, the more challenges it experienced. – same old same old rhetoric…eye roll
- The RAF was on the verge of collapse financially because there were more debts that the entity had compared to pay outs made. There was a Bill in the National Assembly on the Road Accident Benefit Scheme and she hoped that if the Bill was being dealt with.
- She congratulated the board and team of the RAF on the successful outreach programme.
RAF APP 2019/20 – PRESENTED BY MS LINDELWA JABAVU, RAF Acting Chief Executive Officer
- Ms Jabavu agreed with the Deputy Minister that the RAF was in trouble financially.
- On performance achievements – compared from the 2014/15 to the 2018/19. In 2014/15 – 84% // 2015/16 – 90% // 2016/17 – 90% // 2017/18 – 91% and then dropped to 77% in 2018/19 because there was a shortage in medical experts. The entity went through the tender process and appointed the experts. Is this ‘excuse’ valid?
- inadequate funding: cash constraints leading to non-payment of finalised claims; led to attachment of the RAF’s bank account and assets, removal and sale of its assets.
- Mitigation measures:
- stringent cash flow management;
- improved efficiencies;
- promotion of direct claims to reduce third-party costs;
- detect fraud before payments are made
- and manage productivity and settlement of claims.
- In conclusion, the 2019/20 plan is focused on preparing the future with emphasis on
- processing of claims in less time
- enhancing the quality of claim processing
- prudently managing available cash
- ensuring good governance and management of the business and
- motivating for additional funding to meet real current demand.
Mr T Brauteseth (DA, KZN) asked if the RAF was telling the Committee that South Africans were having far too many accidents and the entity was out stripping its ability to raise the money to look after them. Was this really the problem?
Some tough and valid questions – Mr M Rayi (ANC, Eastern Cape) was very concerned that the Committee was dealing with a final draft APP. He asked why the APP was a final draft and not the full audited APP. He compared the document given to Members and the presentation and discovered those in terms of finances (income statements, balance sheet and cash flow), the documents were totally different. Usually when the Committee deals with the APPs, one would have years that were before the financial year under review and it would state the APP was audited. The RAF’s APP that the Committee was now dealing with did not state it was audited. He asked if the RAF can provide a provincial breakdown. He was concerned that two critical positions were vacant, namely, the CEO and the CFO. He asked if the RAF could indicate how long these positions were vacant, what the effect was with regards to administration and finances of the entity and when are they going to be filled. Mr Rayi struggled to find the actual programmes of the RAF in the APP. What was the RAF’s audit outcome for the 2017/18 financial year?
More valid concerns – Ms S Boshoff (DA, Mpumalanga) commented on the Bill previously tabled in the National Assembly. She finds it highly inappropriate to contemplate introduction of a new Bill where there would be a no-fault system. There was no way that a person that caused an accident could walk away without being held liable for the accident caused – this could be seen as human rights violation because the rights of the victim were taken away. This could also create more litigation against RABS in such an incident. She said the fact that the RAF wanted to introduce the system where one kept a “salary” of R3 500 also does not bode well. Given that minors qualify for compensation when they reach the age of 18, who pays for the medical bills etc when an accident was caused and the minor was injured and does not have a medical scheme? How would the RAF address all matters spoken to in the media and other platforms?
Personal experience – Mr E Landsman (ANC, North West) agreed with Mr Brauteseth that the money cannot reach the population’s demands and the needs. He said there were instances of corruption and negligence. The matter of who to pay and not pay was a long court battle and some things were not even resolved. He used the example of his father who was a claimant who fought in court for 19 years and got paid after 21 years.
The Chairperson reiterated that the NCOP mainly focuses on provincial matters. He then proposed a breakdown from each province in terms of fuel levy and claims received on a daily basis.
- On the RABS Bill, Deputy Minister Magadzi replied that she was afraid to venture into the Bill because a week or two ago she was answering court papers with respect to how Members engaged with the Bill in the National Assembly. She said she would have loved to talk to the Committee about the matters infused.
- MS Jabavu responded that on the unqualified audit, the RAF would have loved to have a qualified audit because in the last two years it had unqualified audits.
- Ms Jabavu responded that the RAF started with interviews for the CFO. The position of CPO was also created because the budget of the tenders that the RAF had were huge. Interviews of the CPO would begin in early September 2019.
- Ms Mantiti Kola, Chief Strategy Officer, replied that the APP was a written final draft. In terms of the National Treasury planning cycle, on the old process, the RAF had three incidences where it submitted the APP – the first draft was in August, second draft in November and the final in January. This year, the TAF submitted the final APP in January as per the framework but one was also submitted in July post-elections however the final APP was derived from the old framework. The RAF will present this year’s upcoming APP in October.
- Deputy Minister Mgadzi complimented the good work that was done by the RAF particularly the “RAF on the Road”. As the Committee dealt with provinces, perhaps the RAF should provide information on where the programmes were and when it takes place so that the Committee would able to see the work of the RAF.