The Road Accident Fund (RAF), South Africa’s safety net for road crash victims, is facing serious allegations of under-reporting billions in unpaid claims to appear solvent.
The controversy centres on a disputed accounting policy change that dramatically reduced the RAF’s reported liabilities.
In a sworn affidavit to Parliament’s Standing Committee on Public Accounts (SCOPA), former RAF actuarial manager Itayi Charakupa claimed the fund’s 2020–21 financial statements understated liabilities by more than R300 billion. He described the move as “an accounting sleight of hand” that misled Parliament and the public.
How the Accounting Change Sparked a Storm
From IFRS 4 to IPSAS 42
In 2020, the RAF replaced its approved IFRS 4 accounting standard, typically used for insurance obligations, with IPSAS 42, which is designed for social-benefit schemes.
Under the new model, only settled claims and those with formal offers appeared in the books. Unpaid and unreported claims, previously included under IFRS 4, were left out.
Charakupa told MPs that before the switch, the RAF’s total liability stood at roughly R356 billion, but the fund’s published accounts showed only R29.6 billion. He argued that the “paper reduction” had no actuarial justification and created the illusion that the fund’s finances had improved.
The Auditor-General of South Africa (AGSA) later confirmed the change was unauthorized. In 2021, the AGSA issued a disclaimer of opinion, warning that the financial statements were “materially misstated” and did not comply with accounting standards.
What the Courts and Oversight Bodies Found
Court Ruling Confirms Unlawful Accounting Change
In April 2024, the Gauteng High Court ruled that the RAF could not unilaterally change its accounting framework. The court found that the RAF’s 2020–21 statements failed to comply with the Accounting Standards Board (ASB) requirements and ordered the fund to revert to IFRS 4.
The court also noted that the reported liabilities had dropped from R327 billion to R34 billion after the switch, a change it described as unjustified.
SCOPA Launches Inquiry
In June 2025, Parliament’s SCOPA announced a full inquiry into the RAF’s financial management, citing concerns over “maladministration, reckless expenditure, and accounting irregularities.”
The committee has since heard testimony from the AGSA, ASB, and the Special Investigating Unit (SIU). The SIU reported ongoing probes into possible corruption and duplicate payments to law firms, which have already cost the RAF hundreds of millions.
A Crisis Hidden in the Numbers
While the precise figures are still under investigation, there’s no doubt the RAF is in financial distress.
The 2023/24 financial year recorded a deficit of R25.5 billion, and the fund remains technically insolvent, with liabilities far exceeding its assets.
Some reports, including commentary from political groups such as ActionSA, claim the RAF’s total unpaid or unrecorded liabilities could exceed R500 billion. However, this number has not been confirmed by the Auditor-General or Parliament.
Regardless of the exact total, one fact is clear: thousands of road crash victims continue to face long waits for payment as the fund struggles to meet its obligations.
The Human and Financial Toll
For Road Accident Victims
The RAF’s mandate is to compensate victims for medical costs, loss of income, and pain and suffering.
But years of financial mismanagement have left many stranded. Delays in payouts, court backlogs, and disputes over attorney payments mean victims often wait years to receive compensation, if they ever do.
For Taxpayers and the Economy
The RAF is funded primarily through South Africa’s fuel levy. When mismanagement and under-reporting occur, taxpayers ultimately shoulder the risk.
If the fund cannot meet its obligations, the state may have to step in, an outcome that could cost billions more.
Financial analysts warn that such accounting practices undermine public confidence and could affect the government’s credibility in managing state-owned entities.
What Needs to Happen Next
To restore integrity and solvency, experts recommend several steps:
- Return to IFRS 4 or an approved equivalent, ensuring all liabilities are accurately recognised.
- Publish transparent updates on unpaid claims and pending cases.
- Strengthen governance by appointing a stable board and ensuring compliance with AGSA recommendations.
- Reform the funding model, reducing dependence on the volatile fuel levy.
The AGSA and SCOPA have called for stronger oversight, while civil society groups demand accountability for those responsible for misreporting.
A Question of Accountability
The RAF’s accounting scandal raises broader questions about financial ethics and transparency in South Africa’s public institutions.
While courts and auditors have confirmed that the fund’s accounting change was unlawful, the deeper issue lies in restoring public trust.
Whether the fund deliberately misled the public or acted out of poor judgement, the outcome remains the same: accident victims are waiting, and billions remain unaccounted for.
South Africans deserve a transparent, solvent RAF that fulfils its constitutional role: providing justice and financial relief to those injured on the roads, not hiding behind creative accounting.
Related: Reintroduction of Road Accident Benefit Scheme Bill Criticised as ‘Ill-Advised’