(Photo: Unsplash / Victor Sanchez | RAF logo) 
In the wake of explosive evidence of the Road Accident Fund’s accounting practices and its collapsing claims system, the board has suspended four top executives – the acting CEO, the chief financial officer (CFO), chief governance officer and the head in the office of the CEO – on precautionary terms with immediate effect.
City Press has named three of them: acting CEO Phathutshedzo Lukhwareni, CFO Bernice Potgieter and chief governance officer Mampe Kumalo.
The RAF noted on Friday afternoon: “These precautionary measures do not in any way constitute a finding of wrongdoing against the affected officials but are intended to ensure the integrity and transparency of the investigative process. However, it reflects the Board’s determination to act in the best interests of the organisation, safeguard public trust and uphold the highest standards of ethical conduct in the management of public funds.”
The move comes after the testimony of Ian Barriel, a former senior manager at the RAF, on Friday, 7 November.
Barriel's testimony on Friday reflected that:
There was no proper transition when panel attorneys were dumped
Barriel says there was no adequate transition plan when RAF cancelled its panel of external attorneys; recruitment for in-house/state-attorney capacity started only when those contracts were ending or already ended, leaving a gap in RAF’s ability to defend claims.Disciplinary processes in theory vs practice
In theory, a line manager at the RAF is meant to identify misconduct and work with Employee Relations (ER) to investigate, draft charges and run a fair hearing. In practice, Barriel confirmed that, in some cases, executives or the CEO instructed that certain employees be disciplined, with ER and line managers then expected to act on that instruction.Suspensions massively exceeded RAF’s own policy
RAF policy says suspensions should not exceed six months, except in limited circumstances. Barriel acknowledged some staff were suspended for years. Barriel said although HR often recommended their return, these recommendations were ignored.CEO/executive pressure
He testified that employees perceived as not supporting the “transformation/transition” agenda or questioning certain decisions could be labelled “anti-transformational” and then find themselves targeted – including resistance to reinstatement even after they’d won at CCMA or in the courts.Use of external lawyers internally
Under the most recent CEO, the RAF used panels of external labour attorneys to initiate and chair internal disciplinary hearings, justified on the basis that RAF “cannot prosecute itself”. This substantially raised costs and tilted the playing field against ordinary employees.Public money used to ‘out-litigate’ staff
Barriel accepted the committee’s characterisation that the RAF used public funds (fuel-levy money) to sustain long, expensive legal battles against suspended employees – running matters through CCMA, Labour Court, Labour Appeal Court and beyond instead of accepting adverse findings, while employees with limited means were worn down emotionally and financially.Creation of ‘specialist’ posts
He explained that seven specialist adviser posts reporting directly to the CEO were created during the transition, job-profiles drafted and graded by an external provider, and recruitment run via an agency under a “scarce/specialist skills” route. Separately, the CEO requested PRASA to second Stephen Msiza, a security specialist, to the RAF, with that security function reporting directly to the CEO.
Over the past few weeks Parliament has heard damning testimonies which have revealed how the RAF manipulated accounting standards to conceal the scale of its liabilities, among other things.
Former chief actuary and senior actuarial manager Itayi Charakupa warned that if the fund processed all outstanding claims, it would run out of cash almost immediately.
The numbers to date support his account. While the RAF’s strategy targeted 120-day turnaround times, claims have instead taken an average of three years or more. Liabilities sit in limbo, unrecorded and growing.
Charakupa also told Parliament that from 2020 to 2024, newly registered claims dropped by 65% and finalised claims by 58% – which he described as the result of a deliberate effort to sustain an unlawful accounting standard.
The board said the suspensions were made to allow “an independent and unhindered investigation into certain administrative and governance matters within the organisation”.
Read more: Making sense of the Road Accident Fund crisis
In 2022/23, the Auditor-General gave the RAF a disclaimer of audit opinion. Key issues include rising legal costs, matters related to procurement, failure to fill critical vacancies and ensure staff had been properly vetted, and rising legal costs.
The RAF’s liabilities are estimated to exceed R500-billion. The Auditor-General flagged R340-billion in liabilities for 2022/23 alone.
Read more: The R500bn Road Accident Fund accounting question nobody wants to answer
The last time the RAF received a clean audit was for the 2018/19 financial year.
According to the board, interim measures are in place to maintain operations and ensure continuity in all aspects. “The RAF remains committed to sound corporate governance, accountability, and the highest ethical standards in all its operations.”
Last month, Daily Maverick reported how RAF management ditched the government-approved accounting framework in favour of Ipsas 42, an international public-sector standard never sanctioned by National Treasury.
That switch slashed the fund’s stated claims liability from R330-billion to R27-billion, as if cooking the rulebook could change the dish.
The Auditor-General’s office called the manoeuvre “not suitable for our schemes” and warned that liabilities excluded under Ipsas, such as accidents that have occurred but not yet resulted in claims, were effectively being hidden off the books.
Parliament’s probe into the RAF did not stop at the balance sheet. When MPs looked at procurement an equally troubling picture emerged, marked by excess, weak controls and a public institution treating its budget as flexible.
Two marketing contracts with Media Mix 360 and Dzinga Productions were each priced at an eye-watering R500-million over five years. In one year alone the RAF channelled R161-million to Media Mix 360, pushing past its own budget ceiling by 60%.
Then came the invoices. Bucket hats at R11,500 each, branded water bottles for R85. Even RAF spokesperson McIntosh Polela, sitting before MPs, conceded that the numbers “seem exorbitant”.
The pattern extended into the office of former CEO Collins Letsoalo. His security budget, meant to be capped at R480,000 a year, surged to R150,000 a month. The bills included a hired BMW 5 Series and hotel stays for bodyguards – luxuries paid for by a fund meant to support the injured and vulnerable.
DSC Attorneys partner Kirstie Haslam told the committee that the RAF’s woes stemmed not from the Road Accident Fund Act itself but from rampant incompetence.
While parliamentary hearings often do not yield positive outcomes and their recommendations are not binding, committee chairperson Songezo Zibi previously told the publication that the committee would push for strong action against the leaders of the embattled government agency.
The inquiry continues. DM