Africa-Press – South-Africa. Auditor
General Tsakani Maluleke has written to National Assembly Speaker Nosiviwe
Mapisa-Nqakula, telling Parliament that she submitted the Road Accident Fund’s
(RAF) audit report for the 2020-21 financial year, despite the fund going to
great lengths to prevent its publication.
However,
Minister of Transport Fikile Mbalula said in his own letter that he could not
table the RAF annual report and financial statements, because of changes in the
entity’s accounting policy where it relates to claims liabilities.
In
June last year, the RAF announced that it cut its
liabilities by over R300 billion by
simply changing an accounting policy.
The
change dealt with the International Financial Reporting
Standards (IFRS) the RAF was using, specifically how it dealt with insurance
contracts.
But
in her letter to Nqakula, Maluleke said her office evaluated the change in
accounting policy and concluded that it was inappropriate.
In
February the North Gauteng High Court in Pretoria dismissed a case by the RAF
to prevent the publication of the audit report.
Road Accident Fund loses urgent bid
to prevent publication of Auditor-General report
“RAF
has embarked on a litigation process to prevent me from making this audit
report public and seeking an order to set aside my audit report. The first part
of the order seeking an interdict to prevent me from making the audit report
public, was heard and dismissed by the Gauteng High Court,” said Maluleke.
Maluleke
said the RAF applied for leave to appeal that judgment and sought to review the
audit report in what she says has been a protracted, delayed process.
“At
the date of signing this correspondence, I am advised that there is nothing in
law preventing me from publishing the audit report, if not tabled by the
executive authority,” Maluleke said.
The
submission of an annual report complete with financial statements and an audit
report is a legal requirement for organs of state in terms of the Public
Finance Management Act within the conclusion of that annual report’s respective
year by the end of March. The tabling of the final report in Parliament is done
by the minister, as a member of the legislature.
Citing
the PFMA read with the Public Audit Act (PAA), Maluleke said if an audit report
is not tabled in Parliament within a month after its first sitting after an
Auditor General submits it, the Auditor General must promptly publish the
report.
She
said she wrote to RAF management indicating to them that the PFMA and PAA
required her to release the audit report, to which RAF management replied that
they had already written to Parliament explaining the reasons for the delay.
“I
noted the response from the executive authority, however, the PAA requires me
to publish the audit report if not tabled and I am advised that I do not have a
legal basis for not publishing the audit report.
“As
such, I will not be exercising the discretionary powers to issue a special
report on the delay as stated in section 65 of the PFMA as there is no legal
basis for the delay. More so since the court has stated that there is no basis
for the audit report not to be made public,” said Maluleke.
Why a simple accounting change may
have slashed the Road Accident Fund’s liabilities by R300bn
However,
Minister of Transport Fikile Mbalula wrote in his own letter to the speaker
that the RAF advised him that it was unable to comply with the PFMA to submit
its annual report and audited financial statements to him for tabling in
Parliament.
“The
Accounting Authority contends that the dispute with the Auditor-General,
currently before the courts, has a material effect on its ability to meet the
requirements of section 55 of the PFMA.
“Section
55 of the PFMA requires that the annual report and financial statement tabled
before Parliament must fairly present the state of affairs of the public
entity, its business, its financial results, its performance against
predetermined objectives and its financial position as at the end of the
financial year concerned. In the light of the above, I am therefore unable to
table the annual report, annual financial statements, and the audit report of
the Road Accident Fund at this stage,” said Mbalula.
Mbalula
maintained that a review application was before the courts and that “the
outcome may materially affect the content and the conclusions of the
report”.
The
RAF has been hit with financial and governance challenges over the years, with
only one clean audit in the last five financial years. Its 2020-21 audit
outcomes are unaccounted for as the audit could not be finalised.
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