Africa-Press – South-Africa. Transport minister Barbara Creecy has dissolved the board of directors of the Road Accident Fund (RAF) after ongoing governance and operational challenges that have severely hampered the agency’s ability to fulfil its statutory mandate.
According to the department, on June 5, Creecy issued letters to the 11 members of the board, allowing them to make representations regarding her intention to dissolve the board due to their failure to discharge their fiduciary duties effectively.
National department of transport spokesperson Collen Msibi said the representations were received and considered.
“Consequently, the board has been dissolved. A submission has been prepared requesting the minister of finance to appoint an interim functionary as accounting authority in accordance with the Public Finance Management Act. The proposed appointment is intended to prevent a governance vacuum while a new board is being constituted,” Msibi said.
Msibi said the governance challenges in the agency and concerns that were confirmed through internal oversight and regulatory engagements include the protracted and costly litigation pursued by the RAF on the application of accounting standards, which has resulted in further strain on the entity’s financial resources and capacity.
“The inconsistent and, at times, reckless handling of the suspension of the CEO that attracted a legal challenge and institutional uncertainty. The frequent incurrence of default judgments against the RAF, worsening its contingent liabilities and weakening its financial sustainability. Deep divisions within the board itself, evidenced by most resolutions being passed through the use of casting votes, rather than consensus, reflecting a lack of cohesion in critical decision-making processes,” Msibi said.
He said this also included the failure by the board to fill at least two critical executive positions a chief claims officer and the head of legal.
According to Msibi, this had resulted in the loss of confidence in the board’s ability to run the entity effectively.
Msibi said a draft public advertisement has been prepared to commence the process of appointing a new board, ensuring transparent and merit-based selection in line with applicable legislation.
“To support the development of a sustainable operational and governance model, the minister has initiated the appointment of a panel of independent experts to review the RAF’s business processes and propose actionable recommendations. Members of the panel will be announced in due course.
“Furthermore, a request has been made to the SIU to establish if the current investigation under Proclamation 44 of 2024 covers the events of the past three months and, if not, formally request the expansion of the scope to cover these events. The response from the SIU in this regard is eagerly awaited,” he said.
Creecy has emphasised her department’s intent to finalise the road accident benefit scheme bill, which will introduce a no-fault system to make it easier for road accident victims to access the benefits without costly legal bills.
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