The Road Accident Fund (RAF) faces a setback as the Gauteng High Court dismisses its case against the Auditor General of South Africa (AGSA) regarding the legality review of the AGSA’s disclaimer audit opinion of the 2020/2021 audit report. The ruling, delivered on April 19, 2024, has left the RAF expressing concern and disappointment.
In a detailed judgment, the court asserted that the RAF does not operate in pursuit of the social policy objectives of the government, contradicting the RAF’s classification as a social benefit fund. This decision contradicts directives issued by the Financial Services Board, which explicitly recognize the RAF as a public entity fundamentally serving as a social security fund.
Moreover, the court referenced legal standards and guidelines, emphasizing the importance of deferring to administrative expertise in matters of policy. However, the RAF contends that the court overlooked critical facts and misdirected itself by disregarding expert classifications and statutory authority.
One significant omission noted by the RAF was the court’s failure to acknowledge a clarification letter from the Accounting Standards Board, which highlighted the inappropriateness of using IPSAS 42 in RAF accounting policies. The letter stressed the need for accounting policies to provide relevant and reliable information to users of financial statements, indicating that IPSAS 42 was not applicable.
The RAF further raised concerns about the court’s failure to address the 17 grounds of review presented by the Fund. This oversight led the RAF to question the rationality and legality of the court’s decision, prompting consideration of launching a leave to appeal.
The dismissal of the RAF’s case marks a significant development in the ongoing legal dispute between the Fund and the Auditor General. As the RAF evaluates its next steps, the implications of this ruling on the Fund’s operations and financial accountability remain to be seen.
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