Publications
- The High Court has dismissed an urgent application by the Road Accident Fund to prevent the Auditor-General of South Africa from disclosing an audit report.
- After auditing the financial statements of the RAF, the AGSA issued a disclaimer opinion and audit report.
- The RAF changed its accounting policy the AGSA argues this led to understating its liabilities by approximately R300 billion compared to the prior financial year.
The High Court in Pretoria has dismissed an urgent application by the Road Accident Fund (RAF) to prevent the Auditor-General of South Africa (AGSA) from disclosing an audit report about the fund's financial affairs to Parliament or anyone else.
After auditing the financial statements of the RAF, the AGSA issued a disclaimer opinion and audit report. The RAF wants to prevent this from being disclosed pending a review of AGSA's findings.
In April 2021, the RAF changed its accounting policy from the International Financial Reporting Standards (IFRS) to the International Public Sector Accounting Standards (IPSAS). The AGSA argues this led to the RAF understating its liabilities by approximately R300 billion compared to the prior financial year - specifically how it dealt with insurance contracts.
The AGSA claims the RAF's financial statements were not prepared in line with the prescribed financial reporting framework, not supported by proper records, and contained material misstatements regarding liabilities.
READ: Why a simple accounting change may have slashed the Road Accident Fund's liabilities by R300bn
The AGSA claims the RAF is trying to prevent it from reporting the issue to Parliament, therefore undermining the oversight obligations of both Parliament and the Minister of Transport. The AGSA also argues that innocent third parties might suffer potential harm if the audited financial statements of the RAF are not released.
The RAF, in turn, argues that the disclaimer opinion and findings by the AGSA that there is not "sufficient and appropriate evidence for claims liabilities as disclosed in the statements of financial position", would make it practically impossible for the RAF to raise any loans. The RAF further argues that publishing the AGSA's findings will cause irreparable harm and reputational damage.
The RAF could not convince the judge that it would suffer irreparable harm if the AGSA released the audited financial statements. It relies on "mere speculation", the judge found. Consequently, the RAF's urgent application was dismissed.
