Overview of the Performance of the Road Accident Fund in 2012/13 Portfolio Committee of Transport - PowerPoint PPT Presentation

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Overview of the Performance of the Road Accident Fund in 2012/13 Portfolio Committee of Transport. 10 0ctober 2013. Purpose. The purpose of this presentation is to present an overview of the performance of the Fund in 2012/13… Background information Where the business is:

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Overview of the performance of the road accident fund in 2012 13 portfolio committee of transport

Overview of the Performance of the Road Accident Fund in 2012/13Portfolio Committee of Transport

  • 10 0ctober 2013


Purpose

Purpose

  • The purpose of this presentation is to present an overview of the performance of the Fund in 2012/13…

  • Background information

  • Where the business is:

    • Status at the end of 2012/13

    • Highlights in 2012/13

    • Challenges

    • Annual Performance Plan

    • Auditor-General

  • Where the business needs to go:

    • Strategic framework

    • Operational targets for 2013/14

    • Priorities for 2013/14


Background

Background…

  • Road Accident Fund Act, 1996 (Act No. 56 of 1996) & RAF Amendment Act, 2005 (Act No. 19 of 2005)

    • “Payment of compensation in accordance with this Act for loss or damage wrongfully caused by the driving of a motor vehicle”

    • Provide compulsory cover to all users of South African roads against injuries sustained or death arising from accidents involving motor vehicles within the borders of South Africa

  • Constitutional Court Rulings and legal precedents have shaped the mandate

  • National public entity (Schedule 3A of the PFMA)

  • Corporate and Statutory Form


Background1

Background…

  • Business Model

Revenue

Grants & investment revenue

Levy on fuel

Fuel sold

Road Activity

Financial Position

Administrative costs

Number & severity of accidents

Volume of claims

Third party costs

Value of claims

Cost


Background2

Background…

  • Business Process


Background3

Background…

  • Physical

    • Head office in Centurion

    • Five regional processing centres

      • Pretoria, Johannesburg, Durban, East London and Cape Town

    • Customer service centres

      • Nelspruit

      • Mafikeng, Bloemfontein, Polokwane and Kimberley

  • Virtual

    • Call centre (0860 23 55 23)

    • Web (www.raf.co.za)

    • Twitter (@RAF_SA)

    • Facebook (www.facebook.com/#!/RoadAccidentFund)

  • Service Infrastructure


Background4

Background...

  • South Africa...Roads…Vehicles...Transport...Crashes...Death & Injuries...Consequences!

  • 70 year funding regime driven by an “accessible” revenue stream

    • Moved from protecting a wrongdoer from being sued to supporting victims

  • Compensation is fault-based and fault must be proven or excluded

    • Rulings and Orders are not always consistent

    • Great deal of subjectivity

  • Micro-economy has been created and is sustained by the RAF

    • Lawyers, Advocates, Assessors, Experts etc

    • Contingency fees charged in excess of 25%

  • 50% of matters on the Court roll relate to road accidents

  • Claimants are often not the primary beneficiary

  • Operational Context


Background5

Background...

  • Social Context


Background6

Background...

  • The RAF carries an extensive legacy, partly true and partly perceived, which was built over many decades

    • Compensation scheme that has not had revenue and expenditure aligned

    • ‘Insolvent and bankrupt’ for 31 years as a result of a provision for claims incurred

    • A “lawyers” business

    • Intensely bureaucratic

    • Inefficient, uncaring and impersonal

    • Fraught with fraud

  • The Board and management committed in 2012 to create a new legacy, one of delivering services efficiently and effectively to victims of crashes who need the support

  • Early signs of change are visible...

  • Unfortunate legacy


Purpose1

Purpose

  • The purpose of this presentation is to present an overview of the performance of the Fund in 2012/13…

  • Background information

  • Where the business is:

    • Status at the end of 2012/13

    • Highlights in 2012/13

    • Challenges

    • Annual Performance Plan

    • Auditor-General

  • Where the business needs to go:

    • Strategic framework

    • Operational targets for 2013/14

    • Priorities for 2013/14


Where the business is

Where the business is…

  • Financial indicators


Where the business is1

Where the business is…

  • Status at the end of 2012/13

  • Historical Review


Where the business is2

Where the business is…

  • Status at the end of 2012/13


Where the business is3

Where the business is…

  • Status at the end of 2012/13


Where the business is4

Where the business is…

  • Status at the end of 2012/13


Where the business is5

Where the business is…

  • Status at the end of 2012/13


Where the business is6

Where the business is…

  • Status at the end of 2012/13


Where the business is7

Where the business is…

  • Status at the end of 2012/13


Where the business is8

Where the business is…

  • Status at the end of 2012/13


Where the business is9

Where the business is…

  • Status at the end of 2012/13


Where the business is10

Where the business is…

  • Status at the end of 2012/13


Where the business is11

Where the business is…

  • Status at the end of 2012/13


Where the business is12

Where the business is…

  • Status at the end of 2012/13


Where the business is13

Where the business is…

  • 2012 was “The Year of the Customer”

  • Road Accident Fund (Transitional Provisions) Act, 2012 enacted on 13 February 2013

  • Supreme Court of Appeal inLebeko and Duma confirmed that it is not for the court to determine whether the injury is serious  

  • High Courts declaredso-called “common law” contingency fee agreements that do not comply with the Contingency Fees Act, 1997 invalid

  • RAF on the Road in 15 communities, serviced more than 8 000 claimants and settled R102 million

  • Nelspruit office was established and is fully operational (North West, Northern Cape, Limpopo and the Free State)

  • Streamlined business processes designed, documented and implemented

  • New organisational structure designed and implemented

  • Quicker turnaround times for the settling of claims recorded

  • The average number of capital (or compensation) payments and finalisations per claims handler improved

  • Highlights in 2012/13


Where the business is14

Where the business is…

  • SOP for the management of writs of execution developed and implemented

  • Full review of all claim files was undertaken and the staging of all open claims is now known

  • Contract and bid templates developed to ensure efficient tender processes

  • Various regulations to the Act were published

  • Risk management methodology and systems reviewed, evaluated and changed successfully

  • Numerous internal audit findings resolved and the final audit is “Clean”

  • Fund achieved 86% of APP targets (53% in 2011) (70% against original APP)

  • Highlights in 2012/13


Where the business is15

Where the business is…

  • The number of outstanding claims

    • Enhanced activity, assessed business processes and enhanced claims processing capacity

    • Structured block settlements were held

    • Management of the panel of attorneys was improved

  • The growing liability for claims incurred

    • Improved claims processing and finalisation

    • Curtailed the re-opening of claims

    • Introduced quarterly actuarial appraisals

  • The large amounts of money spent on legal costs

    • Management implemented new processes in the claims environment

    • Litigation units established in each of the regional offices

    • Presence maintained in Courts

  • The settlement of direct claims

    •  Marketing yielded great demand

    • Capacity has been enhanced

    • New business processes put in place

  • Challenges attended to


Where the business is16

Where the business is…

  • APP Performance in 2012/13

* Target partially achieved – (1) Number of claimants engaged at road shows per annum and (2) Achieve / exceed Employment Equity target of 90%

**Target not achieved - Relates to 5% reduction in the deficit


Where the business is17

Where the business is…

  • Opinion

    • The financial statement present fairly, in all material respects, the financial position of the Road Accident Fund as at 31 March 2013

  • Emphasis of the matter

    • My opinion is not modified in respect of this matter

    • Going Concern

      • Accumulated deficits of R51 587 567 and that the public entity’s total liabilities exceeded its total assets by R51 463 953 as at 31 July 2013

  • Predetermined objectives

    • There were no material findings on the annual performance report concerning the usefulness and reliability of the information

  • Compliance with laws and regulations

    • I did not identify instances of material non-compliance with specific with specific matters in key applicable laws and regulations

  • Internal control

    • I did not identify any deficiencies in internal control which i consider sufficiently significant for inclusion in this report.

  • Annual audit by the Auditor-General


Purpose2

Purpose

  • The purpose of this presentation is to present an overview of the performance of the Fund in 2012/13…

  • Background information

  • Where the business is:

    • Status at the end of 2012/13

    • Highlights in 2012/13

    • Challenges

    • Annual Performance Plan

    • Auditor-General

  • Where the business needs to go:

    • Strategic framework

    • Operational targets for 2013/14

    • Priorities for 2013/14


Where the business needs to go

Where the business needs to go…

  • Strategic framework


Where the business needs to go1

Where the business needs to go…

  • The Fund has succeeded in aligning its strategic and operational targets

    • The strategic plan’s targets tie back to the four strategic objectives

    • Targets contained within the Strategic Plan flow to the APP and then onward to Executive and employee scorecards

  • For 2013/14 there are 25 performance targets which are clearly defined in the APP

  • Operational Targets for 2013/14


Where the business needs to go2

Where the business needs to go…

  • Strategic priorities

    • Implement the APP successfully

    • Ensure that new targets are timeously attended to

  • Operational priorities

    • Build on the enhanced brand and market presence

    • Ensure optimal capacity ~ numbers and performance measures

    • Maintain efficient operational ~ processes and costs

    • Improve claim processing ~ turn around times, process adherence and volumes

    • Prioritise direct claims ~ staff numbers and process adherence

    • Improved litigation management (Panel of Attorneys and Court case flow)

    • Improve data collection, analysis and reporting

    • Roll out the national customer service footprint and RAF spatial plan

    • Procure claim administration services

    • Implement the claim system enhancements

  • Priorities for 2013/14


Conclusion

Conclusion

  • RAF has not been in ‘the best of places’

    • Challenges, weaknesses and risks were entrenched and often long-standing

  • Change is taking place and there is growing recognition of the Fund’s mandate and contribution

    • Great effort is and will continue being placed on:

    • Fulfilling the strategic objectives

    • Addressing the challenges and risks

    • Providing efficient support to the victims of road accidents

    • Preventing the catastrophic socio-economic effects of accidents in our society

  • 2013 is the RAF’s “Year to Shine”


Thank you

Thank You


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