Motor Vehicle Accident Fund still in the red

THE Motor Vehicle Accident Fund (MVA) has no money.

It has, for the past several years, relied heavily on loans to stay afloat and to pay rising claims from people involved in car crashes. Auditor General Junias Etuna Kandjeke’s latest report on the MVA shows that the Government institution was in the red to the tune of N$28,6 million by March 2003 – the end of the financial year.Fuel levy income was not sufficient to cover compensation payments, resulting in a depletion of cash resources, says the report.At the year-end, expenditure had been financed by short-term borrowings, Kandjeke said in the 2003 financial report.Similar remarks were made in the 2002 report of the Auditor General.The 2003 deficit was N$20 million lower than in 2002, when the MVA recorded a negative balance of N$58,5 million.In 2001, the deficit was about N$20 million.The organisation has also seen a substantial drop in its balance sheet.For 2003, assets as well as equity and liabilities dropped to N$8,4 million from N$34,8 million the previous year and N$93,9 million in 2001.The fund was unsustainable unless something changed dramatically, a concerned official at the MVA said.Fuel levies and other income was not enough to cover the increasing claims.Motor accident claims had far outstripped the 12 per cent annual fuel levy increase over the past several years, the report indicated.The fund had received N$25,5 million from fuel levies in 2003, compared to N$17,3 million the year before.Last year, the fund’s administrator, Ingenesia Koujo, insisted that the MVA was in perfect financial health.Koujo said that like other institutions the fund was borrowing and could not be regarded as experiencing a crisis.But insiders said the deficit could grow to levels that might force Government to chip in and help pay for the backlog.Auditor General Junias Etuna Kandjeke’s latest report on the MVA shows that the Government institution was in the red to the tune of N$28,6 million by March 2003 – the end of the financial year. Fuel levy income was not sufficient to cover compensation payments, resulting in a depletion of cash resources, says the report. At the year-end, expenditure had been financed by short-term borrowings, Kandjeke said in the 2003 financial report. Similar remarks were made in the 2002 report of the Auditor General. The 2003 deficit was N$20 million lower than in 2002, when the MVA recorded a negative balance of N$58,5 million. In 2001, the deficit was about N$20 million. The organisation has also seen a substantial drop in its balance sheet. For 2003, assets as well as equity and liabilities dropped to N$8,4 million from N$34,8 million the previous year and N$93,9 million in 2001. The fund was unsustainable unless something changed dramatically, a concerned official at the MVA said. Fuel levies and other income was not enough to cover the increasing claims. Motor accident claims had far outstripped the 12 per cent annual fuel levy increase over the past several years, the report indicated. The fund had received N$25,5 million from fuel levies in 2003, compared to N$17,3 million the year before. Last year, the fund’s administrator, Ingenesia Koujo, insisted that the MVA was in perfect financial health. Koujo said that like other institutions the fund was borrowing and could not be regarded as experiencing a crisis. But insiders said the deficit could grow to levels that might force Government to chip in and help pay for the backlog.