Inmates, government employees, dead people, and government-funded students are among the thousands who illegally benefited from the government’s multibillion fund meant to help workers affected by the lockdown.
These were among a litany of potentially fraudulent activities contained in Auditor-General Kimi Makwetu’s report into funds that the Unemployment Insurance Fund (UIF) disbursed to workers affected by lockdown in the form of temporary employment funds (TERs). It has since come to light that the funds have been looted or severely compromised due to negligence and greed.
The UIF has disbursed R41.6billion for the benefit of retrenched workers and those who had salary cuts during the pandemic, with some of it sent to the wrong beneficiaries, including dead people.
Labour and Employment Minister Thulas Nxesi has expressed dismay at the mismanagement of these funds and potential criminality within the UIF.
He announced the suspension of UIF commissioner Teboho Maruping and the entire management over some of the irregularities in relation to TERs. These suspensions will have no effect on the continuation of paying TERs to correct beneficiaries.
Nxesi said he suspended Maruping because the breaches occurred under his watch, including his management team.
“The director-general of the department has suspended the UIF management, the chief financial officer, the chief operating officer, and the head of the supply chain. These moves allow for the Special Investigating Unit to conclude its forensic investigations completely unfettered,” he said.
According to Nxesi, he had earlier called on the UIF to strengthen its financial controls and subsequently invited Makwetu to perform an interim audit to highlight risks and gaps within the institutions.
“We have now received the AG’s reports, which point to numerous gaps, risk and inadequate controls and verification processes. This has resulted in illegal payments, among others, to recipients of state grants, students receiving National Student Financial Aid Scheme payments, public servants, UIF employees, inmates, deceased persons, and miners,” Nxesi said.
He said he noted that there had also been overpayment and underpayment, and he took the numerous breaches seriously.
Delivering his report earlier on Wednesday, Makwetu said a comparison of government databases had uncovered a litany of potentially fraudulent activities due to the weakened systems during the pandemic.
“An opportunity for fraudulent behaviour arises when the disciplines of internal control have been weakened. In this case that is what we have observed,” Makwetu said.
The department’s chief operating officer, Marsha Bronkhorst, has been seconded as the acting commissioner for the UIF.
Nxesi said he had requested the National Treasury to avail technical resources to the UIF to urgently implement Makwetu’s recommendations, which included a further probe of the transactions.
He vowed that all those involved in wrongdoing would be made to account, as every payment would be combed and scrutinised.
He said out private companies implicated in the looting of the UIF would also be brought to book for inflating their TERs claims.
“They also have to answer because you must not think there was rot only inside the department or lack of controls. It takes two to tango. There were people outside in some companies and people inside,” Nxesi said.
The minister, however, defended the failure of the UIF to give a green light to some of the payments as workers complained that their payments were delayed.
“Verifications had to be done. You don’t just pay because people have applied, from both the side of the employers and the employees,” he said.
He gave assurance that the UIF was continuing with payments to TERs beneficiaries, despite the day-long suspension triggered by Makwetu’s report.