Call for intervention in ‘horror show’ at Compensation Fund and UIF

ActionSA on Sunday demanded urgent intervention from the Minister of Employment and Labour Nomakhosazana Meth, following damning audit findings that reveal widespread corruption and mismanagement at the Compensation Fund and Unemployment Insurance Fund (UIF).

Systemic issues with UIF and Compensation Fund

In a statement, the party noted that Auditor-General of South Africa (Agsa) had exposed serious irregularities in the two funds, which manage a combined annual revenue of R46 billion.

“The findings can only be described as a horror show,” said Alan Beesley, ActionSA’s member of parliament.

“The Compensation Fund monies exist to protect and support hard-working South Africans in times of need, yet they have been turned into slush funds for fraud and maladministration.

“The dignity of our nation’s workers is being systematically stripped away by those entrusted to safeguard their welfare,” said Beesley.

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Compensation Fund’s 12-year crisis

The Compensation Fund, responsible for providing compensation to employees for work-related injuries and diseases, has received disclaimer audit opinions for 12 consecutive years.

According to Bulelwa Sikweyiya, a senior audit manager at the Auditor-General’s office, this points to a fundamental breakdown in internal controls.

“At least for about 12 years now, the Compensation Fund has been a disclaimer opinion, and the key issues that we have noted over the years are pointing to a breakdown in the internal controls,” Sikweyiya told MPs during the briefing.

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Financial irregularities and mismanagement

The audit revealed the Compensation Fund’s irregular expenditure stands at R485 million for the 2023/2024 financial year, while fruitless and wasteful expenditure increased to R652 million from R567 million in the previous year.

“Instead of ensuring financial security for injured or unemployed workers, these funds have become breeding grounds for mass looting and impunity,” Beesley stated.

The problems include missing transaction evidence, duplicate payments, fraudulent transactions through altered bank details, and reckless investments in failing start-ups.

Beesley also expressed frustration that the UIF has reportedly failed to submit timely financial statements and received qualified audit opinions for five consecutive years.

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Calls for accountability

“The very institutions meant to offer relief in times of hardship are now robbing workers of their dignity and their right to financial security,” Beesley said.

“The Minister of Labour cannot evade responsibility for this disaster. If she cannot fix this mess, she must go. The political leadership overseeing these funds must be held accountable, not just with words but with real consequences.”

ActionSA is calling on the Auditor-General to exercise the full powers of the Public Audit Act, including issuing certificates of debt against those who have failed to take remedial action.

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