UIF incurs millions in irregular expenditure after flouting procurement rules, Parly hears

The Special Investigating Unit (SIU) has told Parliament that the Unemployment Insurance Fund (UIF) has incurred R6.1 million in irregular expenditure as a result of corruption.

The SIU had investigated the UIF’s Covid-19 awareness campaign, which started in August last year.

This was done in terms of a secondment agreement to review the information relating to the Covid-19 Temporary Employer-Employee Relief Scheme (TERS) payments.

Irregular appointments

Briefing the standing committee on public accounts (Scopa) on Tuesday, SIU’s chief forensic investigator Johnny le Roux revealed that their investigations revealed that the UIF irregularly appointed five companies to conduct the campaign, to the tune of R6.1 million.

“The appointments were based on motivation for sole service providers. So when the investigation commenced, we found that the five service providers were appointed without following any proper SCM [supply-chain management] processes,” he said.

Le Roux said the UIF was required to obtain at least three quotations for all procurement of goods and services not exceeding R500,000, which the institution failed to do so.

So these appointments, the chief investigator further said, were not in compliance with section 217(1) of the Constitution as well as section 51(1)(a)(iii) of the Public Finance Management Act (PFMA).

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“The motivation for the use of sole service provider amounted to a misrepresentation due to the fact that there were several other commercial radio stations registered with Icasa [Independent Communications Authority of South Africa] in the respective provinces.

“Furthermore, the SABC, a state-owned company, was able to deliver the same message through 11 languages.

“One SCM official failed in her duties when she allowed the marketing and communication department to predetermine the names of the service providers.

“This failure resulted in an irregular expenditure for the UIF in the amount of R6.1 million. The recommendations, approval, appointments and the payments of these service providers were therefore in contravention of the PFMA,” he said.

Disciplinary referrals

The SIU, Le Roux added, had since made a disciplinary referral against seven officials.

“Charges have been brought against all officials and five officials were found guilty and received written warnings. [The] two [other] matters are ongoing,” the chief investigator continued to say.

The SIU also made a further two disciplinary referrals, involving the UIF’s chief operating officer, Judith Kumbi, and commissione Teboho Maruping.

“These matters are currently being heard as we speak and our members are testifying,” Le Roux.