Minister of Employment and Labour Thulas Nxesi. Picture: Twitter/@SAgovnews
Employment and Labour Minister Thulas Nxesi admitted that the Unemployment Insurance Fund (UIF) needed to strengthen its financial controls.
Nexus addressed the media on Wednesday, shortly after Auditor-General (AG) Kimi Makwetu revealed the first in a series of reports analysing government’s Covid-19 relief fund expenditure.
The AG reported that until the end of July, R37 billion in disbursements had taken place. Nxesi updated the figure after the AG’s briefing to R41.6 billion. This translates to 9.5 million payouts to 822,000 employers.
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“The numerous gaps, risks and inadequate controls and verification resulted in illegal payments to grants, students receiving NSFAS payments, public servants UIF employees, inmates, the deceased and minors,” he explained.
“I take these breaches very seriously,” adding that there is clear evidence of overpayments, underpayments and inflated claims.
He said the department was already implementing recommendations of the AG on the UIF in collaborating with the State to investigate every illegal action and risk.
On 24 August, Nxesi said the Special Investigating Unit (SIU) launched a “rapid financial audit” into the AG’s findings. The department and the UIF are working through the fusion centre to close the gaps and eliminate risks, he said.
The centre will speed up prosecutions relating to fraud and corruption during Covid-19. It is made up of the Hawks, the SIU and the Financial Intelligence Centre make up the centre, as well as the Competition Commission and the Public Protector.
He said National Treasury was also assisting the department’s deputy-general Thobile Lamati to conduct forensic investigations into the overall workings of the UIF and the Compensation Fund.
38 court cases have been opened and charges laid after the AG’s findings, and after “suspicious transactions” were flagged by the UIF’s risk management unit. Some cases are already before the courts, and some perpetrators have been sentenced.
Due to the UIF’s transgressions, Nxesi said the commissioner, Teboho Maruping has been suspended. The labour department’s COO, Marsha Bronkhorst, is now the acting UIF commissioner.
Lamati has also suspended the entire UIF management team, including the CFO, COO and head of the supply chain, “to allow the SIU to conclude its forensic investigations completely unfettered”.
A complete audit of all Covid-19 Ters benefit payments will take place this month, as per an agreement with the National Economic Development and Labour Council (Nedlac).
In addition, Nxesi confirmed that after a recommended extension of Ters payments, the relief scheme will be extended to September. This after assurances that the country can afford to continue supplementing payments for employers and employees during the pandemic.
The extension seeks to assist companies and sectors that still have not opened or have just reopened due to lockdown.
