Law Enforcement Probes Covid-19 Relief Fund Management

Law enforcement agencies are working together to probe the breaches of the COVID-19 Temporary Employee/Employer Relief Scheme (TERS) in South Africa.

The benefit scheme was established to provide much needed relief to employees, who have been laid-off work or unable to earn an income due to the COVID-19 pandemic.

In his first special audit report on the scheme, the Auditor General (AG), Kimi Makwetu, identified numerous gaps, risks and inadequate controls and verification processes.

“This has resulted in illegal payments, amongst others, to recipients of other State grants, students receiving National Student Financial Aid Scheme (NSFAS) payments, public servants, and even inmates, deceased persons and minors.

“There is also evidence of overpayments and underpayments, as well as inflated claims. I take these breaches very seriously,” the Minister of Employment and Labour, Thulas Nxesi, said on Wednesday.

Nxesi was briefing media on the findings of the AG report in relation to the COVID-19 TERS Relief Fund audit.

“The AG has recommended that in each instance, the Unemployment Insurance Fund (UIF) and the department collaborate with other State organs and law enforcement to investigate every illegal action and risk identified.

“In terms of COVID-19 TERS benefits, R41.6 billion has been disbursed in 9.5 million payments to laid-off workers, representing 822 000 employers.

“These benefits have supported millions of laid-off workers and their families, and injected cash into local economies,” said Nxesi.

The AG’s report noted that R37 billion had been disbursed by the end of June.

During the State of Disaster, normal UIF payments of R5.9 billion went out to over one million claimants.

The Minister said the COVID-19 TERS benefit payments represented a massive increase in the mandate and upscaling of the operations of the UIF.

Fusion Centre

On 24 August 2020, the Special Investigative Unit (SIU) launched a rapid forensic audit into the AG’s findings on the UIF, with a view of recovering monies illegally paid and charging the perpetrators.

“The department and UIF have worked through the Fusion Centre with other government departments, agencies and databases to close gaps and eliminate risks.

“The Fusion Centre is a combination of law enforcement agencies, which is intended to speed up investigations and prosecution of COVID-19 related fraud and corruption cases,” the Minister said.

It consists of the Financial Intelligence Centre, Independent Police Investigation Directorate, the National Prosecuting Authority, the Directorate for Priority Crime Investigation, the Special Investigative Unit and the State Security Agency.

“We have requested National Treasury to deploy technical resources to the UIF to urgently implement the recommendations of the AG and to develop system solutions for identified gaps and risks,” the Minister said.

In addition, National Treasury is assisting the Director-General of the Labour Department to identify service providers to conduct a forensic investigation into the overall workings of the UIF.

“We will also be looking into the workings of the Compensation Fund. Some 38 court cases have been opened, and charges laid against perpetrators – drawing on evidence from the AG’s findings, as well as from suspicious transactions picked up by the UIF’s own Risk Management Unit,” the Minister said.

Some of these cases are already before the courts, and the perpetrators are in jail.

Suspension of UIF Commissioner

“I await the outcomes of these various processes, before announcing further action against individuals and entities. The Auditor-General has now released publicly the final first special audit report into COVID-19 government expenditure – including UIF Covid19 TERS transactions – indicating serious risks and violations.

“In light of this, and because this occurred on his watch, this morning, I suspended the UIF Commissioner [Teboho Maruping],” the Minister said.

The Director-General of the Department of Employment and Labour has also suspended UIF senior management: the Chief Financial Officer, Chief Operating Officer and Head of Supply Chain.

“These moves allow for the SIU to conclude its forensic investigation, completely unfettered. This is not the end of the matter.

“The complete audit of all COVID-19 TERS benefit payments, as agreed with all social partners at the National Economic Development and Labour Council (Nedlac), commences this month. Beyond that, the AG will have a second bite in terms of the annual statutory audit for 2020/21.

“I assure you that I will not rest until every payment is accounted for, and every wrong-doer made to account,” the Minister said. – SAnews.gov.za