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The Minister of Employment and Labor Thulas Nxesi during a press conference.
- The business executive of the Auditor General’s office Nnana Sekoati said the audit found alarming gaps in the preventive controls of the scheme.
- Minister Thulas Nxesi said there was evidence that overpayments, underpayments and inflated claims still needed to be proven in the payment system.
- The audit found applications below the legal working age, payments to invalid identity numbers, as well as payments to deceased and imprisoned South Africans.
The Office of the Auditor General told Parliament’s Employment and Labor Portfolio Committee that the Unemployment Insurance Fund’s Temporary Assistance Plan for Employers and Employees was riddled with gaps that cause the fund to miss out on paying large sums of money through irregular payments.
The TERS relief was developed by the government as a central intervention to assist companies and their employees during the Covid-19 pandemic and the national shutdown, allowing companies to continue paying their employees through restrictions on operations. during closing.
President Cyril Ramaphosa directed Auditor General Kimi Makwetu to audit the transactions of the various government interventions in the pandemic, including the FIU TERS in July. Makwetu found benefit overpayments and a large number of payments that required further investigation.
The Minister of Employment and Labor, Thulas Nxesi, announced on Wednesday that he placed the commissioner of the Unemployment Insurance Fund, Teboho Maruping, and the management of the FIU, on provisional suspension following the audit and its findings.
The business executive of the Auditor General’s office, Nnana Sekoati, told the committee Friday morning that the audit found alarming gaps in preventive controls, including that the system allowed a single applicant to file claims on behalf of multiple employers or boards. negotiation.
“The FIU does not corroborate whether these representatives are duly authorized to represent the employers or negotiating councils that they intend to represent.
“There were also no proper system validations of the input data submitted by employers and bargaining councils as the basis for payment of claims to avoid the processing of ineligible and invalid claims,” Sekoati said.
Dead, incarcerated, double dip
Sekoati said the audit also found incorrect system calculations of the TERS benefit payment for the first lockdown period, as well as inadequate verification of employer details, bank details and verification of wages.
“For payments that were made between March 27, 2020 and April 30, 2020, the system used a standard lockout period of 35 days to calculate the benefit amount, even when the inactivity period indicated by the employer it was less than 35 days. As a result, the FIU overpaid for some of the claims that were processed during this period, “he said.
The audit also found applicants who are below the legal working age, duplication of identity numbers, payments to invalid identity numbers, as well as payments to deceased and imprisoned South Africans.
“Individuals under 15 years of legal age to work were paid by the FIU. A total amount of R224,677 was paid for 53 applications for the period to June 30, 2020. A claim of R 4,027 was paid to one person. than the same identity number as a FIU employee.
“Individuals who were listed as deceased according to the Home Affairs database received TERS benefits totaling R441,144. A total amount of R169 900 was paid to people who were indicated to be in prison according to the database of the Department of Correctional Services, “he said.
The audit also found applications with the same bank details as some FIU employees. Found double dip with R140 556 822 paid to 35,043 applicants who received benefits from other state institutions, including the National Financial Aid Plan for Students and the National Defense Force.
Nxesi told the committee that there is evidence that overpayments, underpayments, and inflated claims still need to be proven in the payment system. He said the department was working with law enforcement agencies, such as the Special Investigation Unit, to investigate them, in accordance with the Auditor General’s recommendation.
