/Covid-19 relief will be audited, warns labour minister as he vows fraud crackdown | Fin24

Covid-19 relief will be audited, warns labour minister as he vows fraud crackdown | Fin24

Labour minister Thulas Nxesi during a media briefing. Photo: GCIS

Labour minister Thulas Nxesi during a media briefing. Photo: GCIS

  • Minister of Labour and Employment Thulas Nxesi told MPs the UIF was working on detecting instances of fraud.
  • If necessary, forensic audits will be conducted.
  • Nxesi said while the UIF projected that R40 billion would be disbursed in the Covid-19 dispensation, the disbursements are likely to surpass that figure. 
  • Nxesi said since the national lockdown started, the UIF paid out R28 billion in Covid-19 TERS benefits, covering 520 000 employers and six million laid off employees.

The Unemployment Insurance Fund will crack down on criminals intent on fraudulently claiming Covid-19 support, Members of Parliament heard on Friday. 

Briefing a joint meeting of the Portfolio Committee on Employment and Labour and the Select Committee on Trade and Industry, Minister of Labour and Employment Thulas Nxesi told MPs that the UIF was in the process of putting mechanisms together to find, investigate and report instances where criminals defrauded its Covid-19 support mechanism.

The briefing comes as the UIF prepares to pay out the last of its Covid-19 temporary employer-employee relief scheme (TERS) benefits to employers of laid off workers that have not previously contributed to the UIF system.

It also follows another briefing the UIF gave Parliament a week ago on the state of the UIF system during the pandemic.

The UIF and Nxesi told MPs that June would be the last of the Covid-19 payments. Nxesi acknowledged that, while the UIF projected that R40 billion would be disbursed by the UIF in this Covid-19 dispensation, the disbursements are likely to surpass that figure by the end of the month.

Nxesi said since the national lockdown started, the UIF paid out R28 billion in Covid-19 TERS benefits covering 520 000 employers and 6 million laid off employees. However, he said, this did not come without challenges and the UIF had to roll out new systems unexpectedly.

Expect audits, Hawks standing by

“There were certainly challenges in implementing the policies which called for the UIF to be revamped and for changes in procedures which were never designed to meet the scale of this kind of operation,” said Nxesi.

Nxesi said the department and UIF worked with business formations and and labour in the National Economic Development and Labour Council to inform the fund’s process in bulk disbursements. 

He explained: 

“From the beginning the department was aware of the risk of fraud in the system in the Covid-19 TERS benefit system so we had to make sure that we could account for every rand. We will support you and your workers, but when this is over you will be audited.”

Nxesi said the UIF and the department were working to prevent double payments, accurately capture banking details and strengthen passwords he said a probity company would conduct analytics on all suspicious transactions within a turnaround time of 10 days.

Nxesi warned: 

“Fraud will not go undetected. A forensic specialist will be appointed. We will work with the Hawks to ensure speedy investigations and recourse. If transactions need forensic auditing, we are ready for that.”

UIF commissioner Teboho Maruping said R2.5 billion was paid to ordinary beneficiaries that are not on the Covid-19 TERS beneficiary system. Among other fraud cases being investigated, Maruping said one company tried to lodge a case with the information of 35 employees who were deceased.

“When a company applies, we rely on that company to give us information, but we will also cross check that information with entities such as SARS and the banks,” Maruping said.

Maruping said 16 cases of fraud were concluded out of the 70 cases of fraud the UIF found. 

UIF chief operations officer, Judith Kumbi, said the fund had to develop the Covid-19 system on short notice in the middle of March and had to get the system to work in the middle of April.

“It means you have to constantly go back and look at our controls when we see instances of fraud or attempts at fraud and while rolling them out, you need to monitor these controls to see what can be done better,” said Kumbi.

Democratic Alliance MP Michael Bagraim said the UIF had a duty to improve its system, adding that he was receiving 250 emails a day saying that the UIF was “failing the businesses and workers of South Africa”.

DA MP Michael Cardo asked how much in Covid-19 TERS benefits is forecast to have been paid by the time that the final payments are made. Nxesi acknowledged that the UIF would likely surpass projected disbursements but did not give a specific figure.

Original Source