The auditor-general has found significant issues with government’s Covid-19 relief fund for workers, which resulted in overpayments, underpayments, the invalid rejection of beneficiaries, fraud and double-dipping.
Auditor-general Kimi Makwetu, who released the findings of his office’s Covid-19 relief funds audit on Wednesday, said that through analysing the payment data and checking the beneficiary information against other government databases, a high number of payments were flagged that required investigation.
These included payments to people below the legal age of employment, who were deceased, those working for government, and those receiving social grants or student funds from the National Student Financial Aid Scheme.
The payment of the Temporary Employer/Employee Relief Scheme (Ters) grants, which was meant to help workers affected by the lockdown, has been hit by a number of issues which resulted in backlogs and people not being paid or having to wait months for their money.
However, throughout the process, the Unemployment Insurance Fund (UIF) had been adamant that there were no backlogs in paying the benefit and that the fault for employees not being paid lay at the feet of their employers.
Business Day reported earlier on Wednesday that UIF commissioner Teboho Maruping was placed on precautionary suspension following the auditor general’s report.
Makwetu said in the first lockdown period, from March 27 and April 30, the system implemented for Ters had incorrectly calculated benefits which resulted in significant overpayments.
He said this information was given to the UIF, with lists extracted from its database, and it was asked to give the auditor-general an explanation and whether the fund begins to recover overpayments.
Poor input and validation controls on the new system and a manual claim submission process used in the first two weeks of implementation further heightened the risk of invalid or manipulated claim information.
According to the report there were overpayments of R84,228,713 to 1,183 applicants, while the UIF used the incorrect number of days to calculate payments to 723 applicants amounting to R10,215,765.
Some claimants were paid less than the claims amount due based on the information on the system, totalling underpayments of R250,919,657 for 1,700 applicants and an employer was paid three times for the same application, which totalled R597,456.
The auditor-general did recalculations of claims and reconciliations with payment data and identified the overpayments and underpayments, duplicate payments and discrepancies such as approvals for payments made before the date of application.
Makwetu said scrutiny of the UIF’s IT systems had assisted his office.
“You can’t ask for something like this and someone gives you a report, you can only identify it when you go in there ... and pick it up yourself, [and] ask the questions, and if there is a plausible explanation for it you then settle for whatever that is; if not you push ahead and not accept that there are overpayments that cannot be explained,” he said.
“A compromised internal control environment does not only create an opportunity for people in the external environment to [chance their luck], it also creates a chance for those internally who process those transactions to fiddle around because they know the scrutiny that comes with the normal systems of internal control is not in place.”
With regard to payments made up to June 30, the auditor-general found that:
- A total of R224,677 was paid to 53 applicants under the age of 15.
- R4,027 was paid to an individual with the same ID number as a UIF employee.
- R441,144 was paid to deceased individuals.
- R169,900 was paid to individuals in prison.
- A total of 4,161 payments amounting to R30,071,248 were made to people with invalid ID numbers.
- A total of R685,846,671 was paid to 166,619 applications relating to foreign nationals whose employers had not paid contributions for them for the past 12 months (the UIF did not confirm whether these non-SA citizens were possibly refugees or had valid work permits).
- A total of R140,556,822 was paid to 35,043 applicants who received benefits from other state institutions (including remuneration in some instances).
- Four applicants with the same banking details as UIF employees were paid R14,614.
- Twelve people who shared the same banking details were paid R53,971.
- A total of R14,210,866 was paid to people who received payments on claims submitted for both normal UIF benefits and Ters.
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