The Unemployment Insurance Fund’s (UIF) commissioner and other senior managers overseeing government efforts to provide relief to millions of workers who lost income due to the Covid-19 pandemic were suspended on Wednesday after the auditor-general uncovered alleged fraud and irregularities in the system.
The payment of benefits under the Temporary Employer /Employee Relief Scheme (Ters), funded by the UIF, had already been hit by problems including backlogs and unauthorised payments, which left workers unable to access much-needed assistance after companies cut jobs or imposed pay reductions.
The scheme was initially supposed to cover three months, from April to June, and was one of the main pillars of President Cyril Ramaphosa’s R500bn relief package to shield workers and protect some economic activity with the country facing the biggest GDP drop since the Great Depression of the 1930s.
But auditor-general Kimi Makwetu found overpayments of more than R84m to 1,183 applicants, underpayments of R251m to 1,700 applicants, along with the invalid rejection of beneficiaries, fraud and double-dipping. Other problems included payments to people below the legal age of employment, and those who were deceased or working for government.
Some claimants who didn’t qualify, such as those already receiving social grants or student funds from the National Student Financial Aid Scheme, were also wrongly paid.
Employment & labour minister Thulas Nxesi said that UIF commissioner Teboho Maruping as well as the fund’s CFO, COO and the head of the supply chain were suspended pending a forensic investigation by the Special Investigating Unit into issues raised by the auditor-general.
Maruping, who has been running the UIF for almost four years, previously defended the fund, saying there were no backlogs with Ters and the fault lay with employers who had not registered their workers properly. He declined to comment on Wednesday and said he wanted to allow processes to take their course.
Employment & labour department COO Marsha Bronkhorst will take up the position of acting commissioner.
The Ters benefit was extended in July for six weeks until August 15, but the opening of applications was delayed because a government directive was not signed and published on time. A source with knowledge of Ters payments said, however, that as of Tuesday there were still no payments made for July and August.
Nxesi said that the UIF had so far disbursed R41.6bn to 9.5-million workers, representing 822,000 employers.
The benefit is expected to be extended again until September 15, after recommendations made at the National Economic Development and Labour Council, because some companies have not yet opened, despite the easing of the lockdown.
Business for SA, a social partner in the Ters process, said it had repeatedly noted deficiencies in the system.
"While we acknowledge that the Ters system was a new and far broader benefit than the UIF had previously had to contend with, we have been disappointed that the institution appeared reluctant to accept pro bono private sector assistance offered in an effort to enhance efficiencies," it said.
It called on the government to put in place an additional level of oversight from outside the department of employment & labour, given that the entire range of shortcomings arose under existing management.
Nxesi said he would ensure that every payment was accounted for, and every wrongdoer made to account.
He said that his department was starting to implement the auditor-general’s recommendations, which included collaborating with other state organs and law enforcement agencies, to investigate every illegal action and risk identified.
The department had also asked the Treasury to deploy technical resources to the UIF to urgently implement the recommendations of the auditor-general.
He said the Treasury was helping to identify service providers to conduct a forensic investigation into the UIF.
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