- According to the SIU, fraudulent requests for Covid-19 assistance have been made by up to 6,000 government employees.
- The SIU was giving Parliament’s Standing Committee on Public Accounts a virtual briefing on its investigation into irregular payments from the TERS fund during the pandemic.
- UIF TERS was intended to help South Africans who could not work due to the Covid-19 lockdown.
At least 6,000 employees from 24 government departments have received payments from the Temporary Assistance to Employers and Employees (TERS) Program of the Unemployment Insurance Fund (UIF), the Special Investigation Unit said on Wednesday ( SIU).
In another case, a single individual submitted more than 6,000 requests for a company in which he was the only registered employee.
Payments were also made using the identification numbers of prisoners or deceased persons.
The SIU was giving Parliament’s Standing Committee on Public Accounts (Scopa) a virtual briefing on its investigation into irregular fund payments during the pandemic.
The SIU’s submission to the Finance Oversight Committee highlighted a total of over 300 cases in the investigation that were finalized and 80 that were referred for criminal investigation.
More than R 23 million have been recovered so far.
But SIU chief investigator Johnny le Roux said the UIF’s scale of total payments involved millions of beneficiaries, millions of employers and billions of rand in payments, which means that the investigation of the transactions would take a long time.
âDuring the investigation period, a total of 13.4 million employees received TERS payments or UIF benefits. These employees were related to 1.1 million businesses or employers. A total of R57.3 billion has been disbursed by the UIF since [the] creation of the regime, âsaid Le Roux.
The SIU investigation found that at least 6,000 employees were identified in 24 national or provincial ministries with the help of the Ministry of Civil Service and Administration, Le Roux said.
In addition, seven inmates had received TERS payments. These were linked to foreign nationals who used the identity numbers of incarcerated people for claims, he said.
UIF TERS was intended to help South Africans who could not work due to the Covid-19 lockdown. It was announced at the start of the pandemic as a mechanism to allow companies whose operations have been restricted due to the pandemic to pay their employees.
But the system has been abused, facing fraud from both businesses and government employees.
The abuses included claims paid to unqualified claimants, businesses making claims while continuing to operate, claims made with ID numbers of prisoners or deceased persons, or payments to government employees.
The Office of the Auditor General reported significant deficiencies in the system and an investigation was initiated.
Collect the money
Updating Scopa on the investigation, lawyer for SIU CEO Andy Mothibi said the unit was working with the South African Police Service (SAPS) on criminal investigations and firing them for prosecution .
In some cases, the unit has recovered funds in civil litigation.
Le Roux said that in a case where an employer admits receiving inappropriate payments from the UIF TERS, an acknowledgment of debt (AOD) process would become a form of civil litigation, as it was more cost effective than lawsuits.
âAn AOD is a form of litigation by the SIU to expedite collections from employers and employees. This is a more cost-effective collection process, and the money goes directly into the SIU trust account, which is then transferred to the UIF, âhe said.
He said payment terms are agreed between the SIU and the debtor and interest is charged at the PFMA rate, currently 7%. When debtors fail to meet the agreed payment schedule, the SIU has the option of obtaining a default court order, Le Roux said.
“The SIU, however, always refers all criminality to the NPA as well as disciplinary action, where government employees are involved, to their respective departments.”
Le Roux said the SIU found that even in the government’s UIF TERS awareness campaign, proper procurement procedures were not followed when five service providers were appointed at a cost of $ 6.1 million. of rand.
He said the SABC could have carried out the awareness campaign, but the service providers were irregularly appointed and predetermined.
Five officials were found guilty in internal hearings and received written warnings, he said.
The written submission to Scopa also referred to an individual known only as “Mr. Simbini,” a director of a company called Impossible Services, who submitted more than 6,000 TERS requests worth $ 111 million. rands on behalf of Impossible Services for various employees.
âSimbini used over 1,200 duplicate identification numbers by itself to generate the complaints. It has been established that the same IP address was used to generate the complaints.
âAccording to the records, the only registered employee of Impossible Services was Simbini himself, so there were no other registered employees for Impossible Services for whom the TERS money could be claimed,â the submission said.
The money was paid into Impossible Services’ bank account to the tune of R 110 million and more than R 1 million had already been withdrawn.
He added that Simbini moved money from one bank account to another from time to time to avoid detection by the UIF via an algorithm.
Scopa Chairman and Member of Parliament Mkhuleko Hlengwa said in a meeting next week with the UIF that a delegation from the National Treasury should also be included to have a detailed discussion on the government’s payment systems, like that of the UIF.
Scopa member and SA MP Alf Lees said the findings of the investigation were essential, not only for the temporary relief of the TERS, but also for lawmakers to gain insight into how to improve government payment systems in general.
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