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Employment and Labour Minister Thulas Nxesi has welcomed Auditor-General Tsakani Maluleke’s finding that the Unemployment Insurance Fund (UIF) had markedly improved the disbursement of COVID-19 relief funds.
In the first report, late former Auditor-General (AG) Kimi Makwetu found that various incorrect Temporary Employee/Employer Relief Scheme (TERS) payments had been made and flagged a high number of payments that required further investigation.
These payments included pay-outs to people who are below the legal age of employment, deceased, working in government, receiving social grants, or receiving other UIF benefits.
Releasing the office’s second audit report on COVID-19 relief funds on Wednesday, Maluleke said the UIF had attempted to remedy the situation to prevent incorrect calculation of payment to ineligible persons.
The new AG noted that significant inroads had been made to reverse the precarious situation, with around R3.4 billion recovered from the incorrectly disbursed funds. By September, the fund had disbursed R37.1 billion.
“At the release of the first report, we committed everyone involved into making sure that we improve controls and exercise extreme caution in discharging the duty of supporting the country through UIF funds during its needy times,” said Nxesi in a statement on Thursday.
The department has from the onset, acknowledged that it understood that the massive undertaking was bound to have a downside – corruption and related malfeasance.
“Even then we undertook stringent verification procedures to minimise the risk of loss through corruption. We also welcomed the intervention of the AG whose team has helped us identify control gaps and in the main, these have been fixed.
“I congratulate the staff who have worked hard, under extreme pressure for rising to the occasion and turning a sore point into a positive step with regard to our disbursements,” said the Minister.
The AG indicated that the recovery of funds was achieved through responsiveness from accounting officers of the UIF to implement recommendations that were made by the AG’s real-time audits.
In its first special report, the AG identified incorrect Covid-19 TERS payments and flagged payments that required further investigation. These included, inter alia, payments to people who are below the legal age of employment, deceased, incarcerated or working in government.
Yesterday, the AG said the UIF has made progress to address the previously identified system weaknesses, such as a lack of validations and incorrect calculation.
“We remain committed to clean and proper fiscal governance. I also would like to commend and thank the office of the Auditor General for their reports that have already assisted us to implement a lot of control measures to address the shortcomings that were identified.
“We are encouraged by the work of the AG as it affirms our commitment to accountability and ensures that we continue to account for every cent that is entrusted to us,” said Nxesi.
The Minister has also commended the joint efforts of labour inspectors and the UIF’s Risk Management Unit, working closely with law enforcement agencies which has led to the recovery of millions of rands and several arrests being effected.
“We were always aware of the risks of fraud with the new Covid-19 TERS, hence we developed a strategy to ‘Follow the Money’. The auditors that we appointed are already on the ground to examine the financial records of companies that we paid to check the authenticity of their claims and verify if the money was paid over to workers,” said Minister Nxesi.
The Minister, however, cautioned against complacency.
“Whilst we welcome the report from the AG, on improvements, a lot of work still needs to be done and our officials are hard at work to improve the systems, putting the right skills and reducing the backlog as the result of the Covid-19 pandemic,” he said.