Covid-19 grants: 'Unfair' to name and shame companies who cheated, Scopa told

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Minister of Employment and Labour Thulas Nxesi.
Minister of Employment and Labour Thulas Nxesi.
Picture supplied by GCIS

  • The Unemployment Insurance Fund (UIF) told Parliament that, following legal advice, it can’t name and shame businesses that improperly received Temporary Employer-Employee Relief Scheme payments from the fund.
  • Thousands of companies accessed money unlawfully.
  • A new investigator to probe the improper UIF payments will be appointed by the end of November, after the previous contract expired.

The Unemployment Insurance Fund (UIF) told Parliament's Standing Committee on Public Accounts (Scopa) that, following legal advice, it can’t name and shame businesses that improperly received Temporary Employer-Employee Relief Scheme (TERS) payments from the fund.

The UIF TERS payment was launched last year at the beginning of the Covid-19 pandemic to help pay workers whose employers couldn’t operate during lockdown.

Last year, the office of the Auditor General (AG) found a slew of irregularities in the payment of the UIF TERS benefit, which prompted the Department of Employment and Labour as well as the Special Investigating Unit (SIU) to investigate.

Thousands of companies submitted fraudulent applications, and UIF chief operating officer Marsha Bronkhorst said a list of all companies suspected of fraud on the Covid-19 TERS benefit was compiled with the intention to submit it to the National Treasury for naming and shaming.

But a legal opinion found that given that the memorandum of agreement signed by the department and UIF did not provide for naming and shaming of the companies, and it would be "unfair" to identify these companies, Bronkhorst said.

Last week, the SIU also told Scopa that at least 6 000 employees in 24 government departments, and seven prison inmates, received payments from the UIF Ters system. The unit also noted evidence of payments processed with the identity numbers of deceased South Africans.

This prompted Scopa member and EFF MP Ntombovuyo Mente to ask: "How did they categorise risk assessment when it comes to service providers which designed the system that failed to pick up public servants with Persal [Personnel Salary Systems] numbers who were paid UIF TERS benefits?"

Acting UIF Commissioner Advocate Mzie Yawa said paying and managing UIF TERS payments while probing the circumstances of improper scheme payments at the same time proved challenging for the UIF and that the fund was working with law enforcement to get added support.

"What really killed us was the speed with which we needed to pay TERS. The trust we had the public servants who sign declaration of interest every year would not try to do something untoward. But yes, staff of public service with Persal numbers who never suffered salary loss were paid," Yawa said.

The UIF also told Scopa that a new investigator would be appointed to probe UIF staff and the service providers that developed the UIF TERS payment system for the fund. A tender for a new investigator will be issued, because the the contract with the service provider in the initial investigations had expired. Scopa member and DA MP Alf Lees took umbrage with the delays in getting to the bottom the undue payments.

"The reason for the delay is that the first tender in the program expired before we could cover the entire scope of what had to be investigated, because we did not want a single company to get away with improper TERS payments,” Yawa said.

"It's a new tender in that sense. The previous one gave us some actions within a limited scope of time without completing the entire radius. We had to go back to tender and follow the legal process. That is why we are said to have moved slower than we should have, to cross each T and dot each I," said Yawa.

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