Cape Town - The auditing of the finances of the Compensation Fund for 2021-22 has been postponed until next year to allow the institution to deal with matters from audits of prior financial years.
“In order to make sure that the financial statements we prepare for the financial year ending March 2022 is accurate and are supported by documents, there was a request to postpone the audit.
“The Auditor General and the National Treasury were notified,” Compensation Fund Commissioner Vuyo Mafata said.
Mafata said they would submit a proper audit report at the end of March 2023.
He made the statement when he was briefing the standing committee on public accounts (Scopa) along with the Unemployment Insurance Fund (UIF) this week on corrective measures regarding their finances.
The Compensation Fund and UIF have obtained disclaimers of audit opinions over the years, as far back as 2013.
Mafata said Employment and Labour Minister Thulas Nxesi had approved the secondment of personnel from the private sector to assist with a clean audit action and also deal with areas that did not attract relevant skills.
“We have brought in a team of 20 personnel who are seconded from FTMG Africa with the relevant experience. The team has focused on implementing the audit plan and making sure that they assist the fund in preparing for the upcoming audit as well as assisting in implementing and monitoring key controls to improve audit outcomes,” he said.
Mafata also said Employment and Labour Department director-general Thobile Lamati has approved a clean audit plan to address the root causes and audit findings.
He said they had appointed a service provider to do a diagnostic review of the Competition Fund and identify gaps on what needed to be put in place to make the entity and UIF operate as intended.
“This is one of the interventions the minister put in place to make sure we improve the way the organisations are designed, and it would help to attract skills we need to implement systems and the ICT to support the nature of the businesses of the two entities.”
A report on the review is expected at the end of August 2023.
Mafata also said five companies had been appointed to conduct forensic investigations after a procurement process was concluded earlier this year.
The companies – Bowman, Abacus, SNG & TSF Africa, Nexus and Stoneburn – will review all transactions that took place in the Compensation Fund and UIF from 2016-17 until 2020-21.
“We have divided the work into eight packages,” he said.
Meanwhile, UIF commissioner Tebogo Maruping said the insurance fund has a clean audit action plan aimed to make sure internal controls were preventative and detective.
Maruping also said they have the team FTMG Africa helping with building capacity and ensuring their financials were clean of material misstatements, among other things.
Asked why the UIF has not submitted their 2020-21 annual report, Maruping said it was due to a report for auditing of R61 billion Covid -19 TERS paid to companies.
He said they have to verify if the relief fund was paid to the rightful people.
The UIF has audited R18 billion so far, and there was still auditing to be on the remaining R40 billion balance.
There was work done by the Special Investigating Unit, as well as recoveries done through court processes.
“The processes make it almost impossible to give the financial position of the fund,” Maruping said.
Scopa chairperson Mkhuleko Hlengwa said the UIF and the Compensation Fund would be called to give a progress report before the end of the year.
Hlengwa said unless people at the two entities got a keen appreciation of the gravity of the adverse impact their institutions have on the people who depend on them, things were not going to change.
“It is ordinary the man on the street who has to bear the brutal brunt kind, of incompetences, challenges, dilemmas, shortcomings and system problems that characterise the UIF and the Compensation Fund,” he said.
Hlengwa also said the perennial headache of the Compensation Fund and the UIF has been with Scopa for the longest of time.
“That is why I always ask the question: why do these people continue in their positions in these institutions when the substantive majority of problems we deal with have happened on their watch,” he said.
Cape Times