Durban - The noose around the necks of those who illegally benefited from the Covid-19 Temporary Employer-Employee Relief Scheme (TERS) is tightening, after the Unemployment Insurance Fund confirmed that it had hired more than 360 forensic auditors to trace and examine beneficiaries’ financial records.
UIF Commissioner Teboho Maruping said teams have already started knocking on the doors of employers who benefited from the scheme.
“The teams will examine financial records, verify the authenticity of their claims and confirm if the correct amounts were paid to staff at the right time,” he said.
Maruping said the UIF has enlisted the services of seven companies with auditing, accounting and forensic investigation expertise to implement phase 2 of its ‘Follow The Money’ project that kicked off in July.
Five months ago, eight suspects appeared in the Durban Specialised Commercial Crimes Court after they allegedly applied for R2.4 million in funding for their employees. Investigations revealed that the accused allegedly added a number of employees who were not working for their companies. They have bee charged with fraud, corruption and money laundering.
In another case, at least 20 people were arrested for allegedly defrauding the Department of Employment and Labour of about R2.2m.
Maruping said the UIF is empowered to audit employers through the memorandum of agreement (MOA) it signed with employers before the release of the funds.
“Among other things, the MOA authorises the UIF to audit the Covid-19 TERS benefit at any given time. Where employers are found to have a case to answer for illegally receiving funds or being in contravention of any part of the MOA, legal proceedings will be instituted for them to account for the funds,” he said.
Maruping said over the past few months, the UIF has seen how some employers were being convicted and jailed for TERS fraud.
“It is quite disturbing that the UIF is still receiving complaints about companies who have allegedly received Covid-19 TERS monies but who failed to pay these over to their workers. Allegations have also come to light that some employers were only paying part of the money to workers and not the full amounts, and that companies were using the money for other purposes,” he said in a statement.
“Of great concern to the UIF is a recent death threat that was made against one of our officials who is at the forefront of conducting the audits.
“We condemn this conduct and will not allow it to deter us from executing this important work.”
The commissioner says that from the start of TERS, the UIF was cognisant of the possible risks of fraud and hence it established the ‘Follow The Money’ project.
“Our intention as the UIF was always to support companies, workers and our economy during the lockdowns but there was always a plan to conduct a comprehensive audit of all the payments in order to substantively account for every rand and cent that was paid out of the fund. Therefore, I am urging all companies to extend the forensic auditors their full co-operation and to supply the required information within the specified time frames. Failure to comply will lead to legal action,” Maruping said.
Phase 1:
Phase 1 of ‘Follow The Money’ saw the UIF audit payments of R14.1 billion, with the outcome as follows:
- R12.8bn was audited and deemed accurate payments.
- R918 million was recovered by the UIF.
- Regretfully, there were suspected fraudulent payments amounting to R387m and these were referred for further investigation.
Maruping said to date, the fund has recovered R3.4bn for which 10 people have been sentenced. Another 46 people who are suspected of committing TERS-related offences have been arrested and are facing prosecution.
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