Auditor-General Kimi Makwetu, found that there were many irregularities with the UIF Temporary Employer/Employee Relief Scheme (TERS).
The irregularities found by Makwetu include overpayments, underpayments, invalid rejection of beneficiaries, fraud and double-dipping. The auditor general has called for changes to be made to the system and the overall payment of TERS.
"We've identified some overpayments because the period of inactivity was not taken into account in determining the payment that was supposed to be made to the employers."
"We've given this to the UIF people and asked them to scrutinize the lists that we have extracted from their databases and give us explanations for why the amounts they have paid are the way they are."
Makwetu said he hoped this would help the UIF decide on whether or not to find ways to undo the overpayments.
The investigation started in August after President Cyril Ramaphosa asked Makwetu to audit a number of covid-19 relief funds that the government had set up.
When the investigation started, many UIF beneficiaries were affected as payments were temporarily put on hold. UIF spokesperson, Makhosonke Buthelezi said the UIF had been trying to get the situation under control.
“This issue is under investigation, however, we normally check IDs against the Home Affairs database. That is why in some cases we’ve been able to stop payments where Home Affairs confirms that the applicant is deceased,”
He was confident in the UIF's bank verification system and said the UIF would continue to work with the Auditor-General in order to get to the bottom of it.
“Some of the things we’ve done to curb fraud include bank verification prior to payment, blocking the payment where anomalies are detected such as multiple UIF reference numbers against one bank account, and we’ve also introduced business rules to deal with some of the control deficiencies like payments to underage or overage claimants. We’re still going to appoint a team of auditors to follow up on all payments made,”
Businesses for South Africa (B4SA) feared that the investigation would badly affect beneficiaries of the UIF TERS.
"The UIF system is incapable of remedying the relatively small number of fraudulent claims without disadvantaging the millions of legitimate claimants is an indictment on the UIF system."
Minister of Employment and Labour, Thulas Nxesi said other members of senior UIF management have also been suspended in order to allow the Special Investigation Unit to continue with its investigation without interruptions.