Minister warns of tough action as UIF head, management suspended

LABOUR and Employment Minister Thulas Nxesi has warned that tough action will be taken against those who took part in malfeasance and corruption within the Unemployment Insurance Fund (UIF).

This comes as Nxesi announced the suspension of UIF commissioner Teboho Maruping and the entire management due to allegations of fraud and mismanagement of Covid19 relief funds.

Nxesi held a briefing on Wednesday in response to the report of Auditor-general Kimi Makwetu which highlighted a litany of potential fraudulent activity in the use of the relief funds both in terms of procurement processes and the disbursements of temporary employment relief funds by the UIF.

The UIF has to date disbursed R41.6 billion for the benefit of retrenched workers and those who had salary cuts during the pandemic with some of it being sent to the wrong beneficiaries, including dead people.

Nxesi said he had earlier called on the UIF to strengthen its financial controls, and subsequently invited Makwetu to perform an interim audit to highlight risks and gaps within the institutions.

“We have now received the AG’S reports which point to numerous gaps, risk and inadequate controls and verification processes.

“This has resulted in illegal payments, among others, to recipients of state grants, students receiving National Student Financial Aid Scheme (NSFAS) payments, public servants, UIF employees, inmates, deceased persons and miners,” Nxesi said.

He added that he had noted that there had also been overpayment and underpayment, and said he took the numerous breaches seriously.

Delivering his report, Makwetu said a comparison of government databases had uncovered a litany of potential fraudulent activities due to the weakened systems during the pandemic.

“An opportunity for fraudulent behaviour arises when the disciplines of internal control have been weakened. In this case that is what we have observed,” Makwetu said.

Nxesi said he had suspended Maruping because the breaches had occurred under his watch, including his management team.

“The director-general of the department has suspended the UIF management, the chief financial officer, the chief operating officer and the head of the supply chain. These moves allow for the Special Investigating Unit (SIU) to conclude its forensic investigations completely unfettered,” he said.

The department’s chief operating officer Marsha Bronkhorst has been seconded as the acting commissioner for the UIF.

Nxesi gave the assurance the UIF was continuing with payments to beneficiaries, despite the day-long suspension triggered by Makwetu’s report.