TERS fraud: authorities close in
TERS FRAUD: MORE THAN R57BN PAID OUT TO 13.5M EMPLOYEES SO FAR
A total of 20 people have been arrested and 70 criminal court cases have started.
Authorities are closing in on thousands of South African citizens and officials who unlawfully enriched themselves through the Unemployment Insurance Fund (UIF) Covid-19 Temporary Employer-Employee Relief Scheme (Ters).
On 22 August last year, Minister of Employment and Labour Thulas Nxesi referred the findings of the office of the Auditor-General regarding fraud and wasteful expenditure associated with Ters payments to the Special Investigating Unit (Cobras) – for consequence management and legal action.
This week, the Cobras reported back to the parliamentary portfolio committee on labour and employment.
Regarding the Ters awareness campaign, the Cobras found that R6.1 million was irregularly spent on radio advertisements. Disciplinary hearings are currently proceeding against seven officials.
Lifestyle audits of several UIF officials have started and rapid progress is being made.
Thus far, 13 447 004 employees working for 1 156 565 companies or employers have benefitted from Ters to the tune of R57 384 148 010 (R57.38 trillion).
How the fraud has been perpetrated
The Cobras identified a variety of ways in which payments have been fraudulently claimed. These include: UIF officials making payments to colleagues or themselves;
Payments made to the deceased, prisoners, foreigners and people with invalid ID numbers;
Double-dipping (beneficiaries claiming Ters payments while also receiving social grants);
Payments of amounts that are too high or too low; and Instances where the payment date precedes the claim date. Since 12 December, investigations into payments to 6 140 civil servants, 78 National Defence Force members, seven prisoners and 68 deceased people have been finalised; 20 people have been arrested and 70 criminal court cases have started.
Parliamentary response
Democratic Alliance (DA) MP Michael Bagraim raised concerns that the Cobras’ mandate is too narrow.
Bagraim, a well-known labour lawyer, pointed out that he and fellow DA MP Dr Michael Cardo had pointed out practical examples of fraud, maladministration, inefficiency and wrongful expenditure – but that the ANC, the department and Nxesi had done nothing for months, and instead questioned the DA’s credibility.
He said top officials remain suspended on full pay and insisted that the full might of the law be brought to bear on guilty officials, including the director-general of Nxesi’s department.
The pandemic has merely accentuated the weaknesses and fraud that have existed for years and which the officials and the ANC have ignored and abetted.
Cardo asked that the Cobras also investigate whether the malfeasance was by design.
The Cobras said their investigation is continuing and they will report back to parliament on their progress regularly.
Pandemic accentuates the weaknesses