Ters fraud: The authorities are closing in

Authorities are rapidly closing in on thousands of South Africans (citizens and officials) who unlawfully enriched themselves through the Unemployment Insurance Fund (UIF) Covid-19 Temporary Employer-Employee Relief Scheme (Ters).

On August 22 last year Minister of Labour and Employment Thulas Nxesi referred the findings of the office of the Auditor-General regarding fraud and wasteful expenditure associated with Ters payments to the Special Investigations Unit (SIU) – colloquially known as the 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.

Furthermore, 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 384 148 010.44.

How the fraud has been perpetrated

The Cobras identified a wide variety of ways in which Ters payments have been fraudulently claimed.

These include:

• UIF officials making payments to their 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 December 12, investigations into payments to 6 140 civil servants, 78 South African 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

DA MP Michael Bagraim raised concerns that the Cobras’ mandate on this matter is too narrow.

Bagraim, who is one of the country’s best known labour lawyers, pointed out that he and fellow DA MP Dr Michael Cardo had, from the first week, accurately 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 at great cost to the taxpayer, and insisted that the full might of the law be brought to bear on guilty officials, including the director-general of Nxesi’s department.

Bagraim said the pandemic has merely accentuated the weaknesses and fraud that has 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.

Freedom Front Plus MP Heloise Denner emphasised that the investigation should also include input from the departments of home affairs and civil service and administration.

The Cobras said their investigation is continuing and they will report back to parliament on their progress regularly.

Listen to Nompu Siziba’s interview with Karam Singh from Corruption Watch (or read the transcript here):