​​The fact that the Auditor General has found a marked improvement in the way that the Unemployment Insurance Fund (UIF) has improved its controls in disbursing the Covid-19 relief funds is testament to the hard work that has been put in by all involved.

This is the view of the Minister of Employment and Labour, Thulas Nxesi who also welcomed the AG's second special report on financial management by government, state-owned entities and municipalities during the Coronavirus pandemic.

Significantly, the report shows that the UIF, an entity of the department, had significantly improved its controls and has also been able to recover close to R3.5-billion that had been paid out to non-competent claims.

“At the release of the first report, we committed everyone involved into making sure that we improve controls and exercise extreme caution in discharging the duty of supporting the country through UIF funds during its needy times.

“In any event, right from the beginning when the lockdown was announced, we indicated that we understand that such a massive undertaking was bound to have a downside – corruption and related malfeasance.  Even then we undertook stringent verification procedures to minimise the risk of loss through corruption.

“We also welcomed the intervention of the AG whose team has helped us identify control gaps and in the main, these have been fixed. I congratulate the staff who have worked hard, under extreme pressure for rising to the occasion and turning a sore point into a positive step with regard to our disbursements," said Minister Nxesi.

The AG indicated that the recovery of funds was achieved through responsiveness from accounting officers of the UIF to implement recommendations that were made by the AG's real-time audits.

In its first special report, the AG identified incorrect Covid-19 TERS payments and flagged payments that required further investigation. These included, inter alia, payments to people who are below the legal age of employment, deceased, incarcerated or working in government.

Yesterday, the AG said the UIF has made progress to address the previously identified system weaknesses, such as a lack of validations and incorrect calculation. 

“We remain committed to clean and proper fiscal governance. I also would like to commend and thank the office of the Auditor General for their reports that have already assisted us to implement a lot of control measures to address the shortcomings that were identified. We are encouraged by the work of the AG as it affirms our commitment to accountability and ensures that we continue to account for every cent that is entrusted to us," said Minister Nxesi.

The Minister has also commended joint efforts of labour inspectors and UIF's Risk Management Unit, working closely with law enforcement agencies which has led to the recovery of millions of rands and several arrests being effected.

“We were always aware of the risks of fraud with the new Covid-19 TERS hence we developed a strategy to 'Follow the Money'. The auditors that we appointed are already on the ground to examine the financial records of companies that we paid to check the authenticity of their claims and verify if the money was paid over to workers," said Minister Nxesi.

However, Minister Nxesi cautioned against complacency. “Whilst we welcome the report from the AG, on improvements, a lot of work still needs to be done and our officials are hard at work to improve the systems, putting the right skills and reducing the backlog as the result of the Covid-19 pandemic."

Media enquiries:

Makhosonke Buthelezi: Director: UIF Communication & Marketing

071 491 7236

Or

Sabelo Mali: Ministerial Spokesperson

082 729 5804

Or

Musa Zondi: Acting Departmental Spokesperson

067 426 4190 

"Please continue adhering to the lockdown regulations. Wash hands or sanitise your hands regularly and wear your mask at all times."

-ENDS-

Issued by: Department of Employment and Labour​