- Fraudulent Covid-19 relief claims were made by as many as 6 000 government employees, according to the SIU.
- The SIU was giving Parliament's Standing Committee on Public Accounts a virtual briefing on its investigation into irregular payments from the TERS fund during the pandemic.
- The UIF TERS was meant to assist South Africans who could not work due to the Covid-19 lockdown.
At least 6 000 employees in 24 government departments received payments from the Unemployment Insurance Fund's (UIF) Temporary Employer-Employee Relief Scheme (TERS), the Special Investigating Unit (SIU) said on Wednesday.
In another case, a single individual submitted over 6 000 claims for a company in which he was the only registered employee.
Payments were also made using the ID numbers of prisoners or dead people.
The SIU was giving Parliament's Standing Committee on Public Accounts (Scopa) a virtual briefing on its investigation into irregular payments from the fund during the pandemic.
The SIU's submission to the finance oversight committee highlighted a total of over 300 matters in the probe that had been finalised, and 80 that have been handed over for criminal investigation.
Over R23 million has been recovered so far.
But SIU chief forensic investigator Johnny le Roux said the scale of total UIF payments involved millions of beneficiaries, millions of employers and billions of rands in payments, meaning that probing transactions would take a long time.
"During the investigation period, a total of 13.4 million employees received TERS payments or benefits from the UIF. These employees were linked to 1.1 million companies or employers. A total of R57.3 billion was paid out by the UIF since [the] inception of the scheme," said Le Roux.
The SIU investigation found that at least 6 000 employees were identified in 24 national or provincial government departments with the assistance of the Department of Public Service and Administration, Le Roux said.
Additionally, seven prison inmates had received TERS payments. These were linked to foreign nationals who used the identity numbers of incarcerated people for the claims, he said.
The UIF TERS was meant to assist South Africans who could not work due to the Covid-19 lockdown. It was announced at the beginning of the pandemic as a mechanism to allow businesses whose operations were restricted due to the pandemic to pay their employees.
But the system was abused, facing fraud by both companies and government employees.
The office of the Auditor General flagged major shortcomings in the system and a probe was undertaken.
Getting the money back
Updating Scopa on the investigation, SIU CEO Advocate Andy Mothibi said the unit was collaborating with the South African Police Service (SAPS) for criminal investigations and referring them for prosecution.
In some cases, the unit recovered funds through civil litigation.
Le Roux said in an instance where an employer admits to receiving improper payments of UIF TERS, an acknowledgment-of-debt process (AOD) will kick in as a form of civil litigation, as this was more cost effective than prosecution.
"An AOD is a form of litigation by the SIU to fast-track recoveries from employers and employees. This is a more cost-effective process of recovery, and the money is paid directly into the SIU's trust account, which is later transferred back to the UIF," he said.
He said deadlines for payments are agreed upon between the SIU and the debtor and interest is charged at PFMA rates, currently at 7%. When debtors fail to meet the agreed payment schedule, the SIU has the option to obtain a default court order, Le Roux said.
"The SIU, however, still refers any criminality to the NPA as well as disciplinary action, where government employees are involved, to their respective departments."
Procurement problems
Le Roux said the SIU had found that even in the government's UIF TERS awareness campaign, proper procurement procedures were not followed when five service providers were appointed at a cost of R6.1 million.
He said the SABC could have led the awareness campaign, but service providers were irregularly appointed and predetermined.
Five officials were found guilty in internal hearings and given written warnings, he said.
Impossible claims
The written submission to Scopa also referred to an individual known only as "Mr Simbini", a director of a company called Impossible Services, who submitted over 6 000 TERS claims to the value R111 million on behalf of Impossible Services for various employees.
"Simbini used over 1 200 ID numbers duplicated by himself in order to generate the claims. It was established that the same IP address was used to generate the claims.
"According to records the only registered employee of Impossible Services was Simbini himself; there was therefore no other registered employees for Impossible Services that TERS money could be claimed for," the submission read.
Money was paid into the bank account of Impossible Services at R110 million and an amount of over R1 million had already been withdrawn.
It added that Simbini moved the money from one bank account to another from time to time to avoid detection by the UIF through an algorithm.
Scopa chair and member of Parliament Mkhuleko Hlengwa said at a meeting next week with the UIF, a National Treasury delegation should also be included to have a detailed discussion about government payment systems, like that of the UIF.
Scopa member and SA MP Alf Lees said the findings of the probe were critical, not just for the temporary TERS relief, but for the legislature to gain insights on how to improve government payment systems in general.
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