Employment and Labour deploys auditors for phase 2 of Follow-The-Money Project

UIF deploys more than 360 auditors to visit employers as part of phase 2 of its follow-the-Money Project
More than 360 forensic auditors who have been deployed by the Unemployment Insurance Fund (UIF), have started knocking on the doors of employers who benefited from the Covid-19 TERS Relief Scheme to examine their financial records, verify the authenticity of their claims and confirm if the correct amounts of money were paid over to workers, at the right time.

The UIF has enlisted the services of seven companies with auditing, accounting, and forensic investigation expertise to implement phase two of its “follow the money” project, which got underway in July 2022.

The objectives of the “follow the money” project entail verifying that Covid-19 TERS funds reached the intended beneficiaries at the right time, that funds were not abused or misused by the employers, that claims were validly lodged, that employees for whom claims were made are actually employed by companies); and to assess if information that was used for claims was not manipulated. The audit companies whose services have been enlisted are:

The Accounting Village (Pty) Ltd;
NKS Chartered Accountants;
Inqaba Kadiya Consulting (Pty) Ltd;
Leolo and Partners Chartered Accountants;
Morobi Chartered Accountants;
Ndemex Business Solution; and
Ligwa Advisory Services.
The UIF has urged employers to grant auditors access to their premises and to proactively prepare for the audits by having at least three month’s pre-lockdown payroll reports, bank statements proving that Covid-TERS funds were paid over to employees, employee salary advice related to the payments, as well as salary reconciliations readily available for the auditors.

It must be noted that the UIF is empowered to audit employers through the Memorandum of Understanding (MOA) which it signed with employers before the release of funds. Among other things, the MOA authorises the UIF to audit the Covid-19 TERS benefit at any given time. Where employers are found to have a case to answer for illegally receiving funds or being in contravention of any part of the MOA, legal proceedings will be instituted for them to account for the funds.

UIF Commissioner, Teboho Maruping, said that employers who benefitted from Covid-19 TERS should get their ducks in a row to ensure compliance with the UIF internal auditors and enlisted audit companies.

“Over the past few months, we have witnessed how some employers were being convicted and jailed for Covid-19 TERS fraud. It is quite disturbing that the UIF is still receiving complaints about companies who have allegedly received Covid-19 TERS monies but who failed to pay these over to their workers. Allegations have also come to light that some employers were only paying part of the money to workers and not the full amounts and that companies were using the money for other purposes.

Of great concern to the UIF is a recent death threat that was made against one of our officials who is at the forefront of conducting the audits. We condemn this conduct and will not allow it to deter us from executing this important work,” said Maruping.

The Commissioner says that from the start of Covid-19 TERS, the UIF was cognisant of the possible risks of fraud and hence it proactively established the “follow the money” project.

“Our intention, as the UIF was always to support companies, workers, and our economy during the lockdowns but there was always a plan to conduct a comprehensive audit of all the payments in order to substantively account for every rand and cent that was paid out of the Fund. Therefore, I am urging all companies to extend the forensic auditors their full cooperation and to supply the required information within the specified time frames. Failure to comply will lead to legal action,” said Maruping.

Phase 1 of the “follow the money project” saw the UIF audit R14,1 billion which the outcome was as follows:

R12,8 billion was audited and deemed as accurate payments;
R918 million was recovered to the UIF; and
Regretfully, R387 million was suspected to be fraudulent payments and were referred for further investigation.
To date, the Fund has recovered R3,4 billion for which 10 people have been sentenced. Another 46 persons who are suspected of committing Covid-19 TERS-related offenses have been arrested and are currently facing prosecution.

Source: Government of South Africa