Director of a company for alleged fraud regarding Unemployment Insurance Fund Arrested

Hardly three weeks after receiving a complaint of COVID-19 social relief funds fraud from Mtititi community in Limpopo outside Malamulele, the Hawks Serious Corruption Investigation team arrested a 47-year-old director of a company for alleged fraud regarding Unemployment Insurance Fund (UIF) funds. 

DIRECTOR CLAIMS UIF FUNDS FOR LAID-OFF WORKERS 

Between April and August 2020, the suspect who is a director of Mtititi Drop in Center allegedly claimed R3.2 million COVID-19 social relief funds from the UIF on behalf of her 242 former Malamulele based Extended Public Works Program (EPWP) workers.

“It was established during the investigation that the workers contract was terminated before the country’s lockdown was declared by the State President. It is further alleged that the claimed money never reached the pockets of the former workers,” said Captain Matimba Maluleke. 

The suspect will appear in the Malamulele Magistrate’s Court on Monday 12 October 2020 to face fraud charges.

FRAUD AND DOUBLE DIPPING REGARDING COVID-19 INITIATIVES 

Early last month, Auditor-General Kimi Makwetu released the first report on the management of funds regarding COVID-19 initiatives. According to the audit report, there were indicators of fraud and double-dipping, particularly, regarding UIF TERS and social grants payments.

Regarding UIF TERS payments, the following irregularities were found; 

• Overpayments on benefits for the first lockdown period – the system did not take into account the actual period of inactivity and the portion of the salary paid by employers
• Data analytics identified a high number of payments that require further investigation e.g. people who are below the legal age of employment, deceased, working in government, receiving social grants or funded by the national student financial aid scheme; and 
• Recalculations identified overpayments, underpayments, duplicate payments and discrepancies such as payment approval made before the date of application. 

During a media briefing on Wednesday 2 September Employment and Labour Minister Thulas Nxesi announced that four members of UIF senior management would be suspended, following the release of Makwetu’s report on COVID-19 initiatives. 

The Director-General of the Department of Employment and Labour suspended three UIF senior management officials; the CFO, COO and Head of the Supply Chain, while Nxesi suspended UIF Commissioner Teboho Maruping.  

The report also said there were clear indicators of fraudulent activities in procurement processes which would be investigated further and shared with the newly established fusion centre and other investigating agencies.