Minister of Labour, Membathisi Mdladlana, has confirmed that there is a need for extraordinary corrective measures to be take to rectify the situation at the Unemployment Insurance Fund (UIF). The Minister was reacting to the report of the Auditor-General (AG) to Parliament on the financial status of the fund for the financial year ending 31 March 2004.
The Minister, who was speaking on his return from Burkina Faso, said that an internal audit had already identified many of the problems highlighted in the Auditor General's report.
"I will be meeting with the internal audit team and we will be discussing their report and recommendations in detail," Minister Mdladlana said.
Some of the steps recommended have already been taken. For example, the non-appointment of a Chief Financial Officer (CFO) was identified as an issue hampering financial governance. This has been addressed by the appointment of Mr Boas Seruwe as CFO.
"A lot is expected from Mr. Seruwe, who brings to the UIF a wealth of financial management knowledge and experience from the private and public sectors. He will be ably supported in his duties by the three other newly appointed executive managers in the financial section," Minister Mdladlana added.
The Minister also announced the appointment of Mr. Isaac Modise, as the new Chief Information Officer of the Fund. He would be responsible for the management and monitoring of the implementation of the new systems at the fund and including the information technology environment.
He said while acknowledging that there were still challenges facing the UIF, the Fund continued to lay a firm foundation for future growth.
"Whereas the Fund experienced a string of deficits just more than two years ago, it has now built reserves of up to R7.4 billion. The Fund will be fully funded by the end of this financial year 2004/05, given the current contribution and investment trends. In fact the actuaries in last year's actuarial report, are projecting a healthy financial position with future Revenue exceeding benefit expenditure," said Minister Mdladlana.
He added that the actuaries have again declared, "The fund was in a sound financial state on a cash flow basis".
The Minister further alluded that the UIF continued to be an important feature of the Government's social safety net by offering short-term relief to the unemployed.
"The Fund paid R2.1 billion to close to half a million beneficiaries during the 2003/04 financial year. It is also worth noting that this figure includes just over 10 thousand domestic workers, who were paid benefits totalling R3.4 million. I am quite pleased with these developments considering that domestic workers were only included in April of last year". Other service improvement projects in the Fund are underway said the Minister.
To date more than 600 000 domestic employers have registered with the Fund.
Source: Department of Labour