The Unemployment Insurance Fund (UIF) is calling for companies around the country to cooperate with their forensic auditors who are working to establish if money meant for employees was paid.
The Temporary Employer/Employee Relief Scheme (TERS) was introduced in 2020 to assist employees who have lost income due to the Covid-19 pandemic and subsequent lockdowns. The UIF paid R62 billion in TERS benefits to employees around South Africa.
UIF commissioner Teboho Maruping has warned businesses that fail to comply with audits that will face serious consequences. This includes freezing companies' bank accounts as well as their assets.
We will freeze your company bank accounts and assets to enforce cooperation with our audit!
Maruping says they were left frustrated at employers who were non-cooperative and evasive. The commissioner joined forensic auditors when they visited companies around Durban to assess compliance.
The commissioner lamented two companies located in Pinetown for their attitude towards the forensic auditors. One company failed to uphold prior arrangements and audit while another company made auditors wait around like they were “beggars”.
It was disheartening to find a well-established company in Pinetown with whom we made prior arrangements for the audit not be ready to cooperate with us.
Maruping warned companies they will not hesitate to refer cases to the Hawks and the Asset Forfeiture Unit (AFU) of the National Prosecuting Authority (NPA) to freeze bank accounts and assets of non-cooperating companies.
Follow The Money
In 2022, the UIF launched the “Follow the Money” project. The project will audit businesses that received TERS benefits and seek to determine whether any fraudulent activity was committed by employers.
They will seek to find employers who received TERS benefits on behalf of their employees but failed to disburse the money to intended beneficiaries.
More than 360 auditors from seven companies with auditing, accounting, and forensic investigation have been deployed to assist the UIF.
At least 15 company directors have been criminally prosecuted for Covid-19 TERS-related fraud. One person who was found to have committed Covid-19 TERS-related fraud received a direct imprisonment sentence of more than 100 years.
Lindelani Gumede received a sentence of 135 years after they were found guilty of 32 counts of TERS-related fraud amounting to R11 million.
