South Africa’s auditor general recovers $228 million of fraudulent jobless claims

South Africa’s auditor general has announced recovery of nearly $228 million of irregularly paid COVID-19 jobless claims in an ongoing investigation into corruption linked to relief funds.

Earlier in the year, a special jobless grant administered by the government’s Unemployment Insurance Fund (UIF) called TERS payments was introduced to provide between 38% and 60% of the salary of employees laid off directly as a result of the pandemic.

Corruption allegations arose and the national audit office backed up the claims saying parts of the $33.4 billion pandemic relief package had been exposed to varying scales of fraud.

In September, the regulator said its tiered investigation had identified around $9.7 billion of expenditure meant for relief programs like unemployment and poverty grants were showing “indicators of a higher risk of fraud.”

That triggered uproar on social media platforms as record unemployment and an economic recession pre-dating the pandemic hurt millions.

In response to the audit and its own investigations, the Labour Minister Thulas Nxesi suspended the head of the unemployment fund and four other executives.

Releasing the second phase of the audit report in a televised briefing, Auditor-General (AG) Tsakani Maluleke said weaknesses in the system, such as incorrect calculation of benefit amounts, fraud and double-dipping, were being addressed.

 “It is encouraging to note that, as at October 2020, the fund (UIF) has recovered about 3.4 billion rand ($228 million) of funds that may have been disbursed incorrectly,” Maluleke said.

“Progress has been made in addressing the previously identified system weaknesses. However, since most of these enhancements were made during September, we still identified payments that will need to be investigated, although there are far fewer.”

The unemployment fund paid out $3.3 billion of jobless claims between March and October, Nxesi said in October.

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