UIF looks to updated databases to strengthen payment controls

Simnikiwe Mzekandaba
By Simnikiwe Mzekandaba, IT in government editor
Johannesburg, 14 Sept 2020

To address some of its information technologyshortcomings, the Unemployment Insurance Fund (UIF) has turned to the updated databases of other government entities for much-needed help.

The UIF reveals it has partnered with a number of government institutions, including the South African Social Security Agency (SASSA), National Students Financial Aid Scheme and the Department of Home Affairs, to get access to their updated databases.

Acting commissioner Marsha Bronkhorst says the move is to ensure the UIF minimises the fraud-related risks of the Temporary Employer/Employee Relief Scheme (TERS) payments.

These departments and institutions are currently busy verifying the UIF database to ensure payments reach the correct persons, states Bronkhorst.

“We have updated our system to make sure the bank verification happens quicker and these include verifications for schools, NGOs, etc,” she notes. “We are also working hard currently on improving our COVID-19 TERS application portal to make sure that to the extent possible, it becomes a self-service portal to make it easy for employers and employees.”

The acting commissioner believes the system should be up and ready to help workers as soon as possible to provide financial relief, especially to those who are still under lockdown conditions.

Throughout the duration of disbursing COVID-19 relief funds, the UIF system became a target of fraud and corruption by employees and employers who made false claims amounting to millions of rands.

Earlier this month, the auditor-general (AG) of SA released a damning report on the financial management of government’s multibillion-rand COVID-19 relief initiatives, such as the R350 Social Relief of Distress grant and TERS, which the UIF is charged with administering.

The report found the fund’s IT systems were not agile enough to meet the payment objectives of the COVID-19 relief funds.

As a result, the lack of validation, integration and sharing of data across government platforms resulted in people, including government officials, receiving benefits and grants they were not entitled to, and applicants being unfairly rejected as a result of outdated information, it noted.

The AG’s report pointed out that the databases of government institutions like home affairs and the South African Revenue Servicecarry data on almost everyone in the country.

However, the AG’s findings showed the “rich” data was not integrated, not shared across government or effectively used by the UIF and SASSA, and similar entities, to check if people applying for benefits and grants qualify for these.

Halted payments

The UIF is a public entity of the Department of Employment and Labour (DEL), whose mandate is to provide short-term relief to workers who qualify for benefits.

Due to the COVID-19 outbreak, the fund was charged with capturing and disbursing TERS benefits.

The COVID-19 TERS benefits were necessitated by the global breakout of the coronavirus, resulting in the shutting down of economies due to the introduction of stringent national lockdown measures in a bid to contain the spread of the virus.

Bronkhorst indicates the UIF has, to date, received just over 1.1 million applications for the payment of COVID-19 TERS benefit and has paid 825840 of these, which equates to just under R42 billion.

However, the DEL and the fund have decided to temporarily pause payments for new and outstanding applications for the COVID-19 TERS relief benefits.

This, they say, is to improve controls as urged by the auditor-general.

According to the department, the halt will enable the UIF to not only deal with the gaps identified by the AG, but also offers the opportunity to ensure that some of the improvements that had already been identified by management are implemented.

"Whilst the AG has shown us a number of deficiencies in the payment of the COVID-19 TERS benefits, I must hasten to add that many of these deficiencies had been picked up already by management,” explains Bronkhorst. “Some had already been corrected in the June payments but we will continue to improve the systems so that it responds to the needs of our beneficiaries, and make the payments effective and efficient.

"As soon as the improvements are finalised, we will be in a position to ensure that workers of this country are provided a cushion to make their lives easier.”

For those who have defrauded the system, the acting commissioner warned the law will take its course.

“There are already some cases that we have brought to the SAPS for investigation and prosecution – 35 out of a total of 146. This also serves as a notice to those who may have intentions to try and defraud the system. Not only will it be harder to do so, but even if they do succeed, the law will eventually get them and they will pay for stealing from the workers."

In addition, the Special Investigating Unit has started with its investigation into fraudulent claims and action will be taken against all found involved in fraudulent activities, she concludes.