A case of fraud has been opened against a Western Cape NPO which stands accused of illegally applying and receiving close to R5-million for the COVID-19 Temporary Employer/Employee Relief Scheme (TERS).
Not only did the Uniondale Integrated Empowerment Project (UNIEP) apply illegally for the funds but they also kept part of the proceeds in the name of bank charges which meant that the employer benefitted illegally to the tune of R96 000.00
This case came about as the Department of Employment and Labour this week received and responded to a complaint about an employer in Uniondale who claimed for TERS funds on behalf of 520 employees even though their contract of employment was terminated on 25 March 2020. Uniondale is a small agricultural town approximately 120 kilometres from George.
The business is a non-profit organization contracted by the Department of Public Works to perform Expanded Public Works Programme (EPWP) projects in the area ranging from classroom assistants, vegetable gardens, home-based cares, Early Childhood Development sector, HIV and AIDS awareness programmes and cleaners at government departments and institutions. The organisation had employed approximately 520 workers.
The COVID-19 TERS was one of the instruments instituted by government as part of the R500-billion relief package. The COVID-19 TERS is a specialised fund which is administered by the Unemployment Insurance Fund (UIF) for workers whose salaries have been affected by the implementation of the National State of Disaster and subsequent lock-down period while they are still employed.
The Provincial Chief Inspector (PCI), David Esau, met with the CEO of the organisation as well as with some of the employees who confirmed that they received payments.
The Inspectorate established that the organisation received TERS funds during the following periods:
• 27 March to 31 April: The employer received R1 356 560.23 for 337 of 505 employees
• 1 May to 31 May: The employer received R1 148 628.74 for 322 of 519 employees
• 1 June to 31 June: The employer received R1 218 591.30 for 353 of 519 employees
• 1 July to 15 August: The employer received R1 048 057.56 for 198 of 518 employees
• 16 August to 15 September: Application submitted for 491 employees, no payment received yet.
A total amount of R4 771 837.83 was paid out to the employer in TERS monies. The Department is awaiting proof that the employer paid it over to the employees as the employees at the time could not confirm all the amounts. The Department was also provided with a copy of an agreement that was concluded between the employees and the employer, which allowed for the employer to make a deduction of 5% towards banking fees although it is a requirement of the employer to apply on behalf of the employees and pay the monies in the account of the employees. The 5% amounted to an amount of approximately R96.000.00 which the employer kept in his account.
The matter will now be registered with the Oudtshoorn Police Service as a fraud matter because the employer declared that the employees are receiving reduced salaries and are still employed although the Department can confirm that the contracts of the employees were terminated on 25 March 2020.
The work of the Inspectorate will serve to amplify the “follow the money” initiative of the UIF where similar auditing processes are followed to determined that the correct TERS amounts were paid to eligible recipients.
Source: Government of South Africa