DEPARTMENT OF EMPLOYMENT AND LABOUR BRIEF TO SELECT COMMITTEE (UIF) COVID 19TERS 2020 - 6 October 2020
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1
DEPARTMENT OF EMPLOYMENT AND
LABOUR
BRIEF TO SELECT COMMITTEE (UIF)
COVID 19TERS 2020
6 October 2020
1
2
FOCUS AREA
Purpose of the report
1.
Directives
2.
Applications Closing Dates
3.
ICT Development
4.
COVID19TERS Progress Report
5.
6. COVID19TERS Audit Action Plan
7. Overall Control Improvement
3
PURPOSE OF THE REPORT
The purpose of the report is to provide
feedback to the Select Committee on
the progress made for COVID-19
Disaster Benefit and normal UIF relief
plan since the President announced the
start of Lockdown in order to derail a
further infection in the country.
3
4
DIRECTIVES
• On the 23 March 2020, the President announced a national lockdown for 21 days from 27 March
2020. Since then, the Minister of Employment and Labour has issued the following directives:
• Directive 1 signed on 26 March 2020: The introduction of the National Disaster Benefit to be used
for social security during the lockdown period meant to assist employers and employees that
suffer financial distress as a direct result of Covid-19 pandemic.
• Directive 2 signed on 06 April 2020: The amendment of Directive No 1 to enhance the COVID-19
TERS benefit and clarification of sliding scale (38%-60%) and R 3500.00 minimum wage.
• Directive 3 signed on 09 April 2020: The amendment of Directive No 1 and 2 after consultation
with Social Partners to legalize and compel employers to apply on behalf of their employees.
• Directive 4 signed on 26 April 2020: The amendment of Directive No. 1, 2 and 3 to remove section
12 on Calculation of Covid-19 TERS benefits to top up the salaries of employees who received
income from their employers.
• Directive 5 signed on 30 April 2020: Make provision for Employees to apply for COVID-19 TERS for
themselves if their Employer is unable to or refuses to apply for them.
• Directive 6 signed on 25 May 2020: To define a contributor; or an employee as defined by the UI
Act who should have received benefits under this Directive.
4
5
APPLICATIONS CLOSING DATES
The closing dates for new COVID-19 TERS applications are set as
follows:
• Applications for March 2020 to end May 2020 closed on the 25
September 2020, and no further applications for that period be
accepted beyond that date;
• Applications for June 2020 shall close on 15 October 2020, and
no further applications for that period, shall be accepted beyond
that date; and
• Applications for July to 15 September 2020 shall close 30 October
2020, and no further applications for that period, shall be
accepted beyond that date.
56
ICT DEVELOPMENT
The UIF ICT had to develop new IT operational and financial system in order to
put the above directives into effect, as none of these processes existed in their
normal UIF benefit programme. The following has been development has been
implemented:
• Automated sending of spreadsheet containing payment breakdown of
employees to be paid;
• Automated functionality for employers to see status of the claim and
download the payment schedule;
• Automated functionality for employees to see how much they have been
paid by UIF against what the employer paid them. Further, all companies
paid are available on the website;
• Additional security measures (removing payment status for employer on the
landing page, limit the changing of password and banking details) has been
made to minimize the alleged fraud claims; 67
ICT DEVELOPMENT
• Additional functionality to verify all bank accounts for all
employers/Associations prior to payment where employers put
the CIPC/company registration number;
• The fund has automated the process for bank verification, which
went live on 29 July 2020; and
• Identity numbers for applicants has been verified against the
databases of Department of Home Affairs, DPSA, SASSA and
Correctional Services.
78
COVID19TERS PROGRESS REPORT
89
VALID APPLICATIONS COVID19TERS
The following table depicts valid applications for COVID19TERS:
Date Employers Employees Amount
April 2020
405 225 4 152 768 R 20 857 366 786.37
May 2020 262 913 2 944 102 R 11 959 694 583.37
June 2020 201 230 2 719 903 R 10 171 175 026.90
July – Aug 2020 5 484 117 234 R 543 888 881.66
Overall Totals 874 852 9 934 007 R 43 532 125 278.30
9COVID 19 TERS BENEFITS PROVINCIAL 10
BREAKDOWN
The following table depicts COVID19TERS benefits provincial breakdown:
Province Employers Employees Amount
Eastern Cape 57 971 563 894 R 2 399 850 261.77
Free State 45 098 349 289 R 1 465 427 178.17
Gauteng 349 124 4 577 956 R 20 802 384 564.41
Kwa Zulu Natal 132 072 1 580 621 R 6 560 520 815.71
Limpopo 30 800 281 588 R 1 143 878 016.99
Mpumalanga 48 406 559 485 R 2 330 737 071.44
Northern Cape 13 089 97 029 R 429 864 996.14
North West 28 786 266 310 R 1 208 159 652.33
Western Cape 169 500 1 657 836 R 7 191 302 721.35
Total 874 845 9 934 007 R 43 532 125 278.30
1011
CUMULATIVE NON COVID-19 BENEFIT
PAYMENT SINCE LOCKDOWN INCEPTION
The following table depicts non-COVID19 payments from 26 March 2020 – 25 September 2020:
Benefit type Beneficiaries Amount paid
Unemployment 979 596 R 5 539 404 353.92
Maternity 183 674 R 1 038 638 316.36
Dependant 36 735 R 207 727 663.27
Illness and Adoption 24 490 R 138 485 108.85
Total 1 224 495 R 6 924 255 442.40
1112
COVID19TERS AUDIT ACTION PLAN
1213
ACTION PLAN – UIF COVID19TERS
AUDIT OBSERVATIONS
No Findings Audit Observation AG Action Plan Progress Status – Time Frames
Recommendations 28 September 2020
1 Non-compliance We noted that the Prior to Clear The probity review 28/08/2020
with the instruction service provider was procurement, a independent process was
note. contracted as a sole thorough review of evidence will be introduced as part
provider without any the process sought to support of the SCM
independent evidence followed by SCM the sole service processes to
by the Fund to justify should be provider status ensure compliance
the selected service performed to prior to approval to the procurement
provider as a sole ensure that SCM and awarding of prescripts.
provider. prescripts are fully a contract.
complied with. The matter is The SIU Officials 30/9/2020.
under have started the
investigation by investigation on
the Special the 7th of
Investigating September .
Unit.
Probity to form Supply Chain 01/09/2020.
part of every step Management
of the policy has been
procurement reviewed to
process. include probity.
The Policy is going
through the
approval process.
Compliance The checklist of 31/10/2020.
check on the post award
transaction will activities will be
be conducted. developed.14
ACTION PLAN – UIF COVID19TERS AUDIT
OBSERVATIONS
No Findings Audit Observation AG Action Plan Progress Status – Time Frames
Recommendations 28 September
2020
2 Discrepancies We noted that there The reason for A clear The probity 30/09/2020.
relating to the were instances using a service independent review process
appointment of where information provider as a evidence will was introduced
service providers. provided in the bids sole service be sought to as part of the
was not supported provider should support the SCM processes
by evidence. be researched sole service to ensure
There were also and clear provider status compliance to
instances where documented prior to the
specifications were prior to approval approval and procurement
used to motivate the and award of the awarding of a prescripts.
appointment of a contract. contract.
service provider to The Accounting The matter is The SIU 07/9/2020.
the bid adjudication Officer should under Officials have
committee which investigate and investigation started the
were not a implement by the Special investigation on
requirement in the consequence Investigating the 7th of
initial approved bid management in Unit. September .
specifications. line with the Compliance The checklist of 31/10/2020.
National check on the post award
Treasury transaction will activities will be
regulations. be conducted. developed.15
ACTION PLAN – UIF COVID19TERS AUDIT
OBSERVATIONS
No Findings Audit Observation AG Action Plan Progress Status – Time Frames
Recommendations 28 September
2020
3 Unfair awarding A contract was The Transparent The probity 30/09/2020
of contract. awarded to a specifications and clear team has
service provider that should be specifications commenced
achieved the transparent and and with the
second position on the criteria for functionality specification
price and evaluation on evaluation review. Each
preference point. functionality criteria will be specification
This is in should be clear developed and will be signed
contravention of and known to subjected to a off prior to
section 51 of the each service probity process. advertisement.
PFMA and the provider. The matter is The SIU 07/09/2020
Preferential under Officials have
Procurement investigation by started the
Regulations. the Special investigation on
Investigating the 7th of
Unit. September .16
ACTION PLAN – UIF COVID19TERS AUDIT
OBSERVATIONS
No Findings Audit Observation AG Action Plan Progress Status – Time Frames
Recommendations 28 September
2020
4 Fraud risks related Lack of That the fund Information on Detailed 30/09/2020.
to the manual independent considers the the 110 reconciliation
application review or fraud risks and applications was performed
process. reconciliation the related that were on all manual
performed to control processed application files.
ensure that all weaknesses and during manual Furthermore,
applications develop a process will be the
received through response for re confirmed COVID19ters
the dedicated mail each in order to with the application
box from improve the employer process was
employers and control records during automated.
bargaining councils environment. the Follow the
were dealt with Money process.
appropriately and In the The internal 24/08/2020.
that none of the meantime, 110 post verification
emails received manual team conducted
were deleted. transactions will manual
be given to the verification on
verification 37 transaction
team for follow which were
up. completed on
the 24th of
August 2020.17
ACTION PLAN – UIF COVID19TERS AUDIT
OBSERVATIONS
No Findings Audit Observation AG Action Plan Progress Status – Time
Recommendations 28 September 2020 Frames
5 Fraud risks related to No or limited That the funds Perform Fraud Risk 21/09/2020
the manual and controls in place to consider the fraud comprehensive Assessment was
online application detect/ prevent risks and the Fraud Risk comprehensively
process. inflated salaries on related control Assessment performed on the
the applications. weaknesses and 11/06/2020.
develop a The latest fraud
response for each risk assessment
in order to was conducted on
improve the the 21st of
control September 2020.
environment.
6 Fraud risks related to We established that That fund should To address audit The change 20/08/2020
the manual the system used a review the /risk issue the request for salary
application process. standard lock down calculation of the business rule will be verification on
period of 35 days to TERS benefit to changed to Siyaya system
calculate the benefit ensure that it is accommodate the was implemented.
amount. aligned to the salary given by the The system
gazette complying development was
regulations. employers during tested and went
the declaration LIVE on the 6th of
process from September 2020.
January 2020.This
will be implemented
for covid19 claims
starting from July
and August.18
ACTION PLAN – UIF COVID19TERS AUDIT
OBSERVATIONS
No Findings Audit Observation AG Action Plan Progress Status – Time Frames
Recommendations 28 September 2020
7 Inadequate We established that The fund should Improve The COVID-19 01/09/2020
verification of the Fund UIF only enhance the COVID-19 TERS controls
employer details. used the UIF controls to verify TERS controls were improved
reference number to the existence of and the
verify the registration employers to verification
status of the include employer process now
employers. However, specific details includes;
this poses a high risk such as trade 1. Enterprise
of manipulation of the number, CIPC number;
application process number and email 2. CK or
and exposes the fund address. CIPC number;
UIF to financial loss. 3. Identity
number for NPO;
4. Trade
Name
The bank
verification is
conducted on a
daily basis and the
results of the
verification are
posted on the
application portal
and was
implemented on
the 27th July
2020.19
ACTION PLAN – UIF COVID19TERS AUDIT
OBSERVATIONS
No Findings Audit Observation AG Action Plan Progress Status –28 Time
Recommendations September 2020 Frames
8 Lack The system does not The fund should The on –line In case where the claim 30/09/2020
verification of prohibit a single implement controls portal to was made by the
applicant applicant from to verify applicants indicate if the representative, then the
representing representing and representing claim was made system only allows for
employers. submitting claims on multiple employers. by the employer identity number of the
behalf of multiple or third party. representative,
employers and/or authorization letter to be
bargaining councils. As downloaded and number
a result, there was 21 of the claims lodged by the
registered applicants representative.
that that submitted
applications The payment of the TERS
representing 442 claims to be released only
employers/ bargaining to the employer banking
councils. Moreover, the details after bank
applicants are not verification utilizing the
required to submit any following controls:
form of evidence to • CK Number
confirm that they are • ID Number
duly appointed by the • Foreign National
institutions they claim to • Tradename
be representing.
Therefore, no payments
will be processed to
representatives of the
companies. The solution
went live on 12 July 2020.20
ACTION PLAN – UIF COVID19TERS AUDIT
OBSERVATIONS
No Findings Audit Observation AG Action Plan Progress Status –28 Time
Recommendations September 2020 Frames
9 Inadequate We established that The fund should Automate the bank UIF automated the 30/09/2020
system the system used to implement verification process for bank verification
functionality for receive TERS benefit preventative Employers and process for
bank applications does not controls that will Employees. Employers and
confirmation of check the banking allow for Employees.
uploaded details of the confirmation of The bank
documents. employers or banking details verification is
bargaining councils when employers conducted on a
against the bank and bargaining daily basis and the
confirmations which councils are the results of the
are submitted by recipients of verification are
applicants upon claimant funds, posted on the
registration. before the funds application portal.
are paid out. Verify each payment UIF automated the 01/09/2020
against ID number for bank verification
employees, CK or process for
CIPC number for Employers and
registered companies Employees.
and trade name or The bank
identifier number for verification is
Non Profit conducted on a
Organizations. daily basis and the
results of the
verification are
posted on the
application portal.21
ACTION PLAN – UIF COVID19TERS AUDIT
OBSERVATIONS
No Findings Audit Observation AG Action Plan Progress Status Time
Recommendations –28 September Frames
2020
10 Lack of verification We established that That the fund should To address audit /risk The change 22/08/2020
of employee the system used to perform a verification issue the business rule request for
salaries submitted receive TERS benefit of the salary data will be changed to salary
during benefit applications does not and ensure that in all accommodate the salary verification was
claims. validate the salaries instances of given by the complying completed and
validate the salary overpayment a employers during the implemented
figures against the process is initiated to declaration process from for lockdown 4.
salaries already recoup funds. January 2020.This will be The Solution
declared to the UIF. implemented for covid19 was tested and
claims starting from July went live and
and August was
implemented
during the
application
process for
lockdown levels
4 and 5.22
ACTION PLAN – UIF COVID19TERS AUDIT
OBSERVATIONS
No Findings Audit Observation AG Recommendations Action Plan Progress Status –28 Time
September 2020 Frames
11 Incorrect The system That the fund reviews Remove Section Directive number 3, 30/04/2020
system verifications for the calculation to 12(1)(b) on Directive signed on the 12th April
calculations of the calculation of determine its number 3 2020 removed Section
the TERS the claimant correctness in line 12(1)(b) which
benefit payment lockdown period with the gazette considered salary. The
for the first for the 1st regulations. directive is being
lockdown lockdown, i.e. 27 th
implemented on 30 Apr
period. March 2020 to 30 until 24th May 2020
April 2020, was Recalculate all All benefits submitted for 25/05/2020
observed to be benefits submitted for the first lockdown were
incorrect. In the first lockdown and re-calculated and the
calculating the the short-payment short-payment was
benefit amount, was disbursed. disbursed. The business
the portion of the rule was amended on the
salary that was TERS system on the 25th
paid by the May 2020
employer was not Verify and confirm Salary portion lockdown 01/05/2020
taken into account salary portion for submitted was verified
in reducing the lockdown with the and confirmed with the
amount to be paid Employer. Employer. Any
by the fund UIF as overpayment was noted
a benefit to the and will be recovered
employee. from further benefits
noted on the TERS
system and will be
concluded and closed as
soon as April and May
claims are closed23
ACTION PLAN – UIF COVID19TERS AUDIT
OBSERVATIONS
No Findings Audit Observation AG Action Plan Progress Status –28 Time
Recommendations September 2020 Frames
12 Applicants Individuals below We recommend that To conduct The UIF has reported the 31/08/2020
that are below the legal age of the UIF collaborate investigations matter to the SAPS and 56
the legal age employment of 15 with other state organs criminal cases were
of years were paid by and law enforcement opened. Case numbers
employment. the UIF. A total agencies in the are available.
amount of R 224 intelligence services Block all affected All affected reference 20/08/2020
677 was paid for 53 and the police and reference on the numbers were blocked on
applicants for the institute investigations COVID-19 TERS the COVID19ters system.
period up to 30 into payments made to system. The change request was
June 2020. persons that are below implemented on the 21st
the legal age of August 2020
employment.
The Fund has
implemented functionality
on the COVID 19 TERS
Admin Portal for the Risk
and Fraud Management
Directorate to block and
unblock employers on the
portal without referring to
ICT to block and unblock
Forward all All transactions were 20/08/2020
transactions to the forwarded to the
Inspection and Inspection and
Enforcement Enforcement Services to
Services to follow up follow up on the matter as
on the matter as it it affects labour relations.
affects labour The list of transactions
relations. was submitted to IES.24
ACTION PLAN – UIF COVID19TERS AUDIT
OBSERVATIONS
No Findings Audit Observation AG Action Plan Progress Status –28 Time
Recommendations September 2020 Frames
13 Identity We identified a claim We recommend that The matter to be The matter was subjected to 22/08/2020
number same for the TERS benefit the UIF collaborate referred to investigation for possible
as that of a UIF that was paid for an with other state forensic fraud. Investigation in
employee. individual that has the organs and law investigation. progress- Company
same ID number as a enforcement confirmed that the employee
UIF employee. This agencies in the was working for them
application was paid intelligence services previously and resigned on
out R4 027. and the police and the 19th December 2020. An
institute amount of R4027 paid for
investigations into the employee was refunded
payments made to to the Fund. Evidence for the
the UIF employee. refunds was obtained.
UIF PERSAL data The business rule was 04/09/2020
to be verified developed to block all UIF
through data employees id numbers from
analytics. applying for the
COVID19ters benefit.
Management to UI Commissioner wrote a 30/09/2020
write a letter to the letter to the UIF employee to
UIF employee to confirm whether she
confirm whether received the money. The
she received the employee confirmed that the
money. COVID-19TERS funds were
not received. The employee
bank account was also
verified.25
ACTION PLAN – UIF COVID19TERS
AUDIT OBSERVATIONS
No Findings Audit Observation AG Action Plan Progress Status –28 Time Frames
Recommendations September 2020
14 Deceased We identified We recommend that Process dump data Data dump was done. 15/09/2020
individuals were individuals who the UIF collaborate
paid TERS were indicated as with other state COVID 19 TERS data was
benefit. deceased per organs and law submitted to DHA for
home affairs data enforcement verification and feedback
base however they agencies in the was received to avoid
were indicated by intelligence services processing payment to
UIF as having and the police and deceased applicants. From
received the TERS institute the feedback received from
benefit. A total investigations into DHA, script was ran on the
amount of R441 payments made to COVID 19 TERS database
144 was paid for deceased persons. to pick up any applications
the period ending of employees who were
30 June 2020 in deceased prior and during
this regard. lockdown periods. The
results will be submitted to
Risk and Fraud
Management Unit for
further investigation and
blocking of the profiles.
Ensure a reliable The FTP data source is 14/09/2020
FTP data source now more reliable and
consistent
Perform data Data analytics against 11/09/2020
analytics against portal data was conducted
Portal data. on the 11th September
2020.26
ACTION PLAN – UIF COVID19TERS AUDIT
OBSERVATIONS
No Findings Audit AG Action Plan Progress Status –28 September Time Frames
Observation Recommendati 2020
ons
14 UIF to re-test integration Letter from DEL DG was sent to 04/09/2020
cont link of data between UIF DHA DG for the approval of data
and Home Affairs verification between two
departments and DHA DG
approved. Thereafter, data
verification commenced and was
finalised.27
ACTION PLAN – UIF COVID19TERS AUDIT
OBSERVATIONS
No Findings Audit AG Action Plan Progress Status –28 September Time Frames
Observation Recommendati 2020
ons
14 COVID-19 TERS database COVID-19 TERS database sent to 04/09/2020
cont to be sent to Home Affairs Home Affairs for verification and
for verification and updating updating of date deceased and
of date deceased and validity of the ID Number. This is
validity of the ID number. also include verification of foreign
national information. The ID
numbers were verified by UIF.
COVID 19 TERS data was
submitted to DHA for verification
and feedback was received for the
confirmation of the validity of all ID
numbers and deceased date of
the applicants on the COVID 19
TERS database.
Further engagements between the
two departments are continuing
with regards to Foreign national
data verification.
Change of business rule to Change request implemented. 20/08/2020
block affected employers
All affected employers were
blocked on the COVID 19 TERS
system until all investigation have
been finalized by Risk and Fraud
Management Unit28
ACTION PLAN – UIF COVID19TERS AUDIT
OBSERVATIONS
No Findings Audit AG Action Plan Progress Status –28 Time
Observation Recommenda September 2020 Frames
tions
14 To put payment on hold All claim processing and 20/08/2020
cont for June and July claims payments for all the lockdown
periods were put on hold until
the recommended system
controls are implemented.
Subsequently, payments
resumed.
Subject all transactions to The investigation is in 22/08/2020
fraud investigations. progress. The Case number
is 423-8-2020.
All affected employers were
blocked on the COVID 19
TERS system until all
investigation have been
finalized by Risk and Fraud
Management Unit29
ACTION PLAN – UIF COVID19TERS AUDIT
OBSERVATIONS
No Findings Audit AG Action Plan Progress Status –28 September Time
Observation Recommendations 2020 Frames
15 Individuals There were We recommend Confirm the status of ID COVID 19 TERS data was 19/08/2020
who are individuals that the UIF numbers with the submitted to Correctional
imprisoned who were collaborate with Department of Service for verification and
were paid indicated as other state organs Correctional Services feedback was received for the
TERS benefit. having and law confirmation of inmates status
received the enforcement on the COVID 19 TERS
TERS benefit agencies in the database. From the feedback
however these intelligence received from Correctional
individuals services and the Services, script was ran identify
were indicated police and applicants who were active
as being in institute during and prior to the periods
prison. The investigations into utilizing the admission date and
total amount of payments made release date from the
R 169 900 to inmates. Correctional Service verification
was paid for feedback. Those applicants find
period ending to be active have been referred
30 June 2020 to Risk and Fraud Management
in this regard. for further investigation.30
ACTION PLAN – UIF COVID19TERS AUDIT
OBSERVATIONS
No Findings Audit AG Action Plan Progress Status –28 Time
Observation Recommendatio September 2020 Frames
ns
15 Change of business Change request implemented. 20/08/2020
cont rule to block affected
employers All affected ID numbers were
blocked on the COVID 19
TERS system until all
investigation have been
finalized by Risk and Fraud
Management Unit
The Fund has implemented
functionality on the COVID 19
TERS Admin Portal for to verify
ID numbers and check the
release date of the prisoner. No
application is considered prior
to the release date.
To put payment on hold All claim processing and 20/08/2020
for June and July payments for all the lockdown
claims periods were put on hold until
the recommended system
controls are implemented.
Subsequently, payments
resumed.31
ACTION PLAN – UIF COVID19TERS AUDIT
OBSERVATIONS
No Findings Audit Observation AG Action Plan Progress Status –28 September Time
Recommendations 2020 Frames
15 Change of business Change request implemented. 20/08/2020
Cont rule to block
affected employers All affected ID numbers were
block on the COVID 19 TERS
system until all investigation
have been finalized by Risk and
Fraud Management Unit
The Fund has implemented
functionality on the COVID 19
TERS Admin Portal for to verify
ID numbers and check the
release date of the prisoner. No
application is considered prior
to the release date.
To put payment on All claim processing and 20/08/2020
hold for June and payments for all the lockdown
July claims periods were put on hold until
the recommended system
controls are implemented.
Subsequently, payments
resumed.32
ACTION PLAN – UIF COVID19TERS AUDIT
OBSERVATIONS
No Findings Audit Observation AG Action Plan Progress Status –28 September Time
Recommendati 2020 Frames
ons
16 Double dipping Individuals who That the fund Conduct verification Verification was done through 01/09/2020
received should perform through u-filing u-filing declarations and SARS
UIFs/benefits from a verification of declarations and SARS information. The debt collection
other state the salary data information. is in place and the Fund has
institutions and ensure collected R930 million. A hold
(including that in all was placed to all UI Reference
remuneration in instances of numbers for further review.
some instances) overpayment a
were paid by the process is
UIF. A total initiated to
amount of recoup funds.
R140 556 822
was paid for 35 NSFAS Confirm ID numbers NSFAS responded indicating 07/09/2020
043 applicants for students were and beneficiary that they are not aware of any
the period up to paid TERS information with restrictions that if a person is
30 June 2020. benefit claim NSFAS NSFAS funded student you may
amounting to not benefit from UIF COVID19
R10 335 344; Scheme.
Therefore, the Fund will
proceed with the payments in-
spite of student funding.33
ACTION PLAN – UIF COVID19TERS AUDIT
OBSERVATIONS
No Findings Audit AG Action Plan Progress Status –28 September Time
Observation Recommendations 2020 Frames
16 SANDF paid Confirm the status of Letter sent to SANDF to 23/08/2020
Cont beneficiaries were the ID numbers and confirm status of the id
paid TERS benefit beneficiary information numbers and beneficiary
claim amounting to with SANDF information.
R327 638; Request business rules UIF requested business rule 23/08/2020
and requirement for and requirement for SANDF
SANDF beneficiaries. beneficiaries.
The Fund is awaiting the formal
response
Conduct verification The Fund has submitted 20/08/2020
exercise on all PERSAL COVID 19 TERS data to DPSA
employees who applied for verification to avoid double
for COVIDTERS dipping in order for the Fund to
benefit. block applicants and employers
who are/ were active during
lock period of COVID (27
March 2020 to until to date)34
ACTION PLAN – UIF COVID19TERS AUDIT
OBSERVATIONS
No Findings Audit AG Action Plan Progress Status –28 Time
Observation Recommendations September 2020 Frames
16 Disability grant Confirm the status of ID SASSA confirmed that an 01/09/2020
Cont recipients paid numbers with SASSA individual can work while in
beneficiaries were receipt of SASSA grants.
paid TERS benefit Therefore the position of the
claim amounting to department is to continue with
R69 419; COVID 19 TERS Benefits
and provide SASSA with the
extract of the COVID 19
TERS database to determine
further eligibility of the grant.35
ACTION PLAN – UIF COVID19TERS AUDIT
No Findings
OBSERVATIONS
Audit AG Action Plan Progress Status –28 September 2020 Time
Observation Recommendations Frames
16 Old age grant Confirm the status SASSA confirmed that an individual 24/08/2020
Cont recipients paid of ID numbers with can work while in receipt of SASSA
beneficiaries were SASSA. grants. Therefore the position of the
paid TERS benefit department is to continue with
claim amounting to COVID 19 TERS Benefits and
R88 814 684. provide SASSA with the extract of
the COVID 19 TERS database to
determine further eligibility of the
grant.
17 Banking Four (4) We recommend that Conduct Post verification process on these 17/08/2020
details same applications for the UIF collaborate verification UIF officials was conducted and it
as those UIF Individuals with other state exercise to all four was confirmed that they are
employee. sharing the organs and law (4) employees. registered as Domestic employers
same banking enforcement and the evidence that the payment
details as UIF agencies in the was made to domestic employees.
employees and intelligence services
paid by the UIF and the police and Conduct Compliance check conducted to the 20/08/2020
amounted to institute Compliance check affected reference numbers.
R14 614. investigations into to the affected
payments made to reference All UIF employees complied with the
UIF employees. numbers. UI act and contributions act.36
ACTION PLAN – UIF COVID19TERS AUDIT
OBSERVATIONS
No Findings Audit Observation AG Action Plan Progress Status –28 September Time
Recommendations 2020 Frames
18 Individuals Twelve (12) We recommend The Fund The Fund automated the bank 11/08/2020
sharing applications for that management automated the bank verification process for
banking Individuals institute an verification process Employers and Employees.
details. sharing the same investigation to for Employers and
banking details address the Employees. The bank verification is
and paid by the control deficiency conducted on a daily basis.
UIF amounted to and prevent future
R53 971. recurrences of the
control breakdown.
Each payment is The bank verification is 11/08/2020
verified against id conducted on a daily basis and
number for the results of the verification are
employees, CK or posted on the application portal.
CIPC number for To write a letter to the affected
registered companies to confirm the
companies and accuracy of banking details.
trade name or
identifier number for
Non Profit
Organizations37
ACTION PLAN – UIF COVID19TERS AUDIT
OBSERVATIONS
No Findings Audit Observation AG Action Plan Progress Status –28 Time Frames
Recommendations September 2020
19 Individuals We identified 4 161 We recommend Letter sent to Letter from DEL DG was 23/08/2020
with invalid payments with an that the UIF Department of sent to DHA DG for the
identity amount of R collaborate with Home Affairs to approval of data verification
numbers. 30 071 248 made to other state organs confirm status of id between two departments
individuals with invalid and law numbers. and DHA DG approved.
ID numbers. enforcement Thereafter, the LIVE data
agencies in the feed was finalised.
intelligence UIF to re-test The current solution, the 04/09/2020
services and the integration link of Fund submitted a copy of
police and institute data between UIF the COVID 19 TERS
investigations into and Home Affairs. database to DHA for
payments made to verification and feedback
individuals with was received. Long term
invalid ID solution, the Fund will
numbers. develop a direct/live link to
the DHA for immediate
verification of applicants ID
numbers and passport
numbers38
ACTION PLAN – UIF COVID19TERS AUDIT
OBSERVATIONS
No Findings Audit Observation AG Action Plan Progress Status –28 Time Frames
Recommendations September 2020
19 Individuals We identified 4 161 We recommend Change of business Change request 01/09/2020
cont with invalid payments with an that the UIF rule to block implemented.
identity amount of R collaborate with affected employers
numbers. 30 071 248 made to other state organs and put payments All claim processing and
individuals with and law on hold for June payments for all the
invalid ID numbers. enforcement and July 2020. lockdown periods were put
agencies in the on hold until the
intelligence recommended system
services and the controls are implemented
police and institute
investigations into
payments made to
individuals with
invalid ID
numbers.39
ACTION PLAN – UIF COVID19TERS AUDIT
OBSERVATIONS
No Findings Audit Observation AG Action Plan Progress Status –28 September Time
Recommendations 2020 Frames
20 Double We identified It is Letters sent to The functionality was 01/09/2020
dipping individuals that recommended relevant Departments implemented to block double
within UIF. received payments that management to confirm status of id dipping of benefits in UIF. The
on claims submitted should investigate numbers. Fund will raise overpayments to
for both normal this matter and all the applicants find to have
benefits and TERS take appropriate double dipping of UIF Benefits.
benefit. A total action, the
amount of underlying control
R14 210 866 was deficiencies
paid for the period should be
ending 30 June improved. All transactions were The fraud investigators have 01/09/2020
2020 in this regard. subjected to fraud started performing the data
investigations. analytics for the investigation.
The process is at the execution
stage.40
ACTION PLAN – UIF COVID19TERS AUDIT
OBSERVATIONS
No Findings Audit Observation AG Action Plan Progress Status –28 September Time
Recommendations 2020 Frames
21 Payments We identified TERS We recommend Probity team to The exercise to conduct data 22/08/2020
above claims that were that the UIF perform data analytics on the system has
maximum paid in excess of the collaborate with analytics procedures commenced.
threshold. claims amount due. other state organs to verify existence
A total amount of and law and accuracy of
the overpayment enforcement Employer details.
was R 84 228 713 agencies in the Change of business Change request implemented 22/08/2020
for 1 183 applicants intelligence rule to block affected
for the period up to services and the employers. All affected employers were
30 June 2020. police and blocked on the COVID 19
institute TERS system until all
investigations into investigations have been
the finalized by Risk and Fraud
overpayments. Management Unit
Overpayment will be The debt collection process is 22/08/2020
raised where needed. in place. UIF has collected
R3.1 Billion up to 30
September 2020 through UIF
debt collection process.41
ACTION PLAN – UIF COVID19TERS AUDIT
OBSERVATIONS
No Findings Audit Observation AG Action Plan Progress Status –28 September Time
Recommendations 2020 Frames
22 Overpayments. There were We recommend Directive number 3, The error was corrected on the 22/08/2020
claimants that that the UIF signed on the 12th system and the re-run resulted
were paid more in collaborate with April 2020 removed in overpayment being raised
excess of the other state organs Section 12(1)(b) and the refund collected.
claim due to as and law which considered
result on the enforcement salary.
incorrect number agencies in the The first lockdown The correct lockdown period is 22/08/2020
of days being intelligence period included some being used.
used to calculate services and the days of March 2020,
the benefit. A police and hence number of
total amount of institute days are high.
R10 215 765 was investigations into System calculator The system calculator 22/08/2020
paid for 723 the was tested before functionality is working
applicants for the overpayments. being utilized. effectively and as intended.
period up to 30
June 2020.42
ACTION PLAN – UIF COVID19TERS AUDIT
OBSERVATIONS
No Findings Audit Observation AG Action Plan Progress Status –28 September Time
Recommendatio 2020 Frames
ns
23 Underpayments There were We recommend Directive number 3, The directive is being 22/08/2020
claimants that that signed on the 12th April implemented.
were paid less management 2020 removed Section
than the claims institute an 12(1)(b) which
amount due to investigation considered salary.
them. A total into the All benefits submitted The directive is being 20/08/2020
amount of the underpayments for the first lockdown implemented
underpayment . was re-calculated and
was R 250 919 the short-payment was
657 for 1 700 disbursed.
applicants for the Salary portion The directive is being 20/08/2020
period up to 30 submitted was verified implemented
June 2020. and confirmed with the
Employer. The Fund has implemented
additional system controsl to
verify salary with the internal
Claims System (Siyaya
System)43
ACTION PLAN – UIF COVID19TERS AUDIT
OBSERVATIONS
No Findings Audit Observation AG Action Plan Progress Status –28 Time
Recommendations September 2020 Frames
24 Duplicate An employer was We recommend Reconciliation Two way matching 22/08/2020
payments. paid three times for that the UIF between TERS and verification is used. The
the same collaborate with Computron is voucher is issued, cancelled
application. A total other state organs performed. and re-issued with the same
amount of R and law amount. It is not 3 different
597 456 was paid enforcement payments.
by the UIF. agencies in the Two way matching Two way matching 22/08/2020
intelligence verification is used. verification is used. The
services and the voucher is issued, cancelled
police and and re-issued with the same
institute amount. It is not 3 different
investigations into payments.
the overpayment.
25 Unsubstanti There were It is recommended Reconciliation Reconciliation between TERS 22/08/2020
ated transactions which that management between TERS and and Computron is performed
payment were paid, however should investigate Computron is on a daily basis.
made. these could not be this matter and performed.
reconciled back to take appropriate
the applications on action, the
the system. These underlying control
transactions deficiencies
totalled R 54 276 should be
240 for 801 improved.
applicants for the
period up to 30
June 202044
ACTION PLAN – UIF COVID19TERS AUDIT
OBSERVATIONS
No Findings Audit AG Action Plan Progress Status –28 Time
Observation Recommendations September 2020 Frames
26 Unsubstantiated There were It is recommended Reconciliation Reconciliation between 22/08/2020
applications transactions that management between TERS and TERS and Computron is
made. identified on the should investigate Computron is performed on a daily
application this matter and performed. basis.
system with no take appropriate
invoices that action, the
were which were underlying control
paid. These deficiencies should
transactions be improved.
totalled R1 374
154 248 for 235
710 applicants
for the period up
to 30 June 2020.
27 Payments to We identified It is recommended UIF requirements for The Directive issued on 20/08/2020
foreign payments that management COVID19ters are as the 25th of May 2020
nationals. amounting to should investigate follows: defined the worker and
R685 846 671 this matter and • There should be has been implemented as
which made to take appropriate employer- such. These payments
166 619 action, the employee were done in line with the
foreigners that underlying control relationship; Directive issued on the
did not have deficiencies should • Employer and 23/5/2020 which was also
contributions be improved. the employee retrospectively applied/
paid for by should be
employers for the registered on the
past 12 months. UIF database.
Foreign nationals met
the above rules.45
ACTION PLAN – UIF COVID19TERS AUDIT
OBSERVATIONS
No Findings Audit Observation AG Action Plan Progress Status –28 Time
Recommendations September 2020 Frames
28 Claims with There were 202 311 It is recommended To limit number of The number of updates were 22/08/2020
an transactions for with a that management updates during the limited during the application
application total amount of R1 should investigate application process. process and payment stage.
date after 192 846 962 which this matter and take The matter is The matter is subjected to 22/08/2020
payment were paid, however appropriate action, subjected to investigation.
date. the application date the underlying investigation.
was prior to the control deficiencies
payment date of the should be
claim. improved.
29 Employer Auditors were denied It is recommended The Employer will The Employer will be 04/09/2020
site visits. entry to the premises that management prioritised during the prioritised during the follow
and the officials cited should investigate follow the money the money process.
the company was not this matter and take process. .
sufficiently prepared appropriate action, .
to accommodate and the underlying The matter is The matter is subjected to 04/09/2020
assist the auditors control deficiencies subjected to investigation and at the
with in providing the should be investigation. execution stage.
required information. improved.
30 Claims with We noted TERS We recommend All the applications The system control is 22/08/2020
no benefit claims with no that management with no application working as intended.
Application application date. institute an date were not paid.
Date or investigation to All transactions are
approval address the control investigated.
date. deficiency and
prevent future
recurrences of the
control breakdown.46
OVERALL CONTROL IMPROVEMENT
4647
SUMMARY OF UIF COVID19TERS AUDIT
OBSERVATIONS
The UIF conducted the root cause analysis exercise on all audit observations received from the Auditor-
General. The Fund then developed an action plan which is a control-driven corrective action. The following
system application controls were enhanced:
✓ Payment made to deceased persons: UIF submitted 5 000 000 ID numbers to the Department of
Home Affairs for verification purpose. The above number was the total of applications received since the
beginning of the lockdown. The Department of Home Affairs provided the status of each ID number and
the UIF implemented a system business rule to reject any ID number which was not verified.
✓ Payment made to minors: The business rule was implemented on the system to block all the under
age applications received from the employers. The control is now effective.
✓ Payment made to government employees: The full set of data with date of appointment and
termination date was received from DPSA. Another business rule was introduced to reject any
government employees applying for the COVID19TERS benefit.
✓ Payment made to prisoners: The Department of Correctional Services provided data of all the
prisoners with the release date. The business rule implemented is looking at the release date and reject
any application made prior to the release date of the prisoner.
✓ Payment made to SASSA beneficiaries: The Department of Social Development provided their
application requirement which stated that there is no rule that prohibit SASSA beneficiaries to apply for
UIF COVID19TERS benefit, however the system was enhanced on this matter.48
SUMMARY OF UIF COVID19TERS AUDIT
OBSERVATIONS
The UIF conducted the root cause analysis exercise on all audit observations received from the Auditor-
General. The Fund then developed an action plan which is a control-driven corrective action. The following
system application controls were enhanced :
✓ Payment made to UIF employees: All UIF employees were immediately blocked from applying for
the COVID19TERS benefit. All id numbers of the UIF employees were used to change the business
rule and block them.
✓ Overpayment and underpayments: The business rule was implemented to created a ceiling amount
of each benefit which cannot be overridden. The control is now effective.
Furthermore, during the first payment run on the 21st of September 2020 after the suspension of payment,
the following errors were detected and the payments were rejected:
➢ Deceased persons: 193 applications rejected;
➢ Government employees: 1 668 applications rejected;,
➢ Inmates: 2 applications rejected; and
➢ Invalid id number: 1 968 applications rejected.
Internal Audit and Risk Management are currently performing the independent review on the
system controls to evaluate the adequacy and effectiveness of controls.49
Thank You…
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