Wednesday, 17 November 2021

Cape Town: The Special Investigating Unit (SIU) says the Unemployment Insurance Fund’s appointment of five service providers to flight radio awareness campaigns related to the Temporary Employee/Employer Relief Scheme (TERS)  was an unlawful failure of duty on the part of the fund’s supply chain management.

This was revealed by SIU lead investigator into the TERS fund, Johnny le Roux, during the unit’s Parliamentary briefing of the Standing Committee on Public Accounts.

Le Roux said at least R6.1 million was unlawfully spent on these contracts under the guise that the privately owned radio stations were the sole providers of that service.

“When the investigation commenced we found that the five service providers were appointed without following any SCM [supply chain management] process. The appointments were not in compliance with…the Constitution or the PFMA [Public Finance Management Act].

“The motivation for the use of ‘sole service provider’ amounted to a misrepresentation due to the fact that there were several other commercial radio stations registered with ICASA in the respective provinces,” he said.

Le Roux added that furthermore, state run broadcaster – the SABC – could have flighted the awareness campaigns.

“One SCM official failed in her duties when she allowed the [Unemployment Insurance Fund’s] marketing and communication department to predetermine the names of the service providers. This failure resulted in irregular expenditure.

“The recommendations, approvals and appointments of these services providers were therefore in contravention of Section 51 (a)(iii) of the PFMA,” he said.

At least seven officials have been referred for disciplinary action with five receiving written warnings.

Two hearings are still ongoing.

The Chief Operating Officer and then UIF Commissioner are also undergoing disciplinary hearings.