The suspension follows allegations against the UIF of fraud and mismanagement of relief funds.
On 2 September, Labour and Employment Minister Thulas Nxesi placed the Unemployment Insurance Fund’s entire management on suspension, including CFO Fezeka Puzi, due to allegations of fraud and mismanagement of Covid-19 relief funds.
The suspensions were announced in the minister’s briefing, which responded to Auditor-General Kimi Makwetu’s report highlighting a series of potential fraudulent activities in the use of the relief funds by the UIF.
The minister said he had earlier called on the UIF to strengthen its financial controls and invited the auditor general to perform an interim audit to highlight risks and gaps within the institution.
“We have now received the AG’s reports, which point to numerous gaps, risk and inadequate controls and verification processes. This has resulted in illegal payments, amongst others, to recipients of state grants, students receiving National Student Financial Aid Scheme payments, public servants, UIF employees, inmates, deceased persons and miners,” Thulas said, adding that the auditor general had also noted overpayment and underpayment.
He explained that he had suspended the UIF management team and commissioner because the breaches had occurred under their watch. “These moves allow for the Special Investigative Unit to conclude its forensic investigations completely unfettered.”
He also requested the National Treasury to avail their resources to the UIF to urgently implement the auditor general’s recommendations, which included a further probe of the transactions.