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01 Dec 2020
BY Lauren Salt AND Jessie Moore

TERS forensic auditing imminent: employers, be prepared

From the first week of December 2020, employers who received benefits from the COVID-19 Temporary Employer-Employee Relief Scheme ("TERS") can expect a knock on their doors from the Unemployment Insurance Fund’s ("UIF") appointed forensic auditors. According to a statement released last Friday, 27 November 2020, the UIF has appointed seven companies with auditing, accounting and forensic investigation expertise to "follow the money" and examine employers' financial records to check the authenticity of their claims and verify if the money was paid over to the qualifying employees.

"If those companies have a case to answer for illegally receiving those funds, they will be made to account through the legal processes," the statement confirmed.

Although the TERS is nearing the end of its lifespan and in the wake of the withdrawal of the C19 TERS Direction of 7 September 2020 last week, the imminent forensic audits are in response to the plethora of complaints and allegations that some companies were stealing the TERS benefits intended for their workers, and cases of fraud. The UIF is empowered in terms of the memorandum of agreement entered into with all employers and bargaining councils to undertake audits in respect of any money issued in terms of the TERS.

Yesterday, 30 November 2020, UIF Spokesperson, Makhosonke Buthelezi said that fraudulent claimants may have "slipped through the cracks" as the UIF was not connected to other relevant systems at the time of issuing the TERS benefit. He also confirmed that audits will be taking place from today, 1 December 2020 and will take approximately six months.

In addition, Acting UIF Commissioner, Marsha Bronkhorst has urged all companies and employers who have benefited from the TERS to co-operate with the forensic auditors and supply all the required information within the specific time frames. "Failure to comply will lead to legal action," she has confirmed.

Employers who benefited from the TERS must prepare the following information manually or electronically:

  • UIF COVID-19 TERS application pack;
  • bank statements relating to the application;
  • each employee's file; and
  • the payroll report from 1 January 2020 to July 2020.

For more information, please contact:

Lauren Salt

Employment | Executive

lsalt@ENSafrica.com

+27 84 509 6494

Jessie Moore

Employment | Candidate Attorney

jmoore@ENSafrica.com

+27 71 125 6135