R515 million TERS audit sparks outrage among SA companies over alleged mismanagement by Labour Department
Image: File
Hundreds of companies are up in arms over a 'mismanaged' audit process, worth R515 million, launched by the Department of Labour and Employment (DEL) to probe potential theft of benefits provided to workers across South Africa during Covid-19.
The Temporary Employee Relief Scheme (TERS), administered by the Unemployment Insurance Fund (UIF), was implemented to assist employers to pay employees who were employed but not working because of the lockdown.
The TERS program, administered by UIF, paid out R57 billion to 13.4 million workers through 1.1 million companies during the pandemic, according to minutes from a November 2021 Standing Committee on Public Accounts Parliamentary Committee Meeting.
These benefits, research by UNU Wider states, saved at least two million jobs. However, Corruption Watch, summing up various investigations by law enforcement officials, stated in March this year that R351 million was siphoned off during the scheme's two-year run, with only R229 million recovered. Criminal investigations are set to conclude in December.
Among the fraudulent types of activities already uncovered included the use of fake ID documents, ID documents from dead people, claims for people who were temporarily employed, and benefits being claimed for 'former employees, whom the Special Investigating Unit found to have been incarcerated at the time,' said Corruption Watch.
The latest investigation – awarded to 26 private 'audit' companies at a cost of R515 million – aims to reclaim more funds but has sparked fury over chaotic execution, privacy breaches, and procedural failures.
The probe, initiated via tender UIF6/2023 published in February 2024, saw firms appointed in July last year. Seven months later, companies who had facilitated TERS benefits were abruptly ordered to submit 18 pieces of sensitive documentation – including employees' bank statements, and ID numbers – within three days.
'The sheer scale of this bureaucratic nightmare has left businesses scrambling to meet impossible deadlines, with intimidation tactics now seemingly standard practice,' the National Employers' Association of South Africa (NEASA) said in a March statement. It said that the 'unrealistic audit requests [are] followed almost immediately by threats of severe consequences for those who hesitate to comply'.
Within a week of the audit's launch, NEASA received over 350 complaints from employers.
Sanja Botha, Policy Advisor at NEASA, told IOL that, since auditors sent the requests for information 'we've seen a continuous influx of complaints and queries via email and telephone. The number of businesses being subjected to these audits is staggering and could be in the thousands.'
She added: 'The volume of complaints received from employers reflects serious mismanagement and procedural inconsistency on the part of the appointed auditing firms.'
Botha stated that 'some audit firms have demanded extensive and sensitive documentation, such as employees' personal bank statements, within unreasonably short timeframes, sometimes as little as 24 hours. This approach is not only impractical but adds insult to injury.'
What is more worrying is that there is no mechanism in place to safeguard the employees' private information. While the auditors signed a one-page confidentiality declaration under the Protection of Personal Information Act, the lack of 'clarity or security protocol for how this data is to be transferred or protected' is 'deeply concerning', said Botha.
Moreover, said Botha, 'many businesses are unsure whether the audits are even legitimate, as no formal verification mechanism exists to confirm the credentials of these auditors'.
Among the issues NEASA has identified include that audit letters are sent for entirely different companies, some, who never even applied for TERS, are being audited, while auditors also arrive on-site without prior notice or any proof of appointment. In multiple cases.
'Employer-appointed independent auditors have found significant errors in the UIF's audit assessments, raising serious questions about the credibility and integrity of the entire process,' said Botha.
NEASA has repeatedly raised concerns with the DEL and UIF since March, but 'we have received no responses from either the Minister of Employment and Labour or the UIF,' Botha said.
IOL sought comment from both entities on April 7. The UIF initially acknowledged receipt, stating the DEL would respond due to 'centralised communications.' Despite several follow-ups, neither provided answers as the time of writing.
IOL
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
IOL News
2 days ago
- IOL News
Aquarius Energy acquires 37% stake in Saldanha Bay crude oil terminal
The logo of Glencore is seen in front of the international commodity trading and mining company's headquarters in the Swiss town of Glencore-Tristar joint venture Aquarius Energy has acquired a 37% stake in the 10 million barrel capacity Saldanha Bay crude oil storage and blending site, Image: Suplied The Glencore-Tristar joint venture Aquarius Energy completed a purchase of a 37% stake in the 10 million barrel Saldanha Bay crude oil storage and blending site, Quantum Commodity Intelligence reported online on Friday. Aquarius bought the stake from Oiltanking, a company which, an online search showed is owned by the privately held energy and chemicals company Marquard & Bahls AG, which operates petroleum product terminals in 23 countries, and the terminal has been renamed to Aquarius MOGS Saldanha (AQMS). Saldanha Bay is strategically located between the Atlantic Basin and the Indian Ocean, which is a major shipping route for crude oil cargoes, particularly during the Covid-19 pandemic when a global oversupply of oil appeared almost overnight. Quantum Commodity Intelligence reported that the utility could again benefit from a slowing global economy and gradually increasing crude supply coming to the market, which may lead to an oversupply of barrels. In 2025, 20 tankers have called at Saldanha to unload a combined 20.4 million barrels of crude from locations as varied as the US, Nigeria, Angola, and Brazil, according to Kpler data. Aquarius also owns oil storage and blending sites in Mozambique, Zimbabwe, and Ghana in Africa, as well as Argentina, Mexico, Belgium, and the UAE. Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Next Stay Close ✕ Ad loading Crude oil futures slid at the end of the week due to expectations of a significant increase in Opec+ output, exacerbating a sell-off after prices touched six-week highs during Thursday's trading session. Brent futures settled at $69.67 per barrel on Friday versus $71.70 per barrel on Thursday. Last week, Reuters reported that the Opec alliance could add as much as 548 000 barrels per day of extra production when it met over the weekend. Visit:
IOL News
2 days ago
- IOL News
Words on wealth: why are interest rates still high when inflation is so low?
Explore the complex dynamics between interest rates and inflation in South Africa, as we analyse the South African Reserve Bank's strategies and their impact on the economy. Image: Bloomberg Inflation is something we can't avoid – it's a bit like death and taxes. Traditionally, South Africa has had high inflation in comparison with developed countries, and that's a fundamental reason why the rand has steadily declined against the currencies of those countries. The Covid-19 pandemic upended that trend, and who knows what the effects of US tariffs will be. Whether we return to what now seems was a much safer, more stable world before Covid remains to be seen. As of June, our year-on-year Consumer Price Index inflation rate was 3.0%. Over the years, the SA Reserve Bank (SARB), through controlling interest rates, has done an admirable job of keeping inflation within its target range of 3-6%, for the most part. In comparison with other African countries, our inflation is low. Zimbabwe is an obvious example of a collapsing economy with runaway inflation, but even in countries with stable, growing economies, inflation is a problem. Nigeria has inflation of over 22%, according to Trading Economics; Egypt's rate is about 15%; and Rwanda's is over 8%. Kenya and Namibia are in a similar band to us – their current rates are 3.8% and 3.7% respectively. Looking further abroad, Brazil's rate is 5.4% and Turkey's is a terrifying 35.1%. Recently, the SARB has said it wants to bring the inflation target down so that 3% becomes the middle of the target band. Ironically, to do this, it would need to keep interest rates high, and I would suggest that they are too high as it is. Inflation rate vs interest rate In the following exercise, I compare the CPI inflation rate with the prevailing interest rate (the bank repurchase, or repo rate, as determined by the SA Reserve Bank). A fair comparison of the two rates involves percentages of percentages, which sounds complicated, but bear with me. Before Covid, inflation was averaging 4.5%, smack in the middle of the SARB's target range of 3-6%, and the repo rate was averaging 6.75%. Therefore, the repo rate was 50% higher than the inflation rate. Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Next Stay Close ✕ Ad Loading When Covid hit, the economy froze and inflation plummeted, reaching a low of 2.1% in May 2020. By then, the SARB had already started slashing the repo rate – it plunged from 6.25% in February 2020 to 3.5% at the end of July, remaining at that record low for over a year. For most of that time, between July 2020 and March 2021, inflation hovered around 3.1%. The difference between the two rates was minor: the repo rate was just 13% higher than the inflation rate. By the end of the pandemic, inflation had soared, reaching a high of 7.8% in July 2022. Over the following two years, it steadily declined to 2.8% in October 2024, and it has averaged about 2.9% since then. When inflation was at 7.8% in July 2022, the repo rate was 5.5% – in other words, the repo rate was about 30% lower than the inflation rate, in a rare reversal. But by then, the SARB was rapidly hiking the repo rate to catch up with the high inflation, so that by July 2023, the repo rate reached a high of 8.25%. It remained there for a year, until July 2024, by which time inflation had dropped to 4.6%. The rates had righted themselves: the repo rate was now 80% higher than the inflation rate. Fast forward to June this year. The repo rate at 7.25% is 142% higher than the inflation rate at 3.0%. That's an enormous difference, considering it was only 50% higher before Covid. Even with a drop to 7%, it will still be 133% higher than the CPI inflation. This means that even in a bank savings account with a relatively modest 6% interest rate, you're getting a substantial after-inflation return of 3%. But while the high repo rate is great for savers, it's terrible for borrowers – think of mortgage bond holders whose interest rates are high, but where inflation is not substantially increasing the value of their properties. Juggling act Things are not as simple as I have perhaps conveyed. The SARB's rate decisions are forward-looking, and with the current uncertainty around tariffs, it has been justifiably cautious – inflation could rear its head again at any moment. On the other hand, keeping rates high unnecessarily is bad for economic growth. It's a delicate juggling act, as beleaguered US Federal Reserve Chairman Jerome Powell knows all too well. Commenting on the SARB's low-inflation stance, FNB economists Mamello Matikinca-Ngwenya, Siphamandla Mkhwanazi, Thanda Sithole, and Koketso Mano say they think the shift will happen soon, with the SARB trying to take advantage of the currently benign inflation environment. But they say such a process takes time, and factors such as weather patterns, cyclical food inflation, and the need for traction on structural reforms may derail it. 'We still anticipate inflationary pressures that will make it difficult to sustain the current rate of inflation and believe that the SARB will have to work towards a 3% target as a medium-term objective,' the FNB economists say. Foord chief investment officer Nick Balkin says SARB's thesis is that a lower inflation rate will shrink Treasury's debt‑service bill and release scarce funds for social priorities. But although the SARB has generally delivered on its mandate to keep prices stable within its target range, he says real economic growth has barely averaged one per cent a year since 2014. 'Stabilising prices has not unlocked capital expenditure or boosted economic growth. If anything, it was the weaker growth that helped keep inflation in check,' Balkin says. 'Without meaningful, structural state interventions to address the root causes of constrained economic growth, the debt burden may even worsen.' * Hesse is the former editor of Personal Finance. PERSONAL FINANCE
The Citizen
2 days ago
- The Citizen
Employed South Africans working hard for financial freedom
South Africans are known for their resilience which is confirmed by a survey that shows they still work hard for their financial freedom. Employed South Africans are working hard for their financial freedom according to a new survey that shows their resilience and renewed sense of optimism despite the persistent pressures of a challenging economic climate. According to the 2025 Old Mutual Savings & Investment Monitor (OMSIM), many consumers are not only hopeful about the future but are also taking deliberate steps to improve their financial wellbeing. The OMSIM is an annual study that tracks the financial attitudes, behaviours and priorities of working South Africans earning a minimum of R8 000 per month. It serves as a barometer for the country's financial health, capturing the lived experiences and evolving behaviours of the middle-income market. The 2025 findings tell a story of adaptation, resourcefulness and a steady shift from crisis management to more forward-looking financial behaviour. ALSO READ: South Africans experiencing less financial stress, but still under pressure — survey Finances still difficult for working South Africans despite progress Vuyokazi Mabude, head of knowledge and insights at Old Mutual, says this year's report is a reflection of a turning point. 'The results show that while life is still difficult for many people, working South Africans are making tangible progress. 'There is a notable increase in income, confidence and an entrepreneurial spirit, particularly among the youth. People are taking control of their finances, seeking out additional income sources, managing their debt more intentionally and placing greater importance on saving,' she says. One of the standout findings is the marked improvement in financial sentiment, Mabude points out. A remarkable 75% of respondents believe their personal financial situation will improve in the next six months, the highest recorded since the Covid-19 pandemic in 2020. 'This level of optimism is most pronounced among the Gen Z market, with 89% anticipating improvement in their finances. Confidence in South Africa's economic direction is also improving, although consumers are still cautious. 'The number of people who expressed confidence in the economy has grown to 42%, building on the slow but consistent recovery seen since 2023.' ALSO READ: Survey shows how economic distress erodes South Africans' savings culture Income of working South Africans improving as well She says alongside improving sentiment, income growth is becoming more evident, where 44% of respondents reported earning more than they did a year ago, with income increases especially common among the youth (55%) and those in higher income brackets (57%). It is clear from the survey that South Africans are not simply working one job anymore, with 'poly-jobbing' the new normal now. The report shows that side hustling and entrepreneurship have become deeply embedded in the financial lives of working South Africans. The number of 'poly-jobbers', who earn income from multiple sources, remains high at 57%, rising to 75% among the youth between the ages of 18 and 29. In fact, Mabude says, the report shows that almost half of working South Africans (48%) now own or part-own a business. 'This entrepreneurial spirit is not just a trend. It is proving to be a vital coping mechanism and a source of financial empowerment. People are using their skills and passions to diversify their income streams, often out of necessity, but increasingly also as a means to build wealth.' ALSO READ: Tips on how to build your savings and become financially resilient Working South Africans struggle with debt and gambling However, with all the good news there is bound to be bad news. South Africans are struggling with debt and gambling. Debt continues to feature prominently in household financial management, but it is encouraging that 57% of respondents say they reduced their debt compared to a year ago. A growing number (32%) proactively engaged with creditors to renegotiate repayment terms. However, there are areas of concern, Mabude says, pointing out that 52% of working South Africans reported that they gamble, with 40% admitting they do so in hope of covering expenses or repaying debt. 'This trend suggests that while some are making proactive choices, others remain vulnerable and are turning to risky behaviour to bridge financial gaps.' The report also shows some lag when it comes to long-term savings. Although South Africans continue to show strong short-term saving habits with an average of 22% of household income being allocated to savings, retirement planning remains on the downside. While 96% agree that saving for retirement is important, only 28% made it a top priority. 'It is also encouraging to note that fewer people are prematurely accessing investments or retirement funds, while informal savings vehicles, such as stokvels remain popular and trusted,' Mabude says. ALSO READ: Only 8% of women are confident about retirement – are you one of them? Optimism for the future She says the report tells a story of progress, empowerment and possibility. 'While challenges remain, mainly due to the cost of living, OMSIM 2025 shows a trajectory of optimism looking into the future. 'The report shows that South Africans are not passively waiting for change, but instead are actively creating it by embracing entrepreneurship, making smarter money decisions and seeking out alternative ways to achieve some level of financial freedom. 'Every year, OMSIM gives us deep insight into how people are coping and adapting when it comes to their finances. This year, more than ever, we see an encouraging collective step forward,' Mabude says.
