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The Unemployment Insurance fund (UIF) and the Compensation Fund, which both fall under the department of employment and labour, allegedly failed to table their 2021/22 annual reports, according to the SA Commercial Catering and Allied Workers Union (Saccawu) on Tuesday morning.
This comes amid a controversial investment of R5 billion by the UIF to Thuja Capital Fund Project, which was suspended by Labour Minister Thulas Nxesi on Friday.
According to department, the project falls under the labour activation programme unit, which was established to increase UIF's participation in poverty alleviation schemes by:
- Partnering with government institutions in the implementation of job creation initiatives;
- Funding turn-around solutions for companies in distress;
- Training unemployed individuals; and
- Part-taking in the training of workers facing retrenchment and layoffs, known as training lay-off schemes
At the time, Nxesi said he had instructed the department's director-general Thobile Lamati and UIF commissioner Teboho Maruping to suspend the project pending a full report following a Sunday Times report that the department and UIF were gambling with workers’ money by investing in a company that existed on paper only and did not have premises, a website or track record.
READ: UIF performed dismally during height of Covid-19 pandemic
The Saccawu leadership said it supported Cosatu’s call for department to scrap the "questionable" investment and that the current parliamentary oversight bodies should pay closer attention to UIF and the Compensation Fund, which fall under Nxesi’s department. The union commended Nxesi for “moving with haste” to suspend the investment.
However, Saccawu said it was concerned that both entities had not tabled their annual reports for the 2021/2022.
The union said:
The union called on the standing committee on public accounts (Scopa) and the portfolio committee of employment and labour to exercise their oversight without fear or favour.
“As the labour movement, and Cosatu in particular, we will be watching with hawk eyes the tabling of these two outstanding reports to Scopa on March 31 2023.”
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In November last year, Scopa confirmed in a statement that the two entities did not submit their annual reports, which meant that they were non-compliant with the Public Finance Management Act. The Act states that all annual reports must be submitted to Parliament at the end of September each year.The union said it was also the duty of the two entities' boards to exercise their fiduciary duties and ensure that funds were utilised prudently with minimal or zero wastage.
The union said:
The union said it was concerned by reports that these funds were in distress because of bad governance such as
- Negative reports on UIF investments;
- Delays in implementing the follow-the-money project with respect to the Covid-19 Temporary Employer/Employee Relief Scheme;
- Late submissions of annual financial statements; and
- UIF liquidity, poor customer experience and the UIF’s image.
“The labour movement calls on the boards of these funds and the minister [Nxesi] to take a closer look at the funds' investments strategy and make sure that money is invested in the right instruments that can yield benefits for workers and are able to ameliorate the challenges posed by unemployment and poverty and move sustainable developmental path. This will not happen without rooting any semblance corruption in these institutions,” the union said.
The criminal justice system, the union said, should also recover the stolen money and convict those responsible for stealing and embezzling from these funds.
At the time of writing, UIF spokesperson Makhosonke Buthelezi had not responded to questions sent by City Press.
