Unemployment Insurance Fund (UIF) Must Be Saved From Financial Mismanagement and Lack of Consequence Management, Says Select Committee Chair

The urgent need to save the Unemployment Insurance Fund (UIF) from financial mismanagement, governance instability and a lack of consequence management has never been clearer than it is today.

This was the message from the Chairperson of the Select Committee on Economic Development and Trade, Ms Sonja Boshoff, following a briefing to the committee by the Auditor-General of South Africa (AG) on Tuesday.

During the briefing, the committee heard that the UIF distributed over R800 million in Temporary Employer/Employee Relief Scheme (TERS) funding, yet over R200 million remained unaccounted for, with the AG unable to verify some of the companies that received these payments.

Ms Boshoff expressed deep concern about the lack of proper controls, monitoring and reporting within the UIF.

“This is deeply unfortunate, considering the critical role this entity plays in supporting unemployed and vulnerable South Africans. These systemic failures have persisted for far too long. Work on improving UIF systems cannot continue indefinitely without results. At some point, this entity must reach stability and fully deliver on the mandate for which it was created,” she said.

She added that these inefficiencies threaten to compromise Parliament’s oversight role, especially when it would appear as if misleading information is being tabled before the committee.

“When conflicting reports are presented to us, it not only undermines the work of Parliament but erodes public trust in the UIF,” Ms Boshoff said.

The committee received a separate presentation from the UIF on its annual performance plan. However, there were significant discrepancies between the UIF’s report and the AG’s findings.

Deputy Minister Jomo Sibiya acknowledged during the meeting that there was “a lot of money at the UIF”, and lamented the absence of modernised ICT systems, while warning of what he described as “a mafia” operating inside the UIF. He emphasised that the UIF remained a noble cause for workers, but stressed the need for urgent reform.

In response, Ms Boshoff urged the UIF to prepare a report aligned with the AG’s findings, highlighting and addressing the discrepancies. “Independent auditors must be appointed to produce accurate and verifiable financial statements on TERS payments,” she said.

“It is regrettable that we must call for external consultants to do work that government officials should be capable of performing themselves. However, the seriousness of these financial irregularities leaves us with no choice.”

Ms Boshoff gave the UIF two weeks to prepare and submit a comprehensive report comparing the AG’s findings with the UIF’s internal assessments. This report must also outline whether the Department of Employment and Labour will implement the Auditor-General’s recommendations.

She further called on the UIF to “play open cards” with the committee and the public: “The UIF must be fully transparent about the extent of these problems. The committee needs accurate information to perform its oversight role and to ensure that workers’ funds are properly safeguarded.”

The committee also demanded clarity on officials implicated in financial misconduct, including details of the actions taken against them to date. “This is not just about systems and processes; it is about accountability. Those who are responsible for the mismanagement of workers’ money must face real consequences,” Ms Boshoff concluded.