S.Africa's $30 bln COVID-19 relief package exposed to fraud – auditor general

JOHANNESBURG, Sept 2- South Africa’s auditor general said on Wednesday that some of the money in its 500 billion rand COVID-19 relief package may have been fraudulently paid to improper beneficiaries. In a televised briefing, Auditor-General Kimi Makwetu said an analysis of around 145 billion rand of expenditure meant for relief programs like unemployment…

JOHANNESBURG, Sept 2 (Reuters) – South Africa’s auditor

general said on Wednesday that some of the money in its 500

billion rand ($30 billion) COVID-19 relief package may have been

fraudulently paid to improper beneficiaries.

Reports of suspect deals between government officials andbusinesses providing medical equipment or food aid parcels tothe poor, as well as mismanagement of the disaster fund, havesparked public outrage.

In August, the Special Investigating Unit (SIU) toldlawmakers it was combing government departments for possiblecorruption over irregularities in coronavirus-related tendersworth 5 billion rand.

In a televised briefing, Auditor-General Kimi Makwetu saidan analysis of around 145 billion rand of expenditure meant forrelief programs like unemployment and poverty grants “identifiedindicators of a higher risk of fraud and abuse of funds.

“Audit work to date found an increased risk of payments toineligible beneficiaries, overpayments, underpayments, theinvalid rejection of beneficiaries, fraud and double-dipping,”Makwetu said, referring to welfare and unemployment grants.

Makwetu’s report said payments to 30,000 beneficiaries ofthe 350-rand unemployment grant required further investigation.

National newspaper BusinessDay, citing confidential sources,reported on Wednesday the commissioner of the UnemploymentInsurance Fund, responsible for paying out unemployment claims,had been suspended as a result of Makwetu’s report.

Reuters was unable to immediately reach the labour ministryfor comment and confirmation. The labour minister was due toaddress the media at 1200 GMT.

South Africa’s unemployment rate, at over 30% of theworkforce, is among the highest in the world and has beenrepeatedly cited by ratings agencies as a potential source ofsocial and economic instability.

Regarding government departments’ purchases of personalprotective equipment against the COVID-19 outbreak, Makwetu’sreport found that “items were priced at more than double, oreven five times, the prescribed price”.

The government has been buffeted in recent weeks by reportsof graft during the coronavirus crisis, putting President CyrilRamaphosa under pressure as he has pledged to clean up hisAfrican National Congress party’s reputation after a decade ofscandals under his predecessor, Jacob Zuma.($1 = 16.7102 rand)(Reporting by Mfuneko ToyanaEditing by Mark Heinrich)

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