Last Friday, 27 November 2020, the UIF officially announced a forensic audit into TERS claims. The purpose of the audit is to verify the authenticity of TERS claims and to ensure that employees received the TERS benefits which were applied for by employers during the lockdown. The forensic audit is due to commence in the first week of December 2020.
For purposes of the audit, employers are required to have the following documentation readily available, either manually or electronically:
- UIF COVID-19 TERS application pack;
- Bank statements relating to COVID-19 TERS application;
- Each employee file; and
- Payroll report from 1 January 2020 to July 2020.
The purpose of the forensic audit is also to assist the Fund to recover outstanding UIF contributions, including penalties and interest owed to the Fund. The forensic audit was announced pursuant to multiple claims of alleged TERS-related fraud or companies misusing TERS benefits intended for employees. Companies who have illegally received funds from the TERS scheme will be held to account through the necessary legal processes.
There have already been reported prosecutions. Also, there have already been compliance notices issued against some employers under the labour laws.
In addition, employers and employees are to note that as matters currently stand the extension of the TERS scheme has been withdrawn with effect from 15 October 2020 (this is despite the extended declaration of the national disaster). Employers and employees will not be permitted to make application for TERS benefits for any period beyond 15 October 2020. Employers and employees have until 31 December 2020 to claim TERS benefits for the period of 16 September 2020 to 15 October 2020. Should there be any changes in this regard we will update accordingly.
Employers are encouraged to be proactive in their preparation and to co-operate with the forensic auditors in the process.
We have advised clients on the TERS application process since early 2020 and any concerns or queries which arise from the UIF investigation process can be directed to us for further assistance.