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SACM probed for 'fraudulent' TERS claims of R6,2 million


The Special Investigation Unit (SIU) is continuing its probe into the privately owned Kutama-Sinthumule Correctional Centre outside Louis Trichardt in the Limpopo Province for “fraudulently” claiming millions from the Covid-19 Temporary Employer/Employee Relief Scheme (TERS). The Department of Correctional Services, however, defended the prison by stating that this probe was based on information from “disgruntled” employees.

The government launched the Unemployment Insurance Fund (UIF) Covid-19 TERS to assist employers and workers negatively affected by the Covid-19 pandemic at the height of the hard lockdown period in April and May last year. TERS was specifically meant for people who had suffered a loss of income during the lockdown period because of, among others, jobs losses or pay cuts. South African Custodial Management’s (SACM) Kutama-Sinthumule Correctional Centre (KSCC) claimed just more than R6,2 million from the fund during this period, funds the SIU says they did not qualify for.

Although the SIU does not investigate private companies or individuals, the national spokesperson for the SIU, Mr Kaizer Kganyago, explained on Monday how the unit became involved with the investigation. “We were asked to investigate the TERS from the Department of Labour, who runs the UIF. When we investigated that, we found that there were officials of [the] government who received TERS money. Remember, TERS money was meant as a temporary relief for people who suffered during Covid, especially during lockdown. We found that there were officials of [the] government who received it and obviously it would not have been right for them to receive it because no government official was paid less during lockdown. Therefore, they did not qualify; any of them,” said Kganyago.

In total, Kganyago told the Zoutpansberger, the SIU found that some 9 293 government officials nationally had benefited from TERS, of whom none qualified for the money. They divided the 9 000 plus cases into provinces, with each province having to investigate its own cases. In Limpopo, 196 government officials were identified, including two doctors who led the SIU to the SACM-owned prison.

The two doctors became of interest to the SIU after they were found to be employed as civil servants by the Department of Health in Limpopo, and they were moonlighting at the prison in their private capacity, for which they were getting paid for by SACM. Their names popped up among the 196 names of government officials in Limpopo who had illegally benefited from the TERS.

Kganyago stated, however, that when questioned, the two doctors said that by the time the TERS money was paid to the KSCC, they were not working there anymore. At this point, what is important to know is that an individual cannot claim TERS money; only a company can claim TERS money on behalf of an individual.

The SIU then approached SACM to explain how they came to claim from TERS, among others on behalf of the two doctors no longer working for them. “We asked them the question: ‘You did not suffer any disadvantage as a prison. Why did you apply for it [TERS]?’” said Kganyago. In response, Kganyago said, the prison replied that they had been under the impression that they could claim from TERS to pay their officials a ‘danger fee’ during the hard lockdown period as officials were forced to look after the prisoners amidst the Covid pandemic.

“They [the prison] did not qualify to claim at all – for nobody,” said Kganyago. He reiterated the fact that nobody at the prison had taken a pay cut or pay reduction during this time. “They were working throughout,” said Kganyago.

Kganyago said that SACM initially said they would pay back the money. “They volunteered to pay back this money, this R6,2 million. Their intention was to pay, so that this thing can go away. We said ‘No, you pay it, but it is still fraud, what you did’. Now it looks like they do not want to pay it anymore,” said Kganyago.

Of the R6,2 million paid to SACM, Kganyago said, only about R2 million was paid over to staff members. The newspaper then wanted to know if private individuals were suspected to have benefited from the remaining R4 million? “We don’t know. The fact is, R6,2 million was paid from TERS to the SACM. The company took some two point something million rand to pay the ‘danger fee’ and kept the rest,” said Kganyago.

Although the KSCC is privately owned and managed by SACM, they operate under the auspices of the Department of Correctional Service (DCS). The Zoutpansberger therefore asked the DCS to comment on the investigation as their contract with SACM prohibits SACM from speaking to the media.

In response, Mr Singabakho Nxumalo, the national spokesperson for the DCS, said that the SIU’s probe was based on information provided by “dismissed and disgruntled employees who were paid the Covid-19 allowance before they were dismissed in April and May 2020 by the contractor, South African Custodial Management (SACM) at the Kutama-Sinthumule Correctional Centre”.

“The dismissed duo were paid Covid-19 allowances in April and May 2020 financial year as there was a circular issued ordering that staff members working at correctional centres be paid an additional Special Danger Allowance on top of the allowances which they normally receive,” said Nxumalo. 

Nxumalo stated that the SACM at Kutama-Sinthumule Correctional Centre was then informed that they did not qualify to submit the UIF claim because the company had not closed for a period of two weeks. “The contractor is in the process of paying back the money to the UIF. There was an overpayment of about R4,3 million which was paid with that particular claim. SACM then notified the fund [UIF] on two occasions about the overpayment and requested UIF to provide banking details where the money should be paid. Unfortunately, there was no response to the emails sent to the UIF,” said Nxumalo. He concluded by stating that all this information had been provided to the SIU, together with supporting documents.




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Date:02 October 2021 - By: Andries van Zyl

Andries van Zyl

Andries joined the Zoutpansberger and Limpopo Mirror in April 1993 as a darkroom assistant. Within a couple of months he moved over to the production side of the newspaper and eventually doubled as a reporter. In 1995 he left the newspaper group and travelled overseas for a couple of months. In 1996, Andries rejoined the Zoutpansberger as a reporter. In August 2002, he was appointed as News Editor of the Zoutpansberger, a position he holds until today.



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