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Companies that received Ters money facing audits, legal action for non-compliance 

The Covid-19 applications were available for the period March 2020 to 31 March 2021.
Image: Shutterstock

Companies who have received money through the Covid Temporary Employer-Employee Relief Scheme (Ters) may be selected for audit.

The Covid-19 Ters relief was part of the South African Government relief scheme, which made available approximately R65 billion for payments to millions of workers.

The Department of Labour (DoL) has appointed forensic auditors to verify companies’ Ters claims.

Companies who have received money, may be selected for audit. The auditors will perform investigations and examine the authenticity of the Ters claims, analyse the financial records of employers as well as verify whether the money received was accurately paid over to the qualifying employees.

Audits commenced in December 2020 and are expected to be completed within a six-month period.

Many companies have already been audited or are currently being audited.

In terms of DoL communications, companies who applied for, and are recipients of the Temporary Employer-Employee Relief (Covid-19 Ters), must have the required information available should the auditors initiate the audits.

The Covid-19 applications were available for the period March 2020 to March 31, 2021.

Implications of the Ters audits 

If you are selected for audit, we urge employers to cooperate with the appointed forensic auditors and supply all required information within the stipulated time frames.

Non-compliance may result in legal action.

In the event that it is established through the audits that the companies have illegally benefited from the Ters payments, a legal procedure will be initiated and employers will be obliged to respond.

In the event that there is a reporting error, there may be penalties of the total amount plus interest and any legal costs imposed by the DoL.

The limitation of liability clause in the Ters MoA, states that the liability is uncapped in respect of the damages that the UIF will suffer as per the agreement. Since this is not clearly quantified, the employer/ company may need to review their specific signed MoA to determine what it stipulated.

Information that may be required for the audit

It is important to note that the onus is upon the employer/company to furnish the auditors with all of the required information to complete the verification process

Failure to comply with the request for information by the due date may result in adverse consequences with the UIF and other authorities.

Employers/companies who applied for, and are recipients of the relief scheme, must prepare a UIF Covid-19 Ters information application pack.

We suggest businesses conduct an analysis and review of their Ters submission/s to understand the process followed in order to ensure compliance.

Whether your business applied for the Ters in-house or utilised the services of independent consultants, we suggest professional assistance in identifying any compliance issues and risk areas is obtained.

Ruth Maforimbo, EY EMEIA senior manager for people advisory services.

COMMENTS   3

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And what does Thulas the labour minister plan for companies with employees who rightfully claimed, but never even got an acknowledgement from the UIF and are STILL waiting?
Some of those medium sized business depended on trade and flights to operate, employed hundreds of workers but were the FIRST to have their entire salesbook cancelled! They no longer exist and employees who contributed to UIF are walking the streets with children in some cases without money to get to school. (SAA doesn’t do school transport and CT trains don’t reach all areas.)
So what does Thulas plan for these companies? Also an audit?

The way I understood the benefit, it was never supposed to work out that company puts staff on say half pay and the benefit makes up the “lost” half. I may be wrong?

The benefit from UIF calculation gross is supposed to be reduced by the amount paid by company, to arrive at a net number. It is not supposed to work out that Johnny still received R15kpm by way of R9000 company and R6000 TERS. More actually, because UIF benefits tax-free?

This at SAICA says same https://www.saica.co.za/Portals/0/documents/Media%20release%20on%20COVID-19%20TERS%20misunderstanding%2025%20April%202020.pdf

A forensic team can spot which companies messed up or should be looked at quite easily remotely. They can do a 100% review in a day. SARS has company payroll data for the whole period, including headcounts. Fairly simple to run a high level spreadsheet to figure whether the TERS and Payroll totals make sense. Some will seem reasonable in 5 minutes. Others, not so much…

SARS needs to start with those that stole Ters money first, then the the ANC cadres who have been stealing money for years first.

Start legal action against these ones first.

End of comments.

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