Minister pushes for probe into fund mess

• Mess due to mismanagement

Employment & labour minister Thulas Nxesi says forensic investigators will be appointed by the end of June to get to the bottom of the rot at the government agency responsible for compensation of injured workers and those who contract diseases while on duty.

Employment & labour minister Thulas Nxesi says forensic investigators will be appointed by the end of June to get to the bottom of the rot at the government agency responsible for compensation of injured workers and those who contract diseases while on duty.

In May, parliament’s finance watchdog, the standing committee on public accounts (Scopa), called on Nxesi to launch a forensic probe into the string of poor audit outcomes, mismanagement and irregular expenditure that have plagued the Compensation Fund for the better part of a decade.

The fund, which has reserves of about R30bn, has been in a mess for years amid growing irregular, fruitless and wasteful expenditure. The crisis has largely been due to mismanagement and lack of capacity, with the auditor-general raising concern about the lack of action against implicated officials.

About 400,000 employers contribute close to R9bn annually to the fund. Yet for several years, the fund has been the target of complaints about tardy payment of claims to beneficiaries and medical practitioners.

Nxesi said he first suggested the forensic investigation to Scopa following concerns raised in previous reports by the auditor-general.

“We need a focused audit, and in my discussions with the auditor-general, they have been able to guide [the department]. I have instructed the DG [director-general of the department] and the commissioner [of the Compensation Fund] to kickstart the process of appointing a service provider.

“You would know that I cannot appoint a service provider; the officials have to do that. But it is a matter that I am monitoring. The intention is to ensure that by the end of June, if all works well, we are done with that,” Nxesi said during a meeting of parliament’s employment & labour portfolio committee on Tuesday.

He said the auditor-general will be consulted on the terms of reference of the forensic probe.

Medical service providers who treat injured and sick workers often find it is difficult to register with the fund and submit claims, sometimes waiting up to two years to be paid out. Over the past decade, the fund has received a string of disclaimers, the worst possible audit finding.

In the fund’s 2019/2020 annual report, commissioner Vuyo Mafata highlighted the poor decision-making in previous years that led to weak internal controls, which affected claims and financial management as well as revenue generation.

However, Mafata told MPs on Tuesday the fund was on the road to recovery and its turnaround strategy was starting to bear fruit.

The strategy is mainly focused on improving financial and IT skills and medical knowhow to ensure that trained medical doctors assess claims.

The fund had also teamed up with the SA Institute of Chartered Accountants to provide a continuous supply of skilled accountants.