Fraud, corruption unit saves tax payers R18mil

Wednesday, March 11, 2009

Johannesburg - Tax payers have been saved over R18 million through work of the anti-fraud and corruption work of the Special Investigating Unit (SIU) which investigated fraudulent housing subsidies.

The unit was commissioned in 2007 under former President Thabo Mbeki and Housing Minister Lindiwe Sisulu, to conduct investigations into low income housing subsidies between May 2007 and March 2009.

Head of the SIU, Willie Hofmeyr said in 1 330 cases, employees had signed Acknowledgement of Debt papers valued at an estimated R18 million. The government officials are then required to pay the subsidies back over a specified period of time.

He they the outcomes of the 3 954 subsidies already investigated had revealed that about 55 percent of government employees who received a subsidy were either not entitled to receive it or were being overpaid.

Some 2 000 beneficiary cases have been finalised, with a total of 724 criminal prosecutions have been instituted against government officials with an 80 percent conviction rate. A further 2 000 cases are still pending.

A total of 1 962 were found to have fraudulently received housing subsidies valued at R26 million, while 224 officials found to be overpaid through the subsidy system amounting to over R2.4 million.

"Fraudulent activity related to misrepresentation of employment status, income, marital status and spousal income status," said Mr Hofmeyr.

He explained that overpayment occurred due to incorrect selection of the subsidy type given the income and details disclosed by the applicant, and errors in the processing of the application.

The unit is a multi-disciplinary team of forensic experts who employ forensic solution in order to unblock service delivery to the public sector, Mr Hofmeyer said, adding, however, that they did not prosecutory body, but did help in the legal processes.

Housing subsidies also came under suspicion by the Auditor General, who in 2006 requested the Housing Minister to do a detailed audit of the Housing Subsidy System (HSS) in order to identify weaknesses in the housing information management system.

Director General in the department, Itumeleng Kotsoane said the audit found that a number of government officials, municipal officials and private individuals had fraudulently received houses they were not supposed to receive between 1994 and 2004.

The report indicated that duplicating subsidy approvals, approving subsidies to those under 21, duplicating subsidies for a specific property and approving subsidies to individuals with invalid ID numbers were the main weakness in the system.

The ability for government officials to manually override the system in the approval of housing subsidies also resulted in fraudulent activities, Mr Kotsoane explained.