Unit helps SA save R4,5bn

The latest mission of the SIU has been to probe the social grants in the social development department, in which the unit claims to have saved the state R4,5 billion and contributed to the removal of more than 130 000 people from the social grants register. The SIU has become a key component of government’s anticorruption strategy. In its activities in three government departments to date it has uncovered thousands of cases of fraud and recovered or saved billions of rand. Briefing Parliament’s justice portfolio committee, Willie Hofmeyr, who heads SIU, said the unit was also investigating massive medical aid fraud at the correctional services department and drivers licence fraud at the transport department. He said its funding had rocketed from R500 000 in 2001 to R100 million next year. In the first six months after it entered into a contract with the social development department last April, the SIU had identified 43 000 people who were drawing both social grants and salaries from the public service. The unit achieved this by running the social pensions database against the public service salaries database. So far this has resulted in the removal of 14 262 civil servants from the grants register. Hofmeyr said the aggression with which the SIU was going after those drawing both salaries and pensions had a knock-on effect, with a further 80 000 people having stopped collecting social grants and 36 000 requesting to be taken off the register. He said the figures were for six months of operation and were expected to double. He said that an actuarial model over 10 years had been used to determine the long-term saving for the state. Removals of civil servants amounted to R50m, noncollections R167,4m and requests for removal R115,3m or a total of R333m. The projected savings for the full year was R600m and the value of future savings a massive R4,5bn. While the SIU operates on the basis of civil law to recover state funds, the social-grant investigation has already resulted in 571 prosecutions being launched, with 333 convictions secured so far. Hofmeyr said the early successes of the investigation was due to the collaborative effort of the social development department, the SIU, South African Police Service and the Scorpions unit. He said thousands more prosecutions were in the pipeline. Hofmeyr said another highlight for the SIU was the continuing investigation of invalid driving licences and the illegal conversion of licences into the new credit-card format. He said the scam involved buying a fraudulent foreign licence from foreign countries such as Mozambique and then having it converted to a local credit-card licence. Many of those converting in this way had never even left South Africa. About 31 officials had been arrested for selling licences to the public and 350 people for converting the licences. Hofmeyr said more than 1 000 further arrests were expected this year from the 1 300 investigations in progress. He said the investigation into medical aid fraud had delivered R3,4bn in savings so far. Hofmeyr said the chances were that at least half of the 10-million people on the social-grant register would have to be studied. By the end of the unit’s three-year contract with the social development department savings were expected to run into billions of rand. The previous head of the SIU, Judge Willem Heath, resigned from the unit after a court ruling that for a judge to run the investigation unit was an infringement of the principle of the separation of powers. Opposition parties had called for what was then known as the Heath Commission, as the unit was referred to, to be included in the investigation into allegations of corruption in the controversial arms deal.

March 2006
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