Criminal syndicates hitting South Africa’s biggest employer

Criminal syndicates have infiltrated all three spheres of government, including departments, agencies, and state-owned entities.

This has led to widespread problems with so-called “ghost workers” – fictitious names on the government’s payroll who draw salaries and wages at great cost to the fiscus.

The South African government is by far the biggest employer in the country, with approximately 1.3 million individuals on the state’s payroll.

Over the years, small-scale payroll audits have been conducted in various departments resulting in thousands of ghost workers being identified.

The Department of Public Service and Administration (DPSA), in partnership with the National Treasury, is now seeking to conduct a much larger-scale audit of the state payroll.

The Democratic Alliance, the second largest party in the Government of National Unity (GNU), is pushing for the audit to go even further by doing a comprehensive in-person audit of all public servants.

However, presenting to parliament this week, the DPSA warned that this would be a costly and resource-intensive process.

“Verification needs to be done on a continuous basis, as appointments and resignations are taking place on a regular basis,” it said.

“Collusion and corruption in these verification processes can also not be ruled out.”

Jan de Villiers, DA MP and the party’s spokesperson on public service and administration, said that it was evident that corruption was already involved.

Specifically, he said that the DPSA’s presentation to parliament made it very clear that the issue of ghost employees in the public service is not a matter of administrative oversight or mistake.

“It is an intentional medium for systemic corruption,” he said.

How criminal syndicates are involved

The DPSA outlined how inserting a ghost employee into the government salary payment system requires at least three internal officials to be involved.

To enrol a ghost worker in the system, a department or entity would have to enrol the fictional person in the Personnel and Salary System (Persal) used by all state branches.

Administrative records for every person appointed need to be captured on this system, including salary and benefit details.

Once a user has captured a transaction with a financial impact on the system, authorisation and approval by a different user with the relevant role and responsibilities are required.

“This ensures that a single person is unable to transact on the system to appoint and pay a person,” the department said.

Finally, once payments are approved and made, reports are printed out. These must be signed by every individual listed and certified by the responsible managers.

“It would only be possible to appoint and pay a person irregularly on the system if all responsible parties within a department collude to capture and authorise irregular transactions, or when users share their system login credentials with others,” the department said.

De Villiers said that the state’s problem with ghost workers shows that the current three-tier system is vulnerable to manipulation by criminal syndicates embedded within the public service.

“While the term ‘ghost workers’ suggests fictitious names on payrolls, real individuals are receiving and benefiting from these fraudulent salary payments, and real taxpayer money is being siphoned into private pockets through deceit,” he said.

He said the DA would push for the Auditor-General of South Africa to start including the matter in the audits they do of government departments and entities.

The DPSA, meanwhile, said it does not think that adding more controls will yield the desired outcome, and instead suggests a greater focus on building a public sector with a high standard of professional ethics.

It said its professionalisation efforts already focus on this area, including greater consequence management to deter unethical conduct.

However, as this project unfolds, it said it will continue collaborating with the National Treasury to detect and identify ghost workers and those involved.