Productivity SA CFO suspended amidst allegations of irregularities

The government entity tasked with employment growth and productivity improvement, Productivity SA, has suspended its Chief Financial Officer (CFO). The suspension follows alleged irregularities pertaining to the management of funds provided by the Unemployment Insurance Fund (UIF) for employment growth.

Since 2010, the UIF has provided Productivity SA with funding to the tune of R188 171 000.00. In terms of the agreement between the UIF and Productivity SA, the monies are availed on the proviso that the funds will be utilized to support companies in economic distress (financial and operational).

The support offered to companies by Productivity SA is multi-pronged and includes implementation of productivity improvement programmes within the companies. The ultimate aim of the support is to turn around the companies, thereby ensuring sustainability within South African enterprises.

However, it has emerged that a figure of about R36 million (pending investigation) has since 2011 been allegedly utilised for activities that are not related to job saving as per the contract between UIF and Productivity SA. This has allegedly resulted in the failure to meet targets and to date 372 companies were assisted as opposed to the target of 550.

In discovering the alleged irregularities, the Productivity SA CEO, Mothunye Mothiba, with the full support of the Board suspended Productivity SA‘s Chief Financial Officer (CFO) pending further investigation. The suspension of the CFO follows the earlier dismissal of a senior Productivity SA employee who, following an investigation initiated by the Board was found guilty of fraud.

The Chairman of the Productivity SA Board, Mthunzi Mdwaba, says “the Board has commissioned an investigation to ascertain the extent of the alleged irregularities and to ensure accountability. Productivity SA Chief Executive Officer (CEO), Mothunye Mothiba says “the entity is committed to serving the nation in mitigating issues of unemployment and saving jobs whilst investigations are underway”.

Productivity SA is an entity of the Labour Department and it is established in terms of Section 31 of the Employment Services Act, No. 4 of 2014 as a juristic person, with the mandate to promote employment growth and productivity.  Productivity SA receives funding from different sources in realising its mandate and these are:

• The National Treasury via the Department of Labour (DoL) for working capital
• Unemployment Insurance Fund(UIF) for programmes aimed at saving jobs ( Turnaround Solutions)
• The Department of Trade and Industry (the dti) productivity improvement within South African enterprises (Workplace Challenge Programme)