Notice from Compensation Fund

Notice from Compensation Fund

Payroll / eTorQue, Tax

The following notice is copied verbatim from an electronic communication received on 31 December 2012 from the Income Directorate of the Compensation Fund.

The year has presented many challenges, both internally and externally, that have prevented us from fulfilling our legislative mandate optimally. Fraudulent activities are still negatively affecting the finalisations of the assessments. We have noted with great concern that the issuing of Letters of Good Standing has spiralled out of control to the extent that these are issued fraudulently and, in most cases, not in accordance with the Compensation Fund Policy.

In the last few weeks of December 2012, a number of cases have been identified and reported where Letters of Good Standing are issued to companies that:

  • Have closed businesses.
  • Have outstanding debt with the Fund.
  • Have not submitted annual returns.
  • Have not been assessed.
  • Reproduced and altered letters of Good Standing.

The internal audit findings also paint a very disturbing picture. Letters of Good Standing are issued to businesses whose status cannot be viewed on the system. I have no doubt in my mind that this letter has been issued to businesses that are not registered with the Fund. While we acknowledge the backlogs we are still resolving, that have played a major contributing factor to issuing these letters to non-complying businesses; it has become necessary to review the conditions under which the Letter of Good Standing will be issued.

This has resulted in us suspending the issuing of Letter of Good Standing until 4 January 2013. Efforts are being made to improve security, internal controls and risk management processes. We regret any inconveniences this may have caused your businesses.

It is also worth noting that this letter is now formally a requirement by National Treasury to be issued to the Building and Construction industry.

It goes without saying that while there are still challenges experienced; we are proud to have reached a very important milestone, in the history of this organisation, by successfully launching the ROE WEBSITE in May 2012. We are grateful for the support and encouragement provided by many of our external stakeholders, in particular the payroll administrators and consultants, who went beyond their call of duty to ensure the success of this initiative. This is indeed a pronounced sign of hope that the Fund is moving in the right direction.