Years ago, someone whom we will only refer to as This Guy worked for a Gaborone tenderpreneur who operated what was then a popular gastropub. Down the road and way before Covid-19 hit, This Guy and the tenderpreneur parted ways for good. When Covid hit, the government cobbled together a scheme to provide wage subsidy support for employees whose earnings had been affected. Soon thereafter, This Guy received a call from an acquaintance in the civil service who asked if he went back to working for the tenderpreneur. No, he replied, he long parted ways with him and never went back. The civil servant’s response was to counter that official documents that he had seen showed that This Guy worked for the tenderpreneur and had claimed money from the Wage Subsidy Support Fund that was administered through the Botswana Unified Revenue Services (BURS).
The first, most natural thing This Guy could have done was report the matter to the police. However, he adjudged that that would result in a lengthy court case whose outcome wasn’t certain and one that would consume his time. Resultantly, the first thing he did was call his former employer, tell him that he knew what he did. He asked the scammer to give him the money that he had fraudulently claimed from the government under his name. Payment was swift.
This Guy’s story is one whose variations happened throughout Botswana and at least until last year, was probably among cases that law enforcement authorities and the Auditor General were investigating. However, from what Sunday Standard learns, the investigations have been quietly shelved because the government doesn’t have the resources (in personnel, time and money) to carry out the investigations. A source tells us that the number of cases and extent of the fraud would require more investigators “than the entire Auditor General staff” has and take up much more time than an audit exercise normally takes. There may be hyperbole in that statement but already there has been indication that the number of culprits could be astronomical.
Last year, the Head of Public Relations in the Ministry of Finance and Economic Development, Fenny Letshwiti, revealed that out of the 20 701 Batswana-owned companies that benefitted from the COVID-19 Wage Subsidy Support Fund, “about 870” of them were found to have obtained money from the fund through “fraudulent” means. Sunday Standard now learns that more cases of fraud were and are still being discovered, often as a result of supposed beneficiaries coming forward to disclose how they (and the government) were scammed. On its own, the government has no way of knowing which employers passed on the money to employees and which ones didn’t. The reason for that can be summed up in two words: political expediency.
Some loopholes may still exist but Botswana’s public financial management system is among the most water-tight in Africa. That is the handiwork of President Sir Ketumile Masire who commissioned British consultants to make it almost impossible to steal from public coffers without leaving an incriminating paper trail. In one respect, this was how Botswana became one of the least corrupt African countries – at least according to Transparency International’s Corruption Perception Index.
The public financial management system that is already in place (and the stringent due-diligence processes that attend it) could have been used to disburse the money from the Fund. However, in their haste and desire to curry favour with voters, politicians at the Government Enclave short-circuited the system, asserting authority over the technocrats who run this system.
“BURS was merely instructed to disburse the money,” says a source.
Even in a supposedly digital era, one still has to submit chin-high paperwork to get money from the government. A source says that in the particular case of the wage subsidy, employers would have had to submit documents that proved that the people on whose behalf the money was being claimed were actually their employees. With requisite due diligence having been thrown out of the window, some unscrupulous characters were able to claim the money by submitting names of their relatives, friends, lovers and neighbours.
Where it would have been ideal to develop processes through which the money would be paid directly into the bank accounts of the beneficiaries, it was instead paid into the company’s account. This was how some employers came to withhold the money and not pass it on to the intended beneficiaries. Employers were required to indicate the monthly salaries of their employees – information BURS had no way of verifying. This enabled the unscrupulous characters to inflate salaries and thus trick out even more money from the government.
Money from the Fund was paid out in two phases. During the first, P833 million was paid out from April to June 2020 and the intended beneficiaries were employees of various sectors. During the second, P143 million was paid out from July to December 31, 2020 and the intended beneficiaries were employees of the tourism sector. All told, a total of P976 million was disbursed from the Fund and it is yet unclear what percentage of this money actually went to the intended beneficiaries.
Sunday Standard had sought clarity on these and related issues but three weeks after we sent a set of questions to MFED, we still hadn’t received the response at press time.
Last year, the Ministry had told us that BURS had recovered “an amount above P20 million” from the culprits and that recovery measures were continuing; that most of the culprits had been handed over to the Botswana Police Service for investigation and possible criminal prosecution; and that companies that applied for the subsidy signed an undertaking, which amongst other things, compelled them to pay the claimed subsidy “wholly” to beneficiary employees. On the basis of the latter information, we had asked the Ministry to provide an update on how much more money BURS had recovered, whether any culprits have been or are being prosecuted and how many cases are still pending. We also wanted to know whether the Ministry had been able to calculate how much money had been unlawfully withheld by culprit employers.
The haste with which the scheme was cobbled together also created a legal morass. To that end, we wanted to know the written undertaking that companies signed (to pass on the money to the intended beneficiaries) was adequate enough to close all legal loopholes. Our information is that having deviated from its own established procedures, the government would have a weak case in court.