South Africa’s government pays R4 billion a year to people who do not exist

South Africa’s government may be paying out over R3.9 billion a year in fraudulent salary payments to ‘ghost workers’ who are registered on the government’s payroll but do not actually work in any capacity.

These payments are only possible through extensive collusion to get individuals on the government’s payroll. 

To combat the rise in ghost workers, the National Treasury has launched an audit across national and provincial departments to root out the scam. 

Chairperson of the Portfolio Committee on Public Service and Administration Jan de Villiers explained that it takes around three employees to collude for a ghost worker to be put on the state’s payroll. 

Some of the fraudulent recipients used duplicated ID numbers, payments to minors, and multiple allowances claimed by the same individual. 

In other cases, a ghost worker may have been a state employee who passed away, but their details have not been removed from the payroll. As a result, they still receive salary payments into their bank account. 

These have previously been dismissed as “clerical errors”, where the duplication of an ID number or incorrect data input leads to additional payments to the same individual. 

De Villiers explained that there are two clear types of fraudulent payment, with one being the creation of a ghost worker and the other being the overpayment of an existing employee. 

A ghost employee is a fake identity that was created and added to the government’s payroll, with the money flowing into an actual individual’s bank account.

The overpayments to employees typically happen with individuals who are not removed from the payroll when they retire or pass away. De Villiers admitted this may be due to a clerical error. 

“But, when it comes to ghost employees, we are most certain that it is not due to clerical errors,” De Villiers told the SABC.

“The reason I say this is because it takes about three state employees to work together to load any person onto the government’s payroll.” 

“It is not a clerical error when ghost employees are created. It is collusion and criminals working together in a syndicated fashion to create these employees in the system.” 

These ghost workers are estimated to cost the government over R3.9 billion a year in additional payments, with further investigation likely to result in more payments being discovered.

Finding the solution

De Villiers said it is a very difficult task to crack down on these payments due to the size of the government’s payroll and the process of verifying identities. 

Currently, the Department of Public Service and Administration is conducting a physical test to determine whether people working in various departments are biometrically authenticated. 

“We have to establish that the people receiving salaries exist and are real. That requires a physical test across all departments, which is a major undertaking,” De Villiers said. 

Alongside this process, the National Treasury is testing data from the state’s payroll to compare identities of government employees with data from the Department of Home Affairs. 

This should be able to identify duplicate bank accounts, fake identities, overpayments and, ultimately, ghost employees. 

“Finding ghost employees and ghost payments within the system is just the first step. We need to redesign the system to prevent this from happening again,” De Villiers said. 

Another tricky step is to investigate the criminal syndicates that have benefited from the creation of ghost employees and payments. 

“This is corruption. The creation of ghost employees and the various irregular payments is corruption at scale,” De Villiers said. 

“There needs to be investigations and prosecutions that lead to people being put in jail for doing this to prevent others from trying to do it in the future.” 

De Villiers said there are clear paper trails from irregular payments and ghost employees, so the money can be recovered over time. 

“We are still at the stage of identifying the ghost employees and are yet to engage with the relevant law enforcement agencies to ensure prosecutions follow,” he said. 

This is because the process of identification is still being concluded. Only once this stage has been completed will there be a need for prosecutions. 

“The reality is that it seems as though this is a problem across the board in national, provincial, and local departments, as well as state-owned entities,” De Villiers said.