Fraud and corruption in emergency grant funding: lessons from South Africa's COVID-19 relief and an agenda for research

Abstract

Emergency relief is particularly exposed to fraud and corruption because funds must be disbursed quickly, often without adequate mechanisms to verify the legitimacy of intended beneficiaries. This review article examines that risk through South Africa's response to the COVID-19 pandemic, whose support package was estimated at R500 billion. Based on a narrative review of academic literature, official sources and documented cases, the article does not report primary empirical data. It first sets out a conceptual framework that brings together deterrence theory, the moral hazard inherent in grant funding, the weak controls typical of under-resourced non-profit organisations and the tension between speed and control in emergencies. It then synthesises the published evidence on the South African case: the special COVID-19 Social Relief of Distress (SRD) grant administered by the South African Social Security Agency (SASSA), salary-related and identity-related fraud, abuses of the Unemployment Insurance Fund's Temporary Employer-Employee Relief Scheme (TERS), and the exclusion of informal workers. Next, it examines the social and economic consequences for beneficiaries described in the literature. The article offers anti-fraud governance recommendations organised around prevention, detection and response, and proposes a research agenda built on a qualitative case study with real interviews of beneficiaries, officials and experts. It concludes that fraud will only be durably reduced if grant providers and implementing organisations jointly build an anti-fraud culture that is visible in day-to-day work.