EPF: Fraud Sparks Scrutiny At EPFO Offices

The Employees’ Provident Fund Organisation (EPFO) will scrutinize all transactions especially recent ones, including those of the previous financial year, at all field offices across the country.

This follows the siphoning off around ₹21 crore by a team of Group B and Group C staff from dormant provident fund (PF) accounts of erstwhile companies.

The decision has been taken following an internal audit at the EPFO office in Mumbai, after the incident came to light earlier in August.

The case is likely to be handed over to the Central Bureau of Investigation, two government officials said.

The retirement fund manager also suspended six employees of a regional office in Mumbai who were found to be prime conspirators behind the fraud.

The scrutiny will take place mainly around covid-19 withdrawals, which allowed employees to withdraw their corpus to deal with the large-scale job and income loss during the ongoing pandemic.

“We are asking field offices to conduct a thorough scrutiny and audit. Mumbai-based EPFO offices have already started the exercise. The effort is to come out clean and control any possible future damage,” said one of the two government officials.

“A small group of employees used the bank accounts of workers to siphon off the funds. The money was from a common fund and not from any particular set of accounts. The amount may be small but it has highlighted the fraud and unethical practice of some (employees),” the official said.

“Some action has already been initiated by EPFO and more will follow. The situation is under control,” Union labour and employment secretary Apurva Chandra said.

The records of the suspended employees are being scrutinized and authorities are tracking their employment history at different offices as well, said another government official who did not wish to be named.

“EPFO as a fund manager has a sizeable corpus (more than ₹15 trillion)… The loss is not to individual accounts but to a collective pool of around four to five companies that had earlier closed down,” the second official said.

The incident happened during the first wave of the pandemic and weeks after the covid-19 withdrawal scheme was announced, the second official said. With the number of demand for withdrawal being huge, “more staff got involved in settling the cases and a few of them have turned bad apples”, the official said.

At least 7.63 million salaried workers dipped into their retirement savings to deal with the covid-19 crisis between 1 April 2020 and 31 May 2021, according to official data.

As on 31 May, EPF subscribers had withdrawn almost ₹18,700 crore.

EPFO allows its subscribers to withdraw basic wages and dearness allowance for three months or up to 75% of the amount standing to the member’s credit in the EPF account, whichever is less.

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