The Democratic Alliance (DA) on Sunday demanded answers over the apparent inaction of Labour Minister Mildred Oliphant following a forensic audit report detailing alleged corruption by two former Nedlac executives.

One of the implicated men, former National Economic Development and Labour Council (Nedlac) executive director Herbert Mkhize, was now a special advisor to the minister, DA MP Ian Ollis said in a statement.

"A department of labour-initiated external forensic report found that he and then chief financial officer of Nedlac, Umesh Dulabh, fraudulently and illegally enriched themselves to the value of almost R2-million using Nedlac funds."

Labour ministry spokesperson Sithembele Tshwete said he would comment on the allegations later on Sunday.

According to Ollis, who obtained the report through Nedlac's acting leadership last week following a Promotion of Access to Information Act application, Oliphant has had the forensic audit report for two years.

"The forensic report into the alleged corrupt activities at Nedlac found that Mkhize and Dulabh used their Nedlac Diners cards to fraudulently spend over R1-million of public funds on a host of personal items between 2011 and 2012."

Expenditure detailed in the report included R431 000 spent on luxury car rentals for local travel around Johannesburg; R261 000 on car rentals outside office hours and R186 000 on unauthorised petrol expenses.

Ollis said: "Much of the expenditure is undoubtedly of a personal nature, including unauthorised trips for the director's wife, nappies, female cosmetics, car tyres for private vehicles, sporting equipment, electronic devices, home appliances, general groceries and alcohol".

The report also found that Mkhize unduly benefited from R147 200 in interest-free loans from Nedlac in contravention of the Income Tax Act.

"The forensic report further found Mkhize had his car serviced with the Nedlac Diners card a full month after he had resigned from Nedlac."

Ollis questioned why Oliphant apparently retained Mkhize as a special advisor and why civil and criminal proceedings had not been instituted against Mkhize and Dulabh, as recommended in the report.

"The minister's inaction smacks of a cover-up to protect a deployed cadre found to have his fingers in the till."

Ollis said Oliphant should immediately suspend Mkhize and see to it that the pair be forced to repay the unauthorised spending.

The South African Revenue Service should conduct a probe and claim back unpaid tax and benefits.

Ollis also wanted Oliphant to explain the matter before the labour portfolio committee.

"The DA welcomes the fact that the Nedlac board, under new management, has put in place measures to ensure an incident such as this does not occur again," he said.