ANTI-CORRUPTION INITIATIVES BY THE PUBLIC SERVICE COMMISSION 3 November 2010

1. ANTI-CORRUPTION INITIATIVES BY THE PUBLIC SERVICE COMMISSION3 November 2010 Presentation to the Portfolio Committee on Public Service and Administration

2. PRESENTATION OUTLINE • Introduction • Code of Conduct • Managing conflicts of interest • The National Anti-Corruption Hotline (NACH) • National Anti-Corruption Forum (NACF) • Challenges in preventing and combating corruption • Future initiatives

3. INTRODUCTION • Public servants are expected to display professionalism in their conduct, their relationship with the public and in their performance of duties. • As such, a public servant’s bahaviour must be above reproach, characterized by honesty, integrity, courtesy and always in the public interest. • It is only through such bahaviour that integrity and professional ethics can be imbued in the Public Service. • Against this background the PSC has continued to promote transparency, accountability and integrity in the Public Service. • This it has done through various initiatives discussed in this presentation.

4. CODE OF CONDUCT • The PSC has developed a Code of Conduct for the Public Service which has been incorporated as a Chapter in the Public Service Regulations. • The Code of Conduct forms the cornerstone of the Public Service’s integrity framework as it sets standards for ethical conduct. • The Code of Conduct exemplifies the spirit in which public officials should perform their duties, and points out what should be done to avoid conflicts of interest.

5. CODE OF CONDUCT (Cont’d) • During 2006 the PSC conducted a research study on the Efficacy of the Code of Conduct for the Public Servants. • The study found that the Code of Conduct provides the primary driver for its enforceability by making non-compliance with its provisions a disciplinary offence. • However, the study also found that the Code is not as highly regarded as it ought to be. • It is therefore necessary for senior managers to give particular attention to the induction of staff on the Code of Conduct. This will add to the enhancement of a professional ethos amongst public servants. • The PSC recommended amongst others that: • A comprehensive review of the Code that addresses the structure, contents and style be undertaken. • An ethics training programme linked to a revised Code of Conduct be implemented.

6. Managing Conflicts of Interest • The PSC has developed and administers a Financial Disclosure Framework for senior managers in the Public Service. • This framework is aimed at preventing conflicts of interest by requiring of senior managers to disclose their financial interests. • The PSC has conducted research into the establishment of a comprehensive framework to manage conflicts of interest in the Public Service. • This has culminated in a report on the management of conflicts of interest in the Public Service. Through the Report, the PSC proposed the establishment of a Conflicts of Interest System which will promote the perception of integrity in government by preventing conflicts of interest before they occur. • The PSC’s recommendations have been taken on board by the DPSA which recently submitted a conflicts of interest policy framework to Cabinet.

7. OVERALL SUBMISSION OF THE DISCLOSURE FORMS BY NATIONAL AND PROVINCIAL DEPARTMENTS OVER THE PAST THREE FINANCIAL YEARS • Compliance rate by the due date for the – • 2007/08 financial year was 48%; • 2008/09 financial year was 49%; and • 2009/2010 financial year was 46% • The submission rate by the due date for the past three financial years has never been more than 50%. • The submission of the disclosure forms for the last three years (included after the due date) are as follows: • 2007/08 – 85% • 2008/09 – 81% • 2009/10 – 83% • The breakdown of the submission of the disclosure forms as at 22 October 2010 is reflected in the following Table: 7

8. NUMBER OF FINANCIAL DISCLOSURE FORMS RECEIVED FOR THE FINANCIAL YEAR: 2009-2010

9. HOW CAN DISCLOSURES BE STRENGTHENED? • According to the regulations SMS members who do not comply should be charged with misconduct. This maybe applicable to SMS members who become complacent with respect to submission of their disclosure forms. • Oversight bodies such as Parliament and provincial legislatures should hold Executive Authorities to account where there has been non-compliance as well as low levels of compliance.

10. HOW CAN DISCLOSURES BE STRENGTHENED? (Cont’d) • Currently departments submit the disclosure forms to the PSC without verifying the information contained therein. • The PSC is, therefore, of the view that Heads of Department should play a more active role in the management of the financial disclosures and the identification of potential conflicts of interest.

11. THE NATIONAL ANTI-CORRUPTION HOTLINE (NACH) • It is important and necessary for the public to be able to report corruption confidentially and safely. • Accordingly, citizens do not only want to be consulted, they also need a facility to report wrongdoing. • A National Anti-Corruption Hotline (0800 701 701) for reporting corruption in the Public Service has been set up and is managed by the PSC since 2004. • Whistle blowers can call the Hotline to report corruption without fear of victimization as the Hotline offers anonymity. • Such a mechanism empowers the majority to speak out in respect of unethical practices, and contribute in the fight against corruption.

12. NACH (Cont’d) • Since the inception of the NACH in September 2004 and as at 1 October 2010 a total of 7922 cases of alleged corruption were reported to NACH. One-thousand-four-hundred-and-thirty (1430) cases of alleged corruption were reported to the NACH for the 2009/10 financial. • Successes of the Hotline include: • Thirty (30) officials have been arrested since the inception of the NACH. • Twenty (20) cases resulted in prosecution with officials being sentenced to prison terms in two of the cases. • In a further six (6) cases prosecution is pending. Prosecution was declined in five (5) cases. • As a result of the successful investigation of cases, 251 officials were found guilty of misconduct. • Of these cases 45 officials were suspended, 120 officials were given final written warnings and 86 officials were dismissed. T • he successful investigation of cases resulted in the recovery of R100 million from perpetrators.

13. CHALLENGES TO THE NACH • Departments have poor or no investigative capabilities. This results in very slow feedback to the NACH which impacts negatively on the credibility of the Hotline. • Many departments do not keep a systematic database of cases in order to track progress on cases. This also results in poor feedback. Such a database could also be useful to assist departments with a trend analysis of possible risks and be used to inform fraud prevention plans.

14. NATIONAL ANTI-CORRUPTION FORUM (NACF) • This comprises the Business, Civil Society and Public Sectors. The purpose of the NACF is: • To contribute towards the establishment of a national consensus through the co-ordination of sectoral strategies against corruption; •  To advise Government on national initiatives on the implementation of strategies to combat corruption; •  To share information and best practice on sectoral anti-corruption work; •  To advise sectors on the improvement of sectoral anti-corruption strategies • The PSC serves as Secretariat to the NACF.

15. NACF (Cont’d) • Since its inception in 2001 the NACF has had its fair share of problems. These include balancing the diaries and agendas of three divergent sectors. This lead to a break in activities during 2002. • Since then the NACF has been revived and has held three national anti-corruption summits. • Some of its achievements include: • An Integrity Pledge was adopted and signed by the leaders of the various sectors represented on the NACF. • South Africa’s Prevention and Combating of Corrupt Activities Act, was popularised by simplifying it through a Guide, both in terms of language and through the use of illustrations. • The NACF also completed research reports on ethics in schools and universities as well as a report on accountability by departments. • Business also completed a study on corruption within the private sector which will become the basis for its future anti-corruption efforts.

16. THE NACF (Cont’d) • The NACF has been struggling to build itself as a sustainable and effective coalition. For this reason it is grappling with: • How to position itself, as the major anti-corruption body in the country, to articulate and consolidate a National Anti-Corruption Framework; • How to engage government as the primary driver for anti-corruption efforts in the country supported by the NACF. • How sectors need to support each other in order to achieve the broader objectives of the NACF; and • How the NACF sectors replicate anti-corruption forums at provincial, regional and local levels. • In order to address all the above issues the NACF has appointed a Task Team to bring recommendations on how to achieve the above.

17. FINANCIAL MISCONDUCT An overview of Financial Misconduct for the year 2008/2009 was released by the PSC on 22 September 2010. The main findings were: • 1204 Cases of financial misconduct were reported for the 2008/2009 financial year. This consists of 260 cases reported by the national departments and 944 by the provincial departments. • Out of 35 national departments, 12 indicated that they had no financial misconduct cases. Out of 110 provincial departments, 43 indicated that they had no financial misconduct cases. • The PSC found that cases in the category “fraud” comprised 53% of the overall number of cases. Cases in the category “theft” comprised 15%.

18. FINANCIAL MISCONDUCT (Cont’d) • The report reveals that financial misconduct was found in all salary levels. • Of the 1204 financial misconduct cases reported, 86% were found guilty. • The cost to the state exceeded R 100 million of which only R 9,9 million was recovered. • Criminal procedures were instituted against 32% of the cases while no criminal procedures were instituted against 44% of the finalised cases. In 23% of the cases, departments failed to provide any indication of whether criminal or any other proceedings were instituted. • The report highlights weaknesses in financial management and the need for oversight bodies to hold such departments to account.

19. OTHER CHALLENGES IDENTIFIED BY THE PSC • Based on its research in three provinces (KwaZulu-Natal, Free State, Limpopo), the PSC has identified several problems and made recommendations thereto: • Provincial anti-corruption forums are inactive. • Training on the Code of Conduct is uneven, and sporadic across departments. • Minimum anti-corruption capability exist in certain departments only. Where they do exist officials are inexperienced. • Few agreements with anti-corruption agencies exist to assist with complex syndicated crime. • Systematic monitoring of corruption is uneven, therefore, not providing departments with recognisable trends in order to adjust fraud prevention plans.

20. FUTURE INITIATIVES • One way of intensifying the promotion of integrity is to conduct lifestyle audits. • A lifestyle audit is simply an amalgamation of reports from a variety of databases which would provide the PSC with a snapshot into certain aspects of the life of a government official. • The areas usually covered in a basic lifestyle audit are properties, motor vehicles (using the e-natis system to identify vehicle owners) , company registrar information and credit histories. • In its scrutiny of the financial disclosure forms, the PSC is already checking with the Deeds Registration Office and the Companies and Intellectual Property and Registration Office (CIPRO) whether senior managers in the Public Service had disclosed everything. • With lifestyle audits the PSC would be taking the scrutiny process forward because it may be used as a barometer of the extent to which fraud and corruption are prevalent in government departments. Hence, a lifestyle audit may be regarded as a necessary means to protect the government coffers.

21. FUTURE INITIATIVES (Cont) • Development of an Integrity Barometer for the Public Service. • For some time the PSC has been tracking certain anti-corruption measures and integrity instruments in the Public Service. • This ranges from evaluating the implementation of the Code of Conduct for the Public Service, assessing the implementation of the Financial Disclosure Framework for Senior Managers, determining the State of Professional Ethics in selected provinces, measuring the effectiveness of the National Anti-Corruption Hotline to monitoring financial misconduct. • While important data is obtained, especially in respect of compliance and implementation rates, attempts at measuring levels of integrity, have not been made. An Integrity Barometer as envisaged by the PSC is an instrument that will draw information on the State of Integrity in the Public Service based on selected indicators and instruments designed to measure performance against these indicators.

22. THANK YOU!