Fighting Corruption and Promoting Ethical Conduct in the Public Service: Provincial Risk Management Dialogue

1. PROVINCIAL RISK MANAGEMENT DIALOGUE Department of Finance (NW) RUSTENBURG MR TD MODIMOLA & MA SEEKARO 8–9 November 2018

2. PRESENTATION OUTLINE • Mandate of the Public Service Commission • Fighting corruption and promoting ethical conduct • Interventions: Fighting corruption and promoting ethical conduct • Promotion of Code of Conduct • Gift management • Remunerative Work Outside Public Service (RWOPS) • Financial Disclosure Framework • Financial Misconduct • National Anti-Corruption Hotline

3. MANDATE OF THE PUBLIC SERVICE COMMISSION • The Public Service Commission derives its mandate from sections 195 and 196 of the Constitution, 1996. • The PSC is tasked and empowered to, amongst others, investigate, monitor, and evaluate the organisation and administration of the Public Service. • The PSC also has an obligation to promote measures that would ensure effective and efficient performance within the Public Service and to promote values and principles of public administration as set out in the Constitution, throughout the Public Service. These values and principles are, inter alia: • A high standard of professional ethics • Efficient, economic and effective use of resources • A development-orientated public administration • Provision of services in an impartial, fair and equitable way, without bias • Responding to people’s needs and encouraging the public to participate in policy-making • Accountable and Transparent Public Administration

4. FIGHTING CORRUPTION AND PROMOTING ETHICAL CONDUCT • Public servants have to act with integrity and commitment in their work especially in a developmental society like South Africa, where the majority of citizens have great expectations from government to deliver services effectively. • The interaction between public servants and the public can, however generate opportunities which test public servants resolve to uphold their levels of integrity and honesty. • Recognising that public servants may be susceptible to unethical behaviour, government has put in place a comprehensive set of legislation and policy frameworks and created supporting institutions to build integrity and fight corruption. • The following are some of the interventions the PSC is implementing to fight the risk of corrupt activities and promote ethical conduct; • Promotion of Code of Conduct • Gift Management • Remunerative Work Outside the Public Service (RWOPS) • Financial Disclosures • Financial Misconduct • Investigations of Complaints through the National Anti-Corruption Hotline

5. FIGHTING CORRUPTION AND PROMOTING ETHICAL CONDUCT • Code of Conduct In terms of Chapter 2 of the PSR (2016), departments are required to promote the Code of Conduct for the Public Service with their officials. The Code of Conduct promotes honesty and integrity in the workplace. • Gift Register and Policy in Place According to the Code of Conduct for the Public Service an employee shall not without prior written approval of the Head of the Department accept any gifts during the perfomance of his duties in the Public Service. It is therefore required of government departments to have a gift register and a policy that guides the acceptance of gifts. The prohibition of gifts excludes all tokens that may be offered or accepted within normal standards of courtesy or protocol by any entity; such as pens, bags and T-shirts. • Remunerative Work Outside the Public Service Government does not say officials should not engage in RWOPS but through Regulation 13 (c) of the Public Service Regulation, 2016, it introduced a prohibition on employees conducting business with an organ of state or being a director of a public or private company conducting business with an organ of the state.

6. INTERVENTIONS: FIGHTING CORRUPTION AND PROMOTING ETHICAL CONDUCT (CONT…) • Remunerative Work Outside the Public Service (Conti…) In this instance a transitional measure was introduced to deal with an employee who is conducting business with, or who is a director of a company conducting business with an organ of the state to require such employees to withdraw from such practice or resign. Failure to do so will result in non-compliance with the Act and shall be dealt with in terms of section 16A and 16B of the Public Service Act • Financial Disclosure Framework Part 2: Financial disclosure (regulation 16 to 21) indicates that provision has been made for the submission of disclosures electronically and to provide for the disclosure of vehicles.

7. FINANCIAL DISCLOSURE FRAMEWORK • Chapter 2 (18) of the PSR, 2016 provides that every member of the SMS should, not later than 30 April of each year, disclose to their respective Heads of Department (HoDs) particulars of all their registrable interests in respect of the period 1 April of the previous year to 31 March of the year in question. Within the same period, HoDs must submit their disclosure forms to their respective Executive Authorities • The disclosures must be submitted by 31 May of each year to the PSC for further analysis and record-keeping. • Persons who assume duties as SMS members after 1 April in a year must submit their disclosure forms within 30 days after assumption of duty, in respect of the period of 12 months preceding their assumption of duty as SMS members. The financial disclosure forms can be submitted either manually or by e-Disclosure, but SMS members are encouraged to submit by e-Disclosure.

8. COMPLIANCE: SUBMISSION RATE OF FINANCIAL DISCLOSURE FROMS COMPARISON OF THE SUBMISSION RATES BY THE DUE DATE IN RESPECT OF THE LAST FIVE (5) FINANCIAL YEARS. Figure 1: Submission of financial disclosure forms by the North West Province by due date between 2013/2014 and 2017/2018 financial years • Figure 1 above shows that there is a significant improvement of 14% in the submission rate recorded in 2017/2018 financial year in the North West Province. The submission rate by the due date in the North West Province was 85% for the 2016/2017financial year and has improved to 99.4% during the 2017/2018 financial year. The North West Province is commended for its improved performance in complying with the Framework. • The Department of Health and the Department of Tourism are the only two departments which deprived the province the opportunity to achieve the required 100% submission rate.

9. SUBMISSION RATE OF FINANCIAL DISCLOSURE FROMSCOMPLIANCE PER DEPARTMENT FOR THE LAST FIVE (5) FINANCIAL YEARS (NORTH WSET PROVINCE)

10. FINANCIAL DISCLOSURE FRAMEWORK: SCRUTINY OF FINANCIAL DISCLOSURE FORMS • The financial disclosures for the 2016/2017 financial year were submitted to the PSC in terms of the PSR of 2016. The PSC is required to scrutinise these financial disclosure forms in terms of Regulation 21(1) of the PSR of 2016. In terms of this Regulation, the PSC must assess compliance with the requirement to disclose all financial interests and also to establish whether the involvement of SMS members in any activities of the companies could lead to conflicts of interest. • As at 31 March 2018 the PSC had scrutinised all the received financial disclosure forms of SMS members. The scrutiny of the financial disclosure forms revealed that a total of 721 SMS members in both the National and Provincial Departments did not disclose their directorships in private and public companies. This is in contravention of Regulation 19 of the PSR, 2016.

11. Cont… Table 1: The extent of non-disclosure of directorships during the 2016-17 Financial year

12. Cont… • Table 1: (previous slide) above shows that 1943 SMS members in both national and provincial departments have directorships in private and public companies. The Table further shows 721 (37%) of the SMS members did not disclose their directorships. The national departments have a total number of 485 (43%) SMS members who did not disclose their directorships and 236 SMS members in respect of provinces. • The PSC established during the scrutiny process that there are SMS members who engage in other remunerative work RWOPS, some without the necessary written approval of the relevant EA. The extent to which SMS members were engaged in RWOPS during the 2016/2017 financial year is reflected in Table 2 (next slide).

13. FINANCIAL DISCLOSURE FRAMEWORK: OTHER REMUNERATIVE WORK (2016-17 FINANCIAL YEAR)

14. FINANCIAL DISCLOSURE FRAMEWORK: MANAGEMENT OF GIFTS • Regulation 13(a) of the PSR, 2016 provides that employees shall not receive, solicit or accept any gratification from any employee or any person in return for performing or not performing his or her official duties. Regulation 13(h) provides further that an employee shall not receive or accept any gift from any person in the course and scope of his or her employment, other than from a family member, to the cumulative value of R350 per year, unless prior approval is obtained from the relevant EA. • The PSC further reveals that a total of 481 SMS members in both the National and Provincial Departments received gifts and/or sponsorships during the period under review. The total value of gifts and/or sponsorships received by these SMS members amounted to R7 664 557.82 (next slide)

15. FINANCIAL DISCLOSURE FRAMEWORK: BREAKDOWN OF GIFTS/SPONSORSHIPS, 2016/17

16. FINANCIAL DISCLOSURE FRAMEWORK: CHALLENGES EXPERINCED BY THE PSC TOWARDS THE MANAGEMENT OF FINANCIAL DISCLOSURE FRAMEWORK • Late submission of financial disclosure forms • Some departments are still un-cooperative when requested to submit documents to the PSC, therefore the PSC could not ascertain the existence of actual or potential conflicts of interests. • Departments did not provide the PSC with reports on actions taken against those who failed to fully comply with the framework • The PSC has noted that while SMS submit their financial disclosure forms on time, EAs and HoDs are not submitting disclosure forms to the PSC by the due date.

17. FINANCIAL DISCLOSURE FRAMEWORK: RECOMMENDATIONS • The involvement of SMS members whose links to companies are construed as posing potential conflicts of interest must be closely and tightly monitored by their departments,to ensure that such involvement does not lead to actual conflicts of interest. • HoDs must cause those SMS members who are involved in actual conflicts of interest to remove such conflicts. The starting point would be to deregister the companies of such SMS members from the Central Supplier Database of the National Treasury. • HoDs must begin to apply section 31 of the PSA, to ensure that remuneration earned through unauthorised RWOPS is recovered and paid into revenue. This will have both retributive and a deterrent effect on the offenders and the would-be offenders respectively. • The Minister for Public Service and Administration should consider issuing a directive to make provisions for the following: • To make it compulsory for all departments to have gift policies that can properly respond to Regulation 13(h) of the PSR, 2016. • To make it compulsory for the departments to have gift registers that must be submitted to the PSC together with the copies of disclosures by 31 May of each year. • The extension of the period within which the EAs should respond to the PSCs findings and recommendations to 60 days.

18. PROMOTION OF PROFESSIONAL ETHICS • The PSC is mandated according to Section 195 “to promote a high standard of professional ethics”. In recent years, the PSC conducted workshops on the Code of Conduct for the Public Service (COC) in departments in fulfillment of this mandate. • Dr Zola Skweyiya National School of Government (former NSG) on occasion also invites the PSC to conduct workshops on the Code of Conduct for the public service as well as professional ethics, as part of its training programme. • The PSC therefore adopted a strategy for the systematic promotion of professional ethics. • The PSC however has limited financial and human resource capacity to conduct extensive promotion campaign. • PSC is aware of the need for the intensification of the professionalisation of the public service. Its approach through the promotion of the CoC seeks to do this in response to the call from the National Development Plan (NDP).

19. PROMOTIONAL ACTIVITIES • In view of the need to promote professionalism in the public service the PSC adopted the following approach: • Briefings and workshops on issues related to professional ethics at departments. The content of the workshops cover the following (amongst others): • The Code of Conduct (CoC) for the public service • Management of conflict of interest; • Public Servant engaging in remunerative work outside the public service; and • The National Anti-Corruption Hotline. • Issues identified by the media and other stakeholders, alleged unethical behaviour and irregular activities such as financial misconduct have also been used as starting point for promoting the CoC. • Roundtables on professional ethics in the targeted departments.

20. PROMOTION OF PROFESSIONAL ETHICS: WORKSHOPS CONDUCTED • The number of workshops for the respective financial years are as follows: • 2014/15 - 18 • 2015/ 16 - 31 • 2016/17 – 12 • One of the reasons for the drop in the number of workshops is the many cancellations of appointments to host workshops from departments. This often occurs at the last minute.

21. MANAGEMENT OF THE NACH • Cases of alleged corruption received from the NACH are forwarded to national and provincial departments, as well as public entities for further handling and investigation. • Departments are afforded an opportunity to provide feedback to the PSC on progress made with the investigations. • Urgent/sensitive cases are referred within 24 Hours. • In terms of this protocol the feedback should be submitted to the PSC within 40 days after receipt of the PSC’s request. • The PSC investigates certain categories of cases of alleged corruption reported to the NACH. • Cases of alleged corruption received from the NACH are reported to FOSAD on a monthly basis to enhance the management of these cases.

22. CASES OF ALLEGED CORRUPTION REFERRED TO DEPARTMENTS DURING THE FINANCIAL YEAR 2016/17 22

23. CHALLENGES EXPERIENCED THROUGH THE MANAGEMENT OF THE NACH • In many instances whistleblowers are unable to provide sufficient information or documents to substantiate the allegations they make; • Incidences have occurred where whistleblowers have been intimidated when reporting corrupt activities or emanating from the investigation of cases of alleged corruption; • Many callers prefer to remain anonymous. Anonymity impacts negatively on the investigation of cases, as whistleblowers cannot be reached to verify or provide further information; • Previous studies of the PSC into the investigation of the NACH cases have shown that departments generally do not have adequate capacity to investigate cases of alleged corruption reported on the NACH and referred to them. In the North West province where OTP identifies lack of investigative capacity, the OTP intervene by investigating the cases/assisting the departments during the investigating process.

24. STATISTICAL OVERVIEW OF FINANCIAL MISCONDUCT

25. AMOUNTS OF MONEY INVOLVED IN FINANCIAL MISCONDUCT PER DEPARTMENT (2017/18)

26. INSPECTIONS • As part of its oversight responsibility, the PSC from time to time conducts service delivery inspections with a view to improve the performance of the Public Service(Announcedand Unannounced). • The main purpose is to asses the level of services provided to the public that is: • whether the conditions observed at the visited sites are in line with the relevant prescripts. • in areas where the level and quality is found wanting, specific recommendations are made so as to ensure improvement in service delivery.

27. CONCLUDING REMARKS • The identification and management of conflict of interests for public servants should be kept with integrity and be promoted in the workplace. • This should be in compliance with the framework and should not be seen purely as a mandatory requirement but an ethical obligation. • The departments are urged to adhere to timeframes during complaints resolution and provide feedback on the implementation of recommendations. • The requested and required information or documents should be presented timeously with all accuracy.

28. THANK YOU! KE A LEBOGA