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MANAGEMENT OF GIFTS IN THE PUBLIC SERVICE. PRESENTER : COMMISSIONER SELLINAH NKOSI PUBLIC SERVICE COMMISSION DATE : 15 MARCH 2011 VENUE : BURGERS PARK HOTEL, PRETORIA. PRESENTATION OUTLINE. Introduction Survey by the PSC Should public servants receive any gifts?
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MANAGEMENT OF GIFTS IN THE PUBLIC SERVICE PRESENTER : COMMISSIONER SELLINAH NKOSI PUBLIC SERVICE COMMISSION DATE : 15 MARCH 2011 VENUE : BURGERS PARK HOTEL, PRETORIA
PRESENTATION OUTLINE • Introduction • Survey by the PSC • Should public servants receive any gifts? • Gifts that pose the greatest threats. • Occasions on which gifts are offered. • Policies regarding gifts. • Addressing the issue of gifts Integrity Management Framework • Conclusion
INTRODUCTION • The Public Service is continuously under scrutiny by the public and the media. Such scrutiny is necessary, as public servants are the agents through which the various mandates of government are executed, and in performing their duties are entrusted with public resources, and as such, their actions must never be suspicious. The reality, however, is that public servants are human beings with weaknesses that may be exploited. One measure through which they may be exploited is by accepting gifts, either in a personal capacity or for services rendered. • The issue of gifts in South Africa is an emotive issue because South Africa is a country characterised by diverse communities with diverse cultures. Because of such diversity, the acceptance and non-acceptance of gifts is not always a straight forward matter. • While, the Code of Conduct for the Public Service places a prohibition on the acceptance of gifts in the Public Service, public servants are constantly being showered with gifts, sometimes even without the public servant having the opportunity of refusal. Notwithstanding, the point that stands out very clearly is that the receipt of gifts by public servants tends to weaken the citizens’ trust in the Public Service, as well as run the risk of destroying the fibre of integrity.
INTRODUCTION (Cont…) • A compounding factor is that there appears to be contradictions, inconsistencies and ambiguities with regard to the current regulatory provisions on the acceptance of gifts in the Public Service. These ambiguities and inconsistencies give rise to interpretational issues as far as its implementation is concerned. Given the consequences of breaching regulatory provisions, it is important that such regulatory provisions are clear and that public servants know and understand them. If the regulatory provisions are not clear and are broken by public servants, it would be difficult to hold them accountable. It was against this backdrop that the PSC conducted a survey on the manner in which government departments manage the acceptance of gifts received by public servants.
SURVEY BY THE PSC • A survey was conducted amongst public servants at randomly selected national and provincial departments. In this regard the PSC, in 2008 produced a report on the Management of Gifts in the Public Service. • The Report revealed that 65% of the departments visited did not have a gift policy and gift register. The analysis of the gift policy received (from those that did have policies) further revealed that although most policies cater for the same situations, the policies vary in both comprehensiveness and in content. The current legal framework is clearly in need of amendment. The Public Service Act, 1994 as amended will go a long way in eliminating the current apparent ambiguities and inconsistencies, levelling the proverbial ‘playing field’, as well as adding real value to the national anti-corruption strategies.
SHOULD PUBLIC SERVANTS RECEIVE ANY GIFTS? • The findings of the study showed that while 21% of the respondents were undecided, 44% of the respondents were of the view that public servants should in principle be permitted to receive gifts. Although a significant number was in favour of receiving gifts, 35% were of the view that public servants should not receive gifts. This is based on the opinion that the receipt of gifts could create a situation for potential conflicts of interest to occur. Moreover, the danger of accepting gifts is that public servants open themselves to possible corrupt practices.
GIFTS THAT POSE THE GREATEST THREATS • The types of gifts that pose the greatest threat, according to the respondents, were, in descending order, as follows: • overseas trips (72%); • sponsorships and bursaries for family relations (70%); • weekend away (68%); • hunting or fishing or golfing excursions (61%); • a television set (59%); • invitation to golf days and sporting events (41%); • liquor (41%); • lunch or dinner (27%); • pens and stationery (5%); and • calendars, diaries and ties (4%).
OCCASIONS ON WHICH GIFTS ARE OFFERED • With regard to occasions under which public servants should be allowed to receive gifts, the survey revealed that 66% of the respondents were not in favour of public servants receiving gifts at a pre-contract stage, i.e. before tenders were awarded. Furthermore, 62% of the respondents were of the view that public servants should not receive gifts directly after the awarding of a contract to a service provider, and 63% were of the view that public servants should not receive gifts during a stage when a contract with a department is contemplated. Regardless, during the interviews it came to light that it is an open secret in some departments that service providers offer gifts before and after tenders are being awarded.
POLICIES REGARDING GIFTS • The Report further points out that there is a persistent argument that gifts from an Afro-centric perspective has grey areas as in most cultures it is deemed unacceptable not to accept a gift. However, respondents were of the view that when a policy is formulated on the receipt of gifts, there should be clear guidelines as to how and when to refuse such gifts gracefully. The policy should incorporate all cultures and be fair. In this regard, 56% of public servants were in favour of the view that a gift policy should cater for Afro-centric and other cultural practices. It was for this reason that 60% of the respondents indicated that if a gift of a cultural nature is offered to them they would accept it. Twenty nine percent (29%) of the respondents held the opposite view, with the remaining 11% being undecided.
ADDRESSING THE ISSUE OF GIFTS: INTEGRITY MANAGEMENT FRAMEWORK • A new Integrity Management Framework will be introduced in the Public Service by the Department of Public Service and Administration in the near future. • In order to close the policy gap that exists in both the Code of Conduct and the Financial Disclosure Framework, the Integrity Management Framework provides the following stipulations with regard to the management of gifts: • Public Servants be prohibited from directly or indirectly soliciting or accepting gifts, hospitality or private benefits of any value from any private entity that is contracted to the department to which the public servant is an employee. • Public entities, when rendering service to departments in the public service be prohibited from offering gifts, hospitality or private benefits to employees or their immediate families and relatives. • Public Servants, when performing official duties be prohibited from accepting or soliciting any gifts, hospitality and private benefits from members of the public.
ADDRESSING THE ISSUE OF GIFTS: INTEGRITY MANAGEMENT FRAMEWORK (Cont) • The prohibitions of gifts exclude tokens that may be offered or accepted within normal standards of courtesy or protocol by any entity. This will include tokens such as conference packages (pens, bags, t-shirts, etc) and any promotional materials or gifts that are often offered at professional functions and events; and • In situations where public servants cannot decline a token of appreciation because it might be considered culturally disrespectful, such tokens must be declared and registered in a departmental gift register.
MANAGEMENT OF POTENTIAL CONFLICTS OF INTEREST • Linked to the issue of gifts is the issue of conflicts of interest. In this regard it needs to be noted that the PSC is responsible for the scrutiny of the financial disclosure forms to establish possible areas of conflicts of interest in terms of Chapter 3 of the Public Service Regulations. Through such scrutiny the PSC seeks to contribute to the management of conflicts of interest in the Public Service as it advises Executive Authorities on individuals in their departments who may have potential conflicts of interest and also recommends to them to take action. • For the financial year 2008/2009 the PSC scrutinized a sample of 30%, which amounted to 2628 financial disclosure forms out of 9128. A report in this regard has been produced and tabled in Parliament recently. Figure 1 reflects the number of potential conflicts of interest identified per department and province based on the PSC’s assessment of the sample.
MANAGEMENT OF POTENTIAL CONFLICTS OF INTEREST (Cont) FIGURE 1: NUMBER OS SMS MEMBERS THAT MAY HAVE POTENTIAL CONFLICTS OF INTEREST
MANAGEMENT OF POTENTIAL CONFLICTS OF INTEREST (Cont) • As indicated in Figure 1, out of the 2628 financial disclosure forms scrutinized, the PSC identified 497 senior managers that may have potential conflicts of interest between their private interests and their official duties. This total represents 20% of all senior managers from national and provincial departments that formed part of the sample. The fact that 20% of all senior managers that formed part of the sample may experience potential conflicts of interest illustrates the importance of a system such as the Financial Disclosure Framework as a mechanism to prevent corruption. Through the identification of the potential conflicts of interest departments would be able to manage the risks associated with the conflicts of interest, and ensure that it does not become an actual conflict of interest. • As will be noted from Figure 1 the highest number of potential conflicts of interest at provincial level were identified in the Gauteng Province (207) whilst the National Treasury has the highest number of potential conflicts of interests as compared to other national departments. The extent to which potential conflicts of interest were identified is further analysed in the following sections per national department and province.
MANAGEMENT OF POTENTIAL CONFLICTS OF INTEREST (Cont) IDENTIFICATION OF POTENTIAL CONFLICTS OF INTEREST BY CATEGORY • The potential conflicts of interest of senior managers were identified by the PSC on the basis of the following variables: (i) The relationship between the work of the senior manager and that of the private company the individual is involved in. (ii) The number of companies the senior manager is involved in. (iii) Instances where senior managers share interests in a company with their colleagues. • The different categories of potential conflicts of interest that senior managers that formed part of the sample may experience are outlined in the following Table. Included in this Table is a number of officials from the sample, who were also identified in the Auditor-General’s Report as conducting business with Government Departments.
MANAGEMENT OF POTENTIAL CONFLICTS OF INTEREST (Cont) • As indicated in Table 4, the relationship between the official responsibility of a senior manager and his/her interest in a private company poses the highest likelihood of potential conflicts of interest. In this regard the PSC established 351 cases of senior managers who have interests in private companies whose functions are closely related to those of their departments. The PSC formed an opinion on the basis of the relationship between the work of the designated official and that of the private company the individual is involved in, for example, a senior manager who has shares in a construction company and is employed by the Department of Public Works. • A further 259 cases of potential conflicts of interests were as a result of senior managers having directorships or shares in multiple companies. This raises concerns about the amount of time that such an official would be able to devote to his/her full time employment in the Public Service. For example, the extent of such senior managers’ involvement in the activities of three or more companies may pose conflicts of interest with regard to their official duties, as Section 30 of the Public Service Act, 1994 (as amended) stipulates that: “every officer shall place the whole of his or her time at the disposal of the State”. The view is that should an official be involved in three or more companies he/she would not, in all probability, have the time to devote his/her full attention to the requirements of the State in terms of his/her official responsibilities.
MANAGEMENT OF POTENTIAL CONFLICTS OF INTEREST (Cont) • Cases of officials within the same department sharing a company/private interest were identified in the Office of the Public Service Commission (6), the national Department of Education (6), the Northern Cape (2) and Free State (8). This is potentially a dangerous situation as these officials, in order to advance the interests of the company, may make decisions that could favour each other.
RECOMMENDATIONS ON THE MANAGEMENT OF CONFLICTS OF INTEREST • Charging official with misconduct: The PSC has on numerous occasions advised and reminded Executive Authorities of the requirement that all senior managers in their departments must comply with the Framework by submitting the financial disclosures. It appears that such reminders are not followed up by Executive Authorities in all instances and members of the SMS may easily become complacent with regard to the submission of the disclosure forms. Chapter 3, Section H of the Public Service Regulations clearly stipulates that any designated official who fails to disclose her/his financial interests, or willfully provides incorrect or misleading details, is guilty of misconduct. • The PSC, therefore, recommended that Executive Authorities should ensure that transgressing Heads of Department and other members of the SMS are charged with misconduct for failing to disclose their financial interests in terms of the Disciplinary Code and Procedures, as contained in the SMS Handbook for not complying with the Financial Disclosure Framework. The Executive Authorities should also inform the PSC of any steps taken in this regard and if no steps were taken state the reasons thereof. .
RECOMMENDATIONS ON THE MANAGEMENT OF CONFLICTS OF INTEREST (Cont) • DISCLOSURE OF PRIVATE COMPANIES, CLOSE CORPORATIONS AND PROPERTIES: A total of 210 members of the SMS failed to disclose their directorships/partnerships in private companies and close corporations, while 26 did not disclose their properties. This is in contravention with Chapter 3 of the Public Service Regulations and it is recommended that Executive Authorities charge transgressing Heads of Department and ensure that other members of the SMS are charged with misconduct for failing to disclose their registrable interests by instructing their Heads of Department to do so. The PSC further recommended that members of the SMS be made aware of the fact that they need to disclose all companies, including dormant and non-profit making companies. Companies for which senior managers are performing work but are not receiving remuneration must also be disclosed. Instances where such managers have been charged with misconduct must also be reported to the PSC.
RECOMMENDATIONS ON THE MANAGEMENT OF CONFLICTS OF INTEREST (Cont) • PROHIBITION ON SOLICITING AND ACCEPTANCE OF GIFTS: The provision in the Public Service Regulations that SMS members must disclose gifts with a value of R350.00 or more, has the effect of defeating the purpose of fighting corruption as it does not outlaw the receipt of gifts provided that certain conditions have been met. It is often difficult to determine whether a private gift or benefit was obtained in a manner that cannot be construed as abuse of one’s position in the Public Service. The PSC, therefore, recommended that public servants should be prohibited from directly or indirectly soliciting or accepting private gifts or benefits, irrespective of the value thereof. • The prohibition on the acceptance of gifts, however, should not affect those tokens of appreciation that are offered within the normal standards of courtesy such as conference packages or promotional material that are offered at professional functions and events. There would also be instances where a public servant may not be able to decline a token of appreciation because this might be construed as culturally offensive. In such instances, the gifts must be declared and registered in the departmental gift register.
RECOMMENDATIONS ON THE MANAGEMENT OF CONFLICTS OF INTEREST (Cont) • CONDUCTING LIFESTYLE AUDITS: Due to the continuing reluctance of SMS members to submit their financial disclosures, the PSC is of the opinion that the management of conflicts of interests could further be strengthened by conducting lifestyle audits. This implies that if an Executive Authority or the PSC is of the opinion that there has been incomplete disclosure of financial interests by a senior manager, it may embark on a lifestyle audit. Here it must be emphasized that such a lifestyle audit would not question an official’s right to wealth, but rather, how such wealth has been acquired. This recommendation of lifestyle audits should be regarded as one of the strategies that could add value to the management of conflicts of interest and the combating of corruption in the Public Service.
CONCLUSION • One of the critical recommendations of the Report on gifts is that consideration should be given to strengthening the current legal regime to such an extent that the unauthorised offering and accepting of gifts, benefits or any other form of gratification be prohibited with a concomitant criminal sanction. It is further recommended that the criminal prohibition should not only be in respect of persons or entities who contract with government, but must be wide enough to include any person who ‘deals’ with government. • The Report also noted that exceptions based on traditional or cultural considerations are difficult to define, very difficult to police and virtually impossible to prove or disprove. Such exceptions may create further confusion, lead to unequal treatment before the law and may even create opportunities for unscrupulous public servants and others to offer and accept gifts with impunity. However, it is acknowledged that most traditional or cultural gifts are not translatable into monetary value as they are regarded as symbolic. Therefore, it is recommended that should a public servant receive a gift based on a cultural tradition, it should be treated and managed in a culturally sensitive manner without compromising the standards of accountability and transparency.
