The Public Service Commission (PSC) releases a Report on Profiling and Analysis of the Most Common Manifestations of Corruption and its Related Risks in the Public Service, April 20 2011

A. BACKGROUND

Corruption is a global concern that seriously hampers development and diverts resources from where they are needed most. South Africa has responded actively to the fight against corruption. As part of monitoring the anti-corruption initiatives, the PSC assessed the most common manifestations of corruption and their related risks in the Public Service (see report here - PDF).

The PSC based its assessment on the total number of cases (7766) that have been reported to the National Anti-Corruption Hotline (NACH) since its inception in September 2004 to 31 June 2010. The assessment was aimed at raising awareness on the common manifestations of corruption and to determine high risk corruption areas and to propose solutions to manage them.

B. KEY FINDINGS

a. The PSC found that the common forms in which corruption manifests itself are fraud and bribery (1511), mismanagement of Government funds (870), procurement irregularities (720) and appointment irregularities (627).

b. The PSC also found that the current anti-corruption infrastructure tends to focus mainly on the investigations of cases of alleged corruption instead of focusing on a multi-pronged approach, namely prevention, detection and investigation.

c. The Report notes the encouraging trend of the establishment of dedicated centralised anti-corruption units in the Offices of the Premiers and national departments to assist government in its effort to fight corruption in the Public Service.

d. While government's National Anti-Corruption Strategy considers risk management as a strategic consideration in the fight against corruption, the Report contends that risk management is not being adequately implemented, managed or coordinated in the Public Service by the relevant anti-corruption units of departments where they exist. While some departments may perform regular risk assessments and risk analyses as part of their ongoing activities, the PSC found that there is an insufficient interface between risk management functions on the one hand, and anti-corruption units on the other hand. This in turn results in an inadequate extraction and analysis of fraud and corruption risks.

e. The PSC also found that forty percent (40%) of the sampled departments have anti-corruption policies of reasonable quality, with evidence of implementation. The remaining 60% either have no policies or have very basic policies of poor quality.

f. The PSC found that the areas of utmost concern to departments are those where officials can use their discretion to decide whether or not to investigate cases of alleged corruption. In this regard, the officials tend to request the closure of cases even before these have been investigated. This has resulted in queries from whistleblowers who are concerned about cases of alleged corruption not being investigated and the necessary feedback not being provided.

g. The Report shows that departments are often lenient in imposing disciplinary sanctions against officials found guilty of fraud and corruption. It is common to find written or final written warning to officials found guilty of fraud and corruption. The PSC also found that disciplinary enquiries are very time consuming, and that departments take too long to finalise enquiries against officials suspected of fraud and corruption. Section 7.2 ( c) of the Disciplinary Code and Procedures provides that "if an employee is suspended or transferred as a precautionary measure, the employer must hold a disciplinary hearing within a month or 60 days, depending on the complexity of the matter and the length of the investigation. However, the PSC found that departments take more than 60 days to finalise disciplinary enquiries even in minor offences. This is too costly for Government as the officials are being suspended from duty with full pay.

h. The Report shows that fifteen percent (15%) of the sampled departments have advanced investigative capacity whilst twenty-five percent (25%) have basic capacity. The remaining sixty percent (60%) of the sampled departments have no basic investigative capacity. In this regard, it needs to be noted that these departments have no forensic investigative plans and protocol documents for investigating cases of corruption and this resulted in departments outsourcing investigations to forensic firms.

C. RECOMMENDATIONS

a. Given the volume of fraud and bribery cases received through the National Anti-Corruption Hotline which is being managed by the PSC, it is recommended that internal controls in areas of procurement and financial management should be strengthened. Likewise, departments should periodically conduct surprise procurement audits of selected projects to identify weaknesses and malpractices in procurement processes. The risk management plans and fraud prevention plans of departments must also be updated to address the risks identified.

b. The PSC recommends that the internal controls and management of risks in departments must be strengthened further. The fact that 30% of the sampled departments did not conduct risk assessments is a cause for concern as this is a basic requirement for the successful implementation of risk assessment and fraud prevention plans as provided in section 38 of the Public Finance Management Act (PFMA). Furthermore, each Accounting Officer must integrate an analysis of corruption risk management strategy required in terms of the PFMA.

c. The PSC also recommend that departments report all fraud and corruption related activities to the SAPS, in order for criminal action to be taken against perpetrators.

d. The Executive Authorities and Accounting Officers must be held accountable if they do not ensure that disciplinary enquiries are resolved within 60 days. Furthermore, guidelines on minimum sanctions for specific offences of fraud and corruption must be issued by the Minister for Public Service and Administration. The guidelines should make provisions for minimum sanction to be imposed by departments in acts of misconduct.

In relation to the enhancement of investigative capacity in the Public Service, the PSC recommends the following:

e. Provinces must establish centralised Anti-Corruption Investigative Units as failure to do so will impact negatively on the success of the NACH and will erode efforts to build integrity within the Public Service. The centralised Anti-Corruption Investigative Unit will also ensure that there is proper coordination of cases in provincial departments. It will also ensure that evidence is not tampered with and cases are thoroughly investigated.

f. The Offices of the Premiers in the Provinces must commit adequate resources to prevention, detection and investigation of corruption. Integrity Management units should be created through the appointment of appropriately skilled persons and through the training of officials in the discipline of forensic investigations.

g. The investigative capacities in the local sphere of government, which is currently fragmented needs coordination and integration. The PSC is of the view that more attention should be devoted to the prevention of corruption and to identifying and eliminating systematic regulative and organisational gaps that create corruption-prone environment.

h. Departments and public entities must conduct an in-depth assessment of fraud risk management frameworks and strategies. The outcome of such assessment could prevent over-investment in sub-optimal anti-fraud areas.

D. CONCLUSION

The assessment of the PSC on the most common manifestations of corruption and its related risks in the Public Service points to the fact that more could be done in prevention, detection and investigation of corruption if strategies, structures and anti-corruption capabilities are well co-ordinated. The improvement of investigative capacity inevitably means that government must commit as much resources as possible to address capacity constraints in relation to the investigation of cases of alleged corruption. Improving investigative capacity would result in a higher rate of feedback and, therefore, enhance government's resolve to combat and prevent corruption.

Statement issued by the Public Service Commission, April 20 2011

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