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According to the Public Service Commission (PSC) – a regulatory body reporting to the department – financial misconduct in departments is rarely reported. This is despite s in the face of legislation that requires accounting officers to report financial irregularities to track the misuse of public funds and prevent corruption. Every year millions of rands are lost in irregular spending that directors-general are unable to explain to Parliament.
Know how to report financial misconduct
At a recent forum for senior managers working in the financial and regulatory areas of government, PSC director-general Richard Levin spoke of the importance of raising awareness of the standards for reporting financial misconduct. One of the core functions of the PSC is regulating and monitoring expenditure.
Levin said departments lack a sense of urgency in misconduct reporting, a mandatory requirement of the Public Finance Management Act and Public Service Act. Departments also tend to ignore the reporting format the PSC developed to simplify the process, he said, and general ignorance of the legislation.
“There is gross under-reporting within departments, and the need for control systems for this and other areas is clear,” he said. He added that in the 2009/10 financial year, the PSC informed the department of 249 cases of misconduct, a number that does not tally with the unexplained losses the state incurred in that period, or in the years since.
Levin said in the bulk of cases unearthed in PSC investigations, lower and middle management is culpable.
“Do keep in mind that there is under-reporting from departments, so the figures are not necessarily an accurate account of what is really happening.”
Levin added that while the PSC’s oversight role may smaller than that of, for example, the Auditor General, it remained important by providing information to other oversight authorities, whose would then investigate further.
The PSC, said Levin, has been widening its base to the provinces, and holding more awareness drives to teach officials the importance of reporting and rooting out misconduct.
Public servants go back to school
Over the longer term, minister Sisulu hopes to turn things around with a new school of government, to be set up later this year.
The school will train current and potential government employees in the skills required for their field of work. Accounting officers will be trained in compliance with the laws governing the disciplinary measures to be taken against those guilty of misconduct, and the required steps in reporting these cases to the PSC.
Departments’ skills shortages have been highlighted by opposition parties and regulatory bodies such as the Public Protector, the Auditor General and the PSC. Weak departmental leadership is also seen as a reason government loses millions every year, while corruption flourishes because no-one is taken to task.
PSC research in 2012 found that:
- Development of anticorruption strategies is uneven in departments
- Some provinces only have draft anticorruption strategies
- Few departments have standardised investigative procedures in place or receive training in investigation
- Promotion of the public service code of conduct is inconsistent
- Many officials do not even have a copy of the code
- There is little evidence of departments taking the prescribed steps against officials implicated in financial misconduct
Levin said that through the discussion forum, the PSC aimed to bring officials up to speed on what they were doing wrong and prepare them for measures to be put in place in the future.
PSC chairman Ben Mthembu said PSC research has revealed that most departments are unable to recover funds lost to financial misconduct, or are slow to do so.
“There is no common understanding of what constitutes financial misconduct among departments or how these funds must be recovered,” he said.
There is also confusion about what constitutes financial misconduct in government, and departments tend to abandon investigations if they are unsure of the applicable legislation, or if they don’t know how to classify the case, Mthembu said.
He added that there is a communication problem between the PSC and departments, who don’t ask for help and simply leave cases in limbo. Both the PSC and Treasury have advisory roles for departments, but are not asked for help.
According to Sisulu, her department plans to blacklist public servants dismissed for fraud, financial mismanagement and misconduct. They will be barred from any government department or agency as employees or service providers.
Furthermore, disciplinary processes will continue even if the official resigns while the investigation against them is pending.
“Financial misconduct by public servants disadvantages government, but more importantly, it disadvantages citizens,” said Mthembu.
