1. Key elements of an effective anti-corruption strategy to promote ethical behaviour and build public confidence in the public sector

4. Corruption statistics:
Corruption Perceptions Index (CPI) 2017:
South Africa’s score of 43 represents a drop of two points from 45 in 2016.
Sub-Saharan Africa: 9/10 (2nd last from the bottom)
BRICS countries: 71/180 (“better” performer amongst the BRICS countries)
SIU Statistics:
The value of money and/or assets potentially recoverable – R126 million
The actual value of money and/or assets recovered – R43 million
The value of potential loss prevented – R106 million
The value of contract(s) and/or administrative decision(s) / action(s) set aside or deemed invalid – R4 billion
The value of matters in respect of which evidence was referred for the institution or defence/ opposition of civil proceedings (including arbitration or counter civil proceedings) – R3 billion

6. AGSA’s role in dealing with corruption
The auditor is responsible for
Obtaining responsible assurance that the financial statements and reported performance against pre-determined objectives are free from material misstatement, whether caused by fraud or error; and
No instances of material non-compliance have come to the attention of the auditee, whether caused by fraud or error.
Planning and executing the audit
Audit planning specific activities that are designed to assess the risk of fraud and corruption.
During execution, specific procedures are performed to respond the assessed risk of fraud.
The AGSA’s audit methodology allowed the AGSA to follow an audit approach which is much more risk focussed than before.
One of the key aspect of the methodology is now compulsory involvement of fraud specialist in audits that are considered high risk.
The fraud specialist assists the audit team in detecting risks of fraud and corruption which ultimately adds value to the auditee.

7. The fraud specialists’ role
Assess inherent risk of fraud and corruption: knowledge of the business
Pre-planning stage
Planning stage
Execution
stage
Reporting
When
Intensive fraud and corruption risk detection analysis; ideal to assist with sample selection
Fraud and corruption assurance on specific high risk areas;
Guidance on specialised procedures
Advise on findings relating to fraud and corruption

8. Source: Robert Klitgaard (academic anti-corruption research)

9. Irregular expenditure10

10. Section 195 of The Constitution stipulates the democratic values and principles that must govern public administration.

11. Elements of ethical conduct in the public sector
Section 195 of The Constitution stipulates the democratic values and principles that must govern public administration, which include:-
Services must be provided impartially, fairly, equitably, without bias
Efficient, economic and effective use of resources must be promoted
Public Administration must be accountable
A high standard of professional ethics must be promoted and maintained

12. Model for effective management of corruption
It is important to place a strong emphasis on fraud prevention, which may reduce opportunities for fraud/ corruption to take place, and fraud deterrence, which could persuade individuals not to commit fraud because of the likelihood of detection and punishment.
This involves a commitment to creating a culture of honesty and ethical behaviour which can be reinforced by an active oversight by management, and implementing a well-articulated code of ethics.
Prevention
Implementing and maintaining effective measures any breach of ethics.
Detection
Allegations of unethical conduct are investigated and appropriate action is taken based on the outcome of the investigation.
Consequences management

13. The winning formula: SOUND ETHICAL CULTURE Ethical conduct
Elements of ethical conduct in the public sector:
Services must be provided impartially, fairly, equitably, without bias
Conduct corresponds to values and principles of particular institution
Individual must have an accountability standard
A public servants duty is a “steward” to the public
SOUND ETHICAL CULTURE
Anti corruption
strategy
Reporting mechanism

14. Critical considerations in anti-corruption strategies
Clarity in legal framework and policies
Understanding of current reality and threats
Political and/or leadership will
Clear objectives
Promotion of institutional integrity
Clarity of ethical misconduct and corrupt acts
Collaborative implementation
Monitor and evaluate

15. Implementing an effective anti-corruption strategy:
Promote a culture of whistle blowing
Consider whether the organization also needs an ethics hotline.
Create awareness of reporting mechanisms
Provide training about process and what is to be expected
Explain confidentiality and anonymity
Provide protection (PDA)
Investigate reports (no sweeping of issues under the carpet)
Provide feedback to whistle-blowers and the organisation as a whole
*Reward or celebrate ethical heroes*

16. Activities for reporting:
Example
Why must employee report
Illegal or unlawful activity
Theft, fraud, corruption
Obliged by law to do so (POCA)
Violation of procedures
Rules, policies, regulations
Failure to do so exposes the public sector institutions to financial losses and reputational damage
Wasteful conduct
Decisions or actions leading to wasteful conduct
Demonstrates accountability for public funds, builds public confidence
Unethical conduct
Transgressions of the Code, values, other misconduct such as harassment
Failure to do so erodes the culture of the public sector institution

17. Reporting mechanisms:
Governed by the Protected Disclosures Act
Disclosure must be in good faith – reporting in bad faith is an offence
In order to build confidence into the process, employer must:
Implement internal whistle-blowing procedures
Ensure that employees are aware of the procedures
Ensure that due process is followed regarding communication and decision to investigate
Inform the employee of the outcome of the investigation
Examples of occupational detriment – disciplinary action; dismissal; suspension; demotion; intimidation; transferred against will

18. The Constitution of the Republic of South Africa, 1996 (Chapter 10): “a high standard of professional ethics must be promoted and maintained in public administration”

19. Questions ???

20. How to get in touch with the AGSA