1. Roundtable on Financial Misconduct 2013 Closing Remarks

2. Defining Financial Misconduct Accounting Officers and officials will be guilty of financial misconduct if they, amongst others: Fail to pay creditors within 30 days from receipt of a valid invoice Fail to report unauthorised, irregular or fruitless and wasteful expenditure to the relevant treasury Commit an act that undermines the department’s internal control system

3. Defining Financial Misconduct Process a payment without authentic and verifiable source documents Introduce a new transfer to an institution without treasury approval Fail to submit financial statements to the relevant treasury and to the Auditor-General within 2 months from year end (May) Fail to disclose any direct/indirect personal or business interest in a bid Abuse state equipment, including vehicles

4. Types of Financial Misconduct Reported Corruption Bribery Financial Mismanagement Wasteful and fruitless expenditure Failure to follow procurement processes Payments to service providers without receivong goods Gross negligence Loss of state funds/property Not authorised to approve expenditure TheftTheft of State funds; Laptops; Petrol; Petty cash; State property Misappropriation & Abuse Abuse of state property Damage to government vehicle Petrol card abuse Telephone abuse Theft Travel and subsistence claim fraud Social Grant Fraud Capturing fraudulent transactions

5. Managing the disciplinary process better The AG argued that consequences are critical to reduce financial misconduct Treasury’s Disciplinary Boards – Establish a panel of independent experts on state finance and public accounting to hear serious cases of financial misconduct – Treasury Instruction will be issued on circumstances when board hears charges – List of persons will be published as part of the circumstances when a board hears charges DPSA’s central unit to support expedition of disciplinary cases DPSA’s guideline on sanctions

6. Key issues arising – way forward The PSC is encouraged by the inputs and discussions of today We hope that there are areas of shared understanding that have emerged to assist departments in managing financial misconduct There is a need for further engagement between the Treasury and the PSC on a template for financial misconduct Following this, a further engagement with this group on the template

7. Key issues arising – way forward The PSC will continue to put pressure on departments to recover funds lost through financial misconduct We need to explore standing operating procedures for dealing with financial misconduct There is a need for accounting officers to regards matters of financial misconduct as strategic management matters

8. Key issues arising – way forward Accounting officers must ensure that adequate resources are made available to deal with financial misconduct The PSC will coordinate a meeting with other stakeholders in this area to ensure effective collaboration and avoid unnecessary duplication

9. What is to be done? Strong financial management and optimal use of resources will enable the country to better fight poverty, social inequality and unemployment Focus on fighting corruption and eliminate waste and misuse of resources Use financial misconduct reports to update risk registers Provide regular feedback to management on cases of financial misconduct Strengthen the political and administrative will to improve financial management and fight maladministration and corruption

10. Major challenges 1: Building leadership that is: Exemplary Oriented towards the public interest Inspirational Authoritative Innovative 10

11. Major challenges 2 Ensuring professional ethics and dealing with financial misconduct in the public service is an ongoing priority but requires dedicated capacity and so resources are needed. In a context of acute inequality and severe poverty, and the need to develop comprehensive government programmes to address these, making a persuasive claim for such resources is challenging. 11