Roundtable on Financial
Misconduct 2013
Closing Remarks
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
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
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
Theft
Theft of
• State funds; Laptops; Petrol; Petty cash; State
property
Misappropriation & Abuse
•
•
•
•
Theft
• Travel and subsistence claim fraud
• Social Grant Fraud
• Capturing fraudulent transactions
Abuse of state property
Damage to government vehicle
Petrol card abuse
Telephone abuse
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
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
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
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
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
Major challenges 1:
Building leadership that is:
• Exemplary
• Oriented towards the public
interest
• Inspirational
• Authoritative
• Innovative
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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.
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