Roundtable on Financial Misconduct 2013

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
• Introduce a new transfer to an institution without treasury
• 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
• Bribery
Financial Mismanagement
• Wasteful and fruitless expenditure
• Failure to follow procurement processes
• Payments to service providers without receivong
Gross negligence
• Loss of state funds/property
• Not authorised to approve expenditure
Theft of
• State funds; Laptops; Petrol; Petty cash; State
Misappropriation & Abuse
• 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
• 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
– 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
• 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
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
• Inspirational
• Authoritative
• Innovative
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
• 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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