Fraud and corruption in the Public Service will always be problematic, counter-productive, and devastating, especially in young democracies and developing countries. Although government introduced and continues to add various forms of controls, the persistence of criminals continuously challenges these controls for self-enrichment.
To prevent and detect fraud and corruption in the Public Service, lifestyle audits are a critical and legitimate management tool and forms part of a department’ system of risk management.
Fraud and corruption are usually committed by means of “off book” transactions, typically the acceptance of a bribe or by manipulating records, especially by those involved in tenders and procurement.
These ”off book” transactions are very difficult to detect and dishonest inclined professionals are able to conceal their fraudulent actions with disturbing alacrity and ease, particular in work environments with weak controls or limited segregation of duty.
In most cases, the only clue to these illicit activities is a sudden unexplained change to an employee’s lifestyle.
The Guide to implement Lifestyle Audits in the Public Service
The Minister for the Public Service and Administration, Minister Senzo Mchunu, approved the Guide to implement Lifestyle Audits in the Public Service, which, from 1 April 2021, makes it compulsory for National, and Provincial Departments as well as Government Components to conduct lifestyle audits.
This Guide seeks to assist Departments and Government Components to implement lifestyle audits in line with part 3 of Chapter 2 in the Public Service Regulations (PSR), 2016.
Regulation 22 of the PSR, 2016, provides for a head of department to- “(a) analyse ethics and corruption risks as part of the department’s system of risk management”.
Heads of departments and their delegated officials (notably Ethics Officers and Investigators) are, therefore mandated to conduct lifestyle audits.
Apart from analysing ethics and corruption risks as part of a department’s system of risk management, a head of department is also responsible in terms of the PSR, 2016 (regulation 22) for the following anti-corruption and ethics functions:
“(b) develop and implement an ethics management strategy that prevents and deters unethical conduct and acts of corruption;”
“(c) establish a system that encourages and allows employees and citizens to report allegations of corruption and other unethical conduct, and such system shall provide for-
(i) confidentiality of reporting; and
(ii) the recording of allegations of corruption and unethical conduct received through the system or systems;”
“(d) establish an information system that-
(i) Records all allegations of corruption and unethical conduct;
(ii) Monitors the management of the allegations of corruption and unethical conduct;
(iii) Identifies any systemic weaknesses and recurring risks, and
(iv) Maintains records of the outcomes of the allegations of corruption and unethical conduct; and”
“(e) refer allegations of corruption to the relevant law enforcement agency and investigate whether disciplinary steps must be taken against any employee of the department and if so, institute such disciplinary action.”
These functions inform the implementation of lifestyle audits, as it implies the following:
- That lifestyle audits be conducted as part of a department’s system of risk management.
- That lifestyle audits be addressed in the ethics management strategy.
- That a reporting system (whistle-blowing system) be developed which allows for “tip-offs” on suspected activities that may explain the lifestyle of Public Service employees.
In terms of PSR, 2016, “an employee shall-
13(e) immediately report to the relevant authorities, fraud, corruption, nepotism, maladministration and any other act which constitutes a contravention of any law (including, but not limited to, a criminal offence) or which is prejudicial to the interest of the public, which comes to his or her attention during the course of his or her employment in the public service;”
“14(q) shall immediately report any non-compliance of the Act to the head of department.”
- That information regarding corruption and unethical conduct be coordinated (on National and Provincial levels) to form a single information system that will inform a department of its ethics risks and to enable it to monitor and assess recorded cases of corruption and unethical conduct.
This requires the cooperation of a number of role-players to collate all information related to ethics and corruption, in order to inform the risk management approach and strategy, including that for lifestyle audits.
- That corruption identified during lifestyle audits be referred, investigated and be acted on. In terms of PSR, 2016, the head of department shall – 22(e) “refer allegations of corruption to the relevant law enforcement agency and investigate whether disciplinary steps must be taken against any employee of the department and if so, institute such disciplinary action.”
Section 34 of the Prevention and Combating of Corrupt Activities Act, 2004 (Act 12 of 2004) requires a person holding a position of authority (including SMS members), who knows or ought to reasonably have known or suspect that any person,
(a) has committed an offence regarding PRECCA; or
(b) the offence of theft, fraud, extortion, forgery or uttering an forged document; and
(c) which involves an amount of R 100 000 or more, must report such knowledge or suspicion or cause it to be reported to the Directorate for Priority Crime Investigations (DPCI).
Section 15 (5) of the Public Administration Management Act, 2014 (PAMA) stipulates that:
- When an institution discovers an act of corruption, such corruption must immediately be reported to the police for investigation in terms of any applicable law, including the Prevention and Combating of Corrupt Activities Act, 2004 (Act 12 of 2000).
- Issues of misconduct emanating from criminal investigations must be reported to the Unit (the Public Administration Ethics, Integrity and Disciplinary Technical Assistance Unit – PAEIDTAU) and the relevant head of institution for initiation and institution of disciplinary proceedings.
Section 15 (6) of PAMA says:
- The head of the institution must report to the Unit on steps taken in respect of subsection (5)(b).
In order to form a holistic picture on corruption and unethical conduct in the Public Service, information obtained through departmental information systems must be shared with the PAEIDTAU.
Apart from section 15 of the PAMA, the Public Service Act, 1994, section 16A(2), further stipulates that:
“A head of department shall-
(a) Immediately take appropriate disciplinary steps against an employee of the department who does not comply with a provision of this Act or a regulation, determination or directive made hereunder;
(b) Immediately report to the Director-General: Public Service and Administration the particulars of such non-compliance; and
(c) As soon as possible report to that Director-General the particulars of disciplinary steps taken.”
By adopting lifestyle audits, greater transparency is obtained in the Public Service. This is a powerful deterrent against unethical and criminal behaviour, as it reminds Public Service employees that their behaviour is subject to scrutiny, as the Constitution of the Republic of South Africa, Act 108 of 1996, Section 195 requires that a “high standard of professional ethics must be promoted and maintained”.
With the implementation of the PAMA, and relevant regulations, lifestyle audits will be extended to the employees of the municipalities. In this way, the lifestyle audits will assist the Public Administration to undergo renewal, inspiring its employees towards higher levels of ethics and integrity as demanded by the Constitution.