Financial Disclosure 2014/15 compliance: Public Service Commission briefing; Ethics and Integrity Management in public service

Meeting report

Ethics Management: Department of Public Service and Administration (DPSA) briefing
Mr Mashwahle Diphofa, Director General, Department of Public Service and Administration noted that this briefing was a follow up and update to the presentation done the previous year, which had focused on legislative processes and measures put in place, the existing ethics management measures and the public service integrity management framework. He would cover the ongoing monitoring of the submission rate of the financial disclosure forms by members of the public service. He noted that the compliance was not yet 100%. There were still some public servants who performed other remunerative work without obtaining the necessary permission. He also noted that there was sometimes inadequate institutional capacity to deal with unethical conduct and corruption.

According to the report of the Auditor General, the supply management procedures and processes were not always adhered to and there were inconsistencies in application of disciplinary measures.

The issue of gift acceptance was also highlighted. The Department observed an inconsistency in the public service regulations as regards collection of gifts by public servants. Financial disclosure was only an obligation on senior managers. Officials below level 13 in the public service were not required to make financial disclosures.

To address the issues listed in the observations, the DPSA had come up with some amendments to the Public service regulations. He listed these recommendations as follows:

- Public employees should be prohibited from conducting business with any organ of the Sate or from holding the position of Director in any public or private company which conducted business with an organ of the State.
- Specific provisions should be included on the obligations of employees who have been granted permission to do outside remunerative work
- Because the regulations on financial disclosures had, up until now, applied only to members of the Senior Management Service (SMS), the proposal was now to expand the definition of “designated employees” to allow the DPSA to determine employees or categories of employees to whom these provisions applied
- The Head of Department (HOD) would be obliged to keep a register of disclosures of such designated non-SMS members.
- Previously it was not required that employees declare motor vehicles, but the new amendment proposed that this would now be compulsory
- A procedure would be set out for the verification of the interests disclosed, and, in case of conflict and reporting, what steps must be taken.

To tackle corruption, an entirely new set of rules had been set which seek to place certain anti-corruption functions on a HOD. These functions included analysing corruption risks, developing and implementing an anti-corruption plan, establishment of systems that allowed employees to report corruption, referring allegations of corruption to relevant law enforcement authorities, and setting up educational and awareness programmes.

The proposed Anti-Corruption Bill would also require executive authorities to designate ethics officers to promote integrity and ethical behavior, assist employees on ethical matters and identify and report unethical behavior and corrupt activities.

In terms of the E- disclosure system, the current provisions allowed the submission of forms manually but the new proposed amendment sought to make the submission of financial disclosure forms electronically. The E-disclosure system was faster and more convenient and it was directly linked to the company registration database. The system was linked to the bid register so that the scrutiny process would become easier and employees would be encouraged to embrace this new system.

The usage of the E-disclosure system had been encouraging so far. Statistics indicated that the number of SMS who used the system in their disclosures as at 30 April 2015 was about 7 576 which was 73% representation. It compliance level should increase if it is made compulsory.

The DPSA had been providing implementation support, giving technical assistance, training and awareness on the framework since 2014/15. One-on-one sessions had been held with necessary government agencies such as the Department of Public Works, the National Prosecuting Authority, Special Investigating Unit and the Office of the Chief Justice.

The implementation support provided ranged through hosting of internal workshops, assistance with framework, development of training materials and development on ethics for new recruits, organisational development of ethics infrastructure. These were ongoing.

Technical assistance was being given to develop toolkits which addressed the issues of the ethics management plan and ethics risk assessments. Technical assistance was also provided in developing guidance spelling out managing other remunerative work performed outside the public service, guidelines on managing gifts and other benefits in the public service, and guidelines on managing ethics in the public service.

In conjunction with the National School of Government, training materials on ethics management had been developed .These materials are used in various forms of trainings on ethics management. The first training was conducted in August 2015. In relation to anti-corruption, training courses were developed and anti-corruption training was provided to 5 342 anti- corruption practitioners and public servants.

Support structures were also created.  The National Ethics Officer Forum was created as a new role to provide a platform for interaction and exchange of knowledge. The focus was to strengthen capacity of practitioners to implement anti-corruption and ethics management strategies and policies.

The adoption of a multi-agency approach, coordinated by the anti-corruption task team and supported by comprehensive anti-corruption architecture, was being done. The objective was to build a transparent and accountable public sector that is ethical and gives effect to the anti-corruption agenda of the government.

The Public Sector Anti-Corruption Working Group aims to develop a public sector anti-corruption strategy, develop a system to support investigations and discipline management. It would collaborate with civil society and business to forge beneficial strategies to prevent and combat corruption. Capacity in the public sector would be strengthened by establishing a learning network, broadening the knowledge base of practitioners and improving the general ethics of employees. It would finally coordinate South Africa’s international obligations pertaining to anti-corruption work.

The DPSA conducted surveys, and the baseline was to test the effectiveness of policies and measures and the assessment of the impact on the ethical culture of the public service. The DPSA, SA Local Government Association (SALGA) and Department of Cooperative Governance undertook two phases of surveys. One was a focus group and the second an online survey. The online survey closed 21 August and the analysis was being done by EthicsSA.

The results of the survey showed a participation level of 41.4% in national government, 40.9% in provincial government, and 17.8% in local government municipalities.

Discussion
The Chairperson commended the DPSA for implementing the recommendations of the Portfolio Committee. She tried to draw a line of distinction between ethics and etiquette. She was particularly impressed with the provisions of the Code of Conduct which prohibited public servants from doing business with organs of state but noticed the non-implementation of this provision and asked the DSPA to do something about it. She also felt that disclosure of motor vehicles was necessary. There were cases where vehicles had been exchanged as bribes, and some individuals were keeping large fleets.

The Chairperson also made mention of the anti-corruption unit that had been established nationally and the recommendation that every organisation should appoint an ethics officer. She pointed out the importance of appointing people with unquestionable character, stressing that whoever be appointed into these positions should be people with clean records.

She noted the comment on the ageing IT systems,and said that many people still preferred to do things manually rather than electronically, which might explain the 70% E-compliance. It must also be borne in mind that the remainder might be offline or have no access to the internet. She encouraged the usage of the system and proposed that in the next financial year the DPSA move towards full compliance.

Mr M Dirks (ANC) congratulated the Department on a job well done. He said it was very difficult to stamp out corruption from society, as people always find a way to get around the system. He wanted legislation to draw a strong line between what was and was not corrupt. He asked for the true definition of corruption, especially in the South African context, and was happy with the work done but did not believe the work being done could actually address the issue of corruption as yet.

A Member stated that the real issue was the huge perception that everyone in the public service is corrupt. He thought that perhaps an example should be made of the few who were. He believed the approach to the public service anti-corruption working group was a good one, but wanted clarity on who sat there.

Dr A Lovemore (DA) asked for clarity on the issue of executive authority, and thought that at one stage this was understood as the Minister only, but asked if the Minister could delegate executive powers.  Commenting on the National School of Governance (NSG), she was not sure about the content of the courses and the possibility of anyone attending courses on anti-corruption there. She noted the multi-agency approach to corruption, and asked if the programmes were available online; if not, she wondered why.

Dr Lovemore wanted more details on the implementation support structure, and for clarity on what the DPSA meant by saying that civil society and business will collaborate “to forge beneficial strategies”.
Referring to page 16 of the presentation, she asked how ethics could be measured. Finally, with regard to the ethical officer, she agreed with the Chairperson that such a person must have a high level security clearance and she asked if there was going to be just one ethical officer for an entire department, or a team working together.

The Deputy Director General: Ethics and Code of Conduct Management, DPSA, said that there was a social definition of corruption but the Department looked at the legal definition of corruption, which essentially described a misuse of a position to get something. Ethics in the public service was guided by the Public Service Regulations.

In relation to the anti-corruption taskforce, he stated the body was established to coordinate the activities of all agencies responsible for anti-corruption. It is chaired by the Director of Priority Crime Investigator. The Special Investigating Unit, the National Prosecuting Authority and the DPSA were all part of the team and once a month people would report on progress made, to the Chair of the taskforce.

The toolkits had been finalised and signed off by the Director General. The process of publishing the current regulations was happening.

He noted that the ethics programme was very practical, with relevant practical examples from the workplace being given, and then the code of conduct would be unpacked for the participants, so they really could understand what it meant to be a good public servant.

He noted that it would be up to each department to determine how many people it intended to designate as ethics officer.

The Chief Director: PSLM, DPSA, remarked that there were processes in place to ensure a smooth submission of E-disclosure. The submissions of the Chairperson were noted and would be looked into. The submission rate was based on the current infrastructure and maybe a reassessment was needed to determine if the people who did not use the E-disclosure system encountered any problems during submission.

Mr Diphofa clarified for Dr Lovemore that the executive authority would refer to the Minister, but another example would be the Chair of the Public Service Commission (PSC).

He felt that corruption could not be effectively fought without collaboration between the various agencies and civil society.

The Chairperson asked how the Department planned to involve local government.

Mr Diphofa commented that the Department was involved in corporate governance with the local government, and was providing training; he also noted that there were courses specially designed for Members of Parliament.

Dr Lovemore said that she would be particularly interested in attending such courses and would find out more. She also asked about accountability in the public service as a measure of ethics measurement.

The Deputy Director General responded by explaining how the survey was used in measuring ethical standards. People were assembled in a room and various issues were discussed. The results of the online survey were a reflection of the discussions.

Mr. Dirks observed that there were no checks and balance for members of the Parliament, the Municipal councillors and politicians in general. He was of the view that there were no ethical standards for MPs and this was a set back to the fight against corruption.

The Chairperson answered Mr Dirks by saying there was an Ethics Committee in place to check MPs and they were required by law to make a declaration of their properties and business issues, and she hoped that all Members here were doing so.

Compliance with the Financial Disclosure Framework  2014/201: Public Service Commission (PSC) briefing
A Commissioner from the Public Service Commission noted that the Financial Disclosure Framework (the Framework) required that members of the SMS in departments must disclose, to their respective Executive Authorities (EAs), particulars of all their regisitrable interests, by not later than 30 April each year. EAs must submit copies of the forms on which the designated employees disclosed their financial interests to the Public Service Commission not later than 31 May of each year for filing and scrutiny. If conflict of interest was identified in any disclosure, then a meeting would be scheduled with the official involved to clarify the issues. In cases where breaches were reported, then necessary disciplinary actions were taken. The purpose of the fact Sheet on the Financial Disclosure Framework is to monitor the compliance rate by providing a statistical analysis of the financial disclosure forms that were received by the PSC by the due date.

The Portfolio Committee had asked for a comprehensive report earlier on the level of compliance but the Public Service Commission was still putting it together. It was at an advanced stage and would be available in November; it would be presented then, so that this presentation would deal only with submission figures.

It was noted that in 2010/11 , the submission rate of financial disclosure was 68%. In 2011/12 there was a submission rate of 75%, 2012/13 stood at 84%, 2013/14 saw a slight increase to 85% and in the 2014/15 financial year, the disclosure rate was 79%, showing a slight decrease of 6% compliance when compared to the previous year.

As at 31 May 2015, the submission rate at the National Departments was 68% and the number of forms submitted via the E-disclosure platform was 3 784, with 63 manual submissions. At the Provincial level, the total submission rate was 95%, a total of 7 245 forms were submitted via E-disclosure and 551 were done manually. There were still a few challenges with the E-disclosure.

Some Departments did not submit their financial disclosure forms by the due date of 31 May 2015. At the National level, the non-compliant departments were Environmental Affairs, Correctional Services, Higher Education and Training, Human Settlements, Independent Police Investigative Directorate, National School of Government, Public Enterprises, Public Service and Administration, Sports and Recreation, Defence, Military Ombud, State Security Agency, Trade and Industry and National Treasury.

In the Free State, the Economic Development, Tourism and Environmental Affairs, and Education Departments did not submit their financial disclosure forms. In Gauteng, the Community Safety Department was non-compliant. The Royal Household Department at KwaZulu-Natal did not submit disclosure forms. In Limpopo, the Agriculture, Safety, Security and Liaison Departments did not submit their forms. In the North West, The Office of the Premier did not submit its disclosure forms.

Some Departments had been labelled as “repeat offenders” in the disclosure of financial forms. These departments had failed to submit their financial disclosure forms by the due date of 31 May, for two consecutive financial years. At the National level these were the Departments of Higher Education and Training, Human Settlements, National School of Government and Public Enterprise. The Royal Household at KwaZulu-Natal was also a repeat offender.

Seven departments submitted their financial disclosure forms by the due date of 31 May but did not achieve the required 100% submission rate.

Out of 45 Directors General of the national departments, only 35 submitted their financial disclosure forms by the due date of 30 April 2015 to their respective Executive Authorities. Out of these 35, 26 were submitted to the Public Service Commission by the stipulated date, with nine not received although the relevant DGs had submitted internally.  The Directors General of the Departments of  Art and Culture, Defence, Human Settlements, State Security Agency, Independent Police Investigative Directorate, Military Ombud and Women did not submit their financial disclosure forms at all.

Provincial Departments recorded an improvement of 20% in the submission of the financial disclosure forms at the due date for the last five years. 75% compliance was recorded during 2011 financial year while 95% compliance was recorded in the 2014/15 financial year. A breakdown of compliance by the provinces showed that out of a total number of 4 163 SMS members, 488 submitted their forms manually while 3 461 submitted via E-disclosure and 214 forms were outstanding. This showed a 95% submission rate via the E-disclosure. This was an indication that the E-disclosure system had been broadly accepted and more people were willing to submit their forms via this system.

PSC was concerned that there were still cases where SMS members submitted their financial disclosure forms on time but the EAs delayed in submitting the forms to the PSC. EAs were under an obligation to report on actions that have been taken against transgressors, and where no action has been taken, reasons must be provided to the PSC.

Discussion
The Chairperson is happy that there was a space for reminding the SMSs about the disclosure and submission of their forms but also wanted the PSC to demand they fulfill that requirement. She asked what method had been used by those submitting their forms late: manual or e-disclosure. She recommended that the challenges and gaps associated with the E-disclosure system be addressed so that everyone could embrace the E-disclosure system.

Ms R Lesoma (ANC) referred to the manual submissions of the financial declaration forms and asked if there were any reasons why the defaulters could not meet the target date of submission. She noted the compulsory declarations and asked whether collaboration with the EAs would achieve a total compliance. She recommended that, in its final report, the PSC must give a detailed reason for  instances of non-compliance so that the Committee could know who to hold responsible.

A Member asked if the PSC had looked into the low submission rates, and particular reasons for non-compliance by the Department of Arts and Culture. In regard to the obligation of the EAs to make reports against transgressors, he asked if it had already been implemented or would form part of the next presentation of the PSC.

Dr Lovemore wanted to know of any actions being taken against the serial offenders, whether action had been taken so far against anyone, and who was responsible for punishing such offenders.

The PSC Commissioner responded that the PSC would not make any forms of demand; if a senior manager did not submit his/her forms by the due date, it was regarded as a case of misconduct and the manager would be charged for it.

The Chairperson interjected by saying that actions had clearly not been taken against the serial offenders.

The Commissioner responded that the PSC had written to the EAs about those who had not complied. Most EAs had taken action and reported, and this would be indicated in the next report. Some EAs had not taken any action against offenders, hence the existence of serial offenders. The PSC had no power to make demands, and only the EAs could act.

The E-disclosure system had not been made compulsory but a lot of training had been conducted to train people on the use of the E-disclosure system, which should make it easier for them to submit their forms. Many people who submitted their disclosure forms manually attributed it to the fact that the system was difficult for them to use. However, it should be noted that there are no separate submission dates for manual or electronic submission.

The Commissioner noted that the Director General of the Department of Arts and Culture had been suspended, and dismissed from office. He thought that might have had a negative impact on the morale of the workers. Non-compliance would be dealt with in the overview report.

The Chairperson noted that the conclusions set out in slide 13 related to the work of the Minister. She expected a comprehensive report on what the Minister had done at the next meeting. She reiterated that E-disclosure was the way forward. The Committee wanted a briefing in the next presentation about the serial offenders and why they were not submitting either by computer or manually.

Report back on draft Committee reports
The Chairperson noted that the reports had been sent to Members and the Committee had met its deadline and complied. The recommendations of Members had been included in the report. This report had been adopted on the previous Wednesday so that the quorum today was not an issue.

Members noted that the programme would be forwarded electronically.

The meeting was adjourned.