A. Background
The Public Service Commission (PSC) has since the 2001/02 financial year, been monitoring financial misconduct reported to it by departments, and on an annual basis produces an oversight report on financial misconduct in the Public Service. Accordingly, the PSC has compiled an overview on Financial Misconduct for the 2008/09 financial period and provides statistical overview and brief trend analysis of financial misconduct cases reported to the PSC by national and provincial departments during the mentioned period.
B. Key findings
1. Reports from departments
National departments
a. All national and provincial departments submitted reports on their finalised financial misconduct cases for the 2008/09 financial year.
b. Of the 35 national departments, 12 indicated that they had no financial misconduct cases for the financial year.
Provincial departments
c. All 110 provincial departments submitted financial misconduct reports to the PSC. Of the 110, 43 provincial departments indicated that they had no financial misconduct cases for the financial year.
2. The number of employees charged with financial misconduct
a. A total number of 1 204 cases of financial misconduct were reported for the 2008/09 financial year.
b. A total of 260 (22%) financial misconduct cases were reported by the national departments. Whilst 944 (78%) cases were reported by provincial departments. This trend is comparable to the employee demographics of the Public Service as the provinces employ about 80% of the public servants.
c. Of the 260 cases reported by national departments, the Department of Justice and Constitutional Development reported the highest number of cases (121), followed by the Department of Home Affairs (22).
d. Of the 944 cases of financial misconduct reported by provincial departments, KZN reported the highest number of cases (258), representing 27.43% of the total number of cases reported by provinces. This was closely followed by Limpopo province with 255 cases reported. Whilst Mpumalanga and Eastern Cape provinces reported the least number of cases, namely 33 and 21 respectively.
3. Types of financial misconduct reported
a. The PSC found that cases in the category “fraud” comprise a significant portion (53%) of the overall number of cases reported and they involve amongst others, social grant fraud, subsistence and travel claim fraud, capturing fraudulent transactions and petty cash fraud. Furthermore, cases in the category “theft” compromise the second highest number of cases (15%) and these cases relate to the theft of laptops, petrol, state funds and food items.
4. Levels of employees charged with financial misconduct
a. The report reveals that financial misconduct prevails at all levels in the Public Service, although the highest number of cases reported involved employees at salary levels 3 and 4. A total of 107 employees on salary level 3 and 128 employees on salary level 4 were charged with financial misconduct. b. In relation to members at the Senior Management Service (SMS) level, a total of 19 employees on salary level 13 were charged with financial misconduct, whilst 5 employees on salary level 14 and 16 employees on salary level 15 were also charged with financial misconduct. No cases of financial misconduct were reported to the PSC on salary level 16.
5. Gender of employees charged with misconduct
a. Of the 1 204 financial misconduct cases reported, four of them did not indicate the gender of the officials involved. The report also reveals that of the remaining 1 200 cases, financial misconduct was committed by males in 35% of the reported cases and 65% females respectively. Furthermore, the majority of the reported cases involving female employees were about social grant fraud.
6. Outcome of financial misconduct cases
a. Of the 1 204 financial misconduct cases reported, the PSC found that 86% (1 037) of employees were found guilty. This points to the fact that once an employee is charged with misconduct, departments are able to successfully prove the allegations made against the employees. The Report further shows that 6% (74) of the financial misconduct cases against the employees were withdrawn whilst in 4% (53) of the cases, employees were not found guilty.
b. In only 2% (17) of the cases, employees resigned following charges of financial misconduct being presented against them.
7. Sanctions imposed in cases of financial misconduct
a. The most prevalent sanction imposed upon a finding of guilty was that of final written warnings (36%), followed by a combination of sanctions (23%). A combination of sanctions means those cases where the chair of the disciplinary hearing pronounced a combination of sanctions as provided for in clause 7.4(a)(v) of the Disciplinary Code and Procedures, e.g. a final written warning together with suspension without pay.
8. Cost of financial misconduct
a. The report reveals that the total cost reported by national and provincial departments emanating from unauthorised, irregular, fruitless and wasteful expenditure as well as losses resulting from criminal conduct reported in respect of the 2008/09 financial year was R100 111 076.82.
b. During the same period, an amount of R9 946 013.83 (9.9% of the total cost) was recovered from the employees found guilty of financial misconduct or the financial misconduct did not result in any loss to the State. An example case where financial misconduct did not result in any loss to the State is where the attempt to defraud the State was detected timeously.
9. Criminal proceedings instituted against employees charged with financial misconduct
a. For the 2008/09 financial year, criminal proceedings were instituted against employees in 390 (32%) of the cases.
b. In 529 (44%) of the finalised cases for the financial year 2008/09, no criminal proceedings were instituted against employees.
c. Similarly, in 273 (23%) of the cases, departments failed to provide any indication whether criminal or any other proceedings were instituted against employees charged with financial misconduct. In 12 (1%) cases, departments indicated that all criminal proceedings were not applicable.
C. Conclusion
The analysis contained in this report provides comprehensive detail on the level of financial misconduct during the 2008/09 financial year and should provide valuable information for oversight purposes as well as to address emerging trends. The Public Service is accountable to its citizenry on the use of public funds. When large amount of public funds are squandered by untrustworthy public servants, it impacts on the image of the Public Service and the trust relationship between government and the citizens. Public Service managers should ensure that they are knowledgeable of the legislation, internal policies and procedures relating to their sphere of work. This will enable managers to detect potential fraud or any other form of financial misconduct timeously and take corrective action.
For enquiries, please contact:
Mr Humphrey Ramafoko (Director: Communication and Information Service)
Tel: 012 352 1196
Cell: 082 782 1730
E-mail: humpreyr@opsc.gov.za
Mr Ricardo Mahlakanya (Deputy Director: External Communication)
Tel: 012 352 1070
Cell: 073 483 7846
E-mail: RicardoM@opsc.gov.za
