Program Director
Members of the Executive Council
Mr. Jaco de Jager, CEO of the Association of Certified Fraud Examiners (SA)
Our strategic partners FNB, Vodacom and JGL
Representatives of the financial services industry and sector organisations;
Heads of Departments present here
Senior government officials
Ladies and Gentlemen
Introduction
I am honoured and privileged to welcome you to the International Fraud Awareness Seminar. We are indeed proud to host you here in Midrand today. This event forms part of the International Fraud Awareness Week, an initiative of the Association of Certified Fraud Examiners, which runs from the 12th to the 17th of this month.
We are gathered here today exactly a week after more than 1 900 delegates from 140 countries convened in Brasilia, the capital city of Brazil for the 15th International Anti-Corruption Conference. In the Brasilia Declaration that was released at the end of the conference, the delegates referred to corruption as “one of the most pressing issues of our time”. They therefore declared that: “now more than ever we must bring corruption fighters together to create a more focused effort against the abuse of entrusted power”.
This meeting is also taking place three weeks before the International Anti-Corruption Day, when the global community will focus on initiatives to combat corruption. This day is observed annually on the 9th of December in honour of the United Nations Convention Against Corruption (UNCAC) which was signed in 2003, in Mexico. On this day, recognition is given to the essential global leadership provided at the signing of the Convention where ninety-five countries took the anti-corruption pledge. These have since been joined by forty-two more signatories, bringing the total to hundred and thirty-seven nations. South Africa is of course also a signatory to the convention.
As the Gauteng Provincial Treasury and indeed the entire Gauteng Provincial Government (GPG), we are fully behind all these initiatives and our participation even in this one happening today, demonstrates our commitment to root out fraud and corruption and protect the public image and resources of the state.
Today’s gathering brings together delegates from all government tiers, professional bodies and representatives of the financial services industry in particular banking and sector organisations. This augurs well for our on-going efforts to fight against fraud and corruption.
This is because international research has proven that fraud is prevalent both in the public and private sector. As a result organisations around the world lose an estimated 5% of their annual revenue to fraud. We are in this together, that is why there is a need for the public and private sector to work very closely to develop and implement strategies aimed at combating this challenge.
In this context it is important that the outcome of this Seminar should be an outline of measures that we will undertake jointly as government, nongovernmental and the private sector to practically create awareness, detect and prevent incidents of fraud and corruption in our organisations. We need to urgently work to prevent those who operate with impunity to continue to pillage the resources that we could have used to facilitate growth and development in this country and beyond.
Fraud and corruption in GPG
Data from the Public Service Commission shows that historically Gauteng accounts for the majority of the cases of alleged fraud and corruption reported through the National Anti-Corruption Hotline. This trend could be attributed to, amongst other things, awareness campaigns that lead to the increased in reported cases.
In the period April to September a total of 42 cases of alleged fraud and corruption in Gauteng were received from the National Anti-Corruption Hotline; 30 of these cases were reported in the second quarter.
During this period no cases of (allegations/ reports) were received for Gauteng Economic Development, Gauteng Department of Sport, Arts, Culture and Recreation, Gauteng Department of Finance, Gauteng Department of Transport and Office of the Premier.
Out of the total number of all cases received, seven were received in respect of municipalities. The categories of the cases received ranged from corruption with sixteen cases; seven cases related to fraud; procurement irregularities had six cases. A total of four cases were with regards to misappropriation of funds, another four for unethical behaviour, three cases of reckless driving were reported, one case for appointment irregularities and another case for theft.
These cases are being investigated and action must be taken against those who will be found guilty, even if people need to be criminally charged and prosecuted. This will send a strong message that fraud and corruption will not be tolerated under any circumstances, no matter the status and position of the person involved. As we have said before, we must go after those who operate with impunity and pillage the resources of the state.
Intensify the fight against fraud and corruption
The Gauteng Provincial Government is committed to dealing decisively with fraud and corruption. Our work in this regard is guided by the Gauteng Anti-Corruption Strategic Framework. The purpose of this framework is to have an approach that is holistic, integrative and pragmatic enough to enhance government’s efforts in intensifying the fight against crime and corruption Gauteng-wide.
This strategy applies to all unethical conduct, fraud, corruption, or suspected irregularities of this nature involving the following persons or entities: political principals; all employees and officials and municipalities; consultants, suppliers, contractors and other providers of goods or service and non-governmental organisations and Agencies and other parties receiving benefits from Gauteng Provincial Government.
In order to address lack of investigative capacity within departments (to facilitate improved case resolution), we are providing investigation training to the officials responsible for investigating the cases of alleged corruption emanating from the National Anti-Corruption Hotline for GPG departments.
There are on-going plans to organise advanced investigation training for 70 officials across GPG departments. This is intended to, amongst others, provide the principles / procedures of forensic investigation and establish in-depth knowledge of specific investigation techniques and methods. Our view is that this will assist to eliminate backlog and increase the rate of case resolution in the Province.
As indicated by Premier Nomvula Mokonyane during the 2012 State of the Province Address, fraud and corruption by its nature undermines effective service delivery. Through the diligent work of employees and the public, the Gauteng Provincial Government has unearthed over 150 cases of alleged fraud and corruption ranging from procurement irregularities and financial misconduct to fraud and theft of medication and food supplies. A single repository for the province has been established to manage the investigation and closure of internal corruption cases.
We all agree that prevention is better than cure. In order to promote ethical behaviour in the workplace and to educate GPG employees and the public at large about the anti-fraud and corruption regulatory framework in a manner that will improve rapid and effective response to cases, the Office of the Premier is fast tracking implementation of the Gauteng Anti-Corruption Communication Strategy. This includes printing and distribution of the Code of Conduct leaflets, anti-corruption posters, Whistle-blowing Policy Booklets. The Anti-Corruption and Ethics Workshops for Anti-Corruption Practitioners are also being arranged.
There are 24 trained Ethics Officers from across GPG departments. The Office of the Premier sourced Ethics Institute of South Africa in the last financial year to conduct Ethics Officer Training to the selected officials from across the Gauteng Provincial Government departments. These officials are responsible for implementing Ethics and Anti-Corruption programmes.
Provincial Anti-Corruption Coordinating Committee (PACCC) and Intergovernmental Anti-Corruption Workshops hosted to support departments and municipalities to improve minimum anti-corruption capacity; development of sectoral strategies; training of investigators and anti-corruption personnel; monitoring of Fraud Prevention Plans and provision of guidance on ethics management.
We are also aware that there is more work to be done. It is for this reason that we are intensifying our fight against corruption by also prioritising the following:
- Lack of proper management systems to monitor or deal with corruption e.g. nepotism both in the local government institutions and the provincial government departments.
- Staff’s lack of knowledge and awareness about corruption and its manifestations.
- Individual units not working as teams across departments and municipalities.
- Lack of cooperation with other sectors - business and civil society.
- Departments do not have capacity to deal effectively with cases referred from the National Anti-Corruption Hotline.
Furthermore, the Gauteng Provincial Treasury was re-established in April this year to improve efficiencies in the process of procuring goods and services, and avoid unauthorised and irregular expenditure. The focus is on supply chain management because fraud and corruption manifests itself primarily in procurement processes.
In this regard we have, amongst other things, engaged the State Security Agency to conduct security clearance on all Supply Chain Management officials in the province. This process is already underway and officials in Department of Community Safety, Department of Economic Development, Office of the Premier, Gauteng Provincial Treasury, Gauteng Department of Finance, Gauteng Department of Agriculture Rural Development and the Gauteng Department of Sports, Arts, Culture and Recreation have already been vetted.
Therefore our message as the Gauteng Provincial Government is that we simply cannot allow individuals to plunder public resources because this impacts negatively on service delivery. That is why when this term of government started in 2009 the fight against fraud and corruption became a policy issue when it formed one of our key strategic priorities.
In this context, therefore, partnering with the private sector sends out a clear message that fraud and corruption will not be tolerated anywhere in this province. It underscores the message that we speak with one voice and say Enough and No More!
Let me take this opportunity to wish you well in your deliberations today.
Thank you.
