ANTI - FRAUD AND CORRUPTION AWARENESS

SECURITY & INVESTIGATION SERVICES:

LEGAL FRAME WORK

• The Constitution of the RSA act 108 of 1996• Public Finance Management Act, 1999

To prevent material loss through criminal conduct, un-authorized, irregular, fruitless and wasteful expenditure.

• Treasury Regulations on PFMA provides that in relation to such allegations the following should take place:

LEGAL FRAME WORK

•Disciplinary hearing and that the outcome be reported to the Executive Authority, Department of Public Service and Administration as well as Public Service Commission•Public service act 103 of 1994 – promote co-ordination, better utilization of scarce human resources for cost effective service delivery

LEGAL FRAME WORKPrevention and Combating of Corrupt

Activities Act, 12 of 2004Obliges organisations to report all corruption

including incidents of fraud, theft,extortion and forgery.

Criminal Procedure Act 51 of 1977Deals with search, arrest, seizure, entering of premises, forfeiture, disposal of property connected with crime, appearance of the accused, use of force to affect arrest.

LEGAL FRAME WORK

• Public service Act,1994 chapt.7 Obligations, rights and privileges of officers and employees sec. 30(a)(b)(c) and 31(1)(a)(i)

• The Municipal Finance Management Act (MFMA), To secure sound and sustainable management of the financial affairs of municipalities and other institutions in the local sphere of government

OVERVIEW

• FRAUD AND CORRUPTION• DIFFERENCE BETWEEN THE TWO CONCEPTS • CONFLICT OF INTEREST• RECOGNISING CORRUPT ACTIVITIES• IMPACT OR COST OF CORRUPTION• PREVENTION OF FRAUD & CORRUPTION• GOVERNMENT STANCE

HOW DOES FRAUD DIFFER WITH CORRUPTION

CORRUPTIONCORRUPTIONFRAUDFRAUD

ABUSE OF POWER FOR

ILLEGAL GAIN OR PROFIT

UNLAWFUL AND INTENTIONAL MAKING

OF A MISPRESENTATION

WITH INTENT TO DECEIVE AND

DEFRAUDFRAUDSTER/CRIMINAL CORRUPTOR

FOR THE COMMISSION OR OMISSION OF AN ACT IN RELATION TO THE EXERCISE OF POWERS OR

PERFOMANCE OF DUTIES

CORRUPTEEACCEPTS

GIFTS/ BRIBES ANY

FORM OF GRATITUDE

PROCESS OF CORRUPTION

CORRUPTOR CORRUPTEE

UNLAWFUL - A PERSON-GIVE / OFFER - TO WHOM POWER

HAS BEEN CONFERRED -TO OFFICIAL - UNLAWFULLY-TO WHOM POWER - RECEIVE / OBTAIN HAS BEEN CONFERRED - A BENEFIT ILLEGALY-TO COMMIT & EXCESS - TO COMMIT AN ACT IN

FAVOUR OF CORRUPTOR-TO OMIT (NEGLECT DUTY)

Conflict of Interest

• A conflict of interest (COI) occurs when an individual or organization is involved in multiple interests, one of which could possibly corrupt the motivation for an act in the other.

PROCESS OF FRAUD

• EXAMPLES OF PROCUREMENT FRAUD SCHEME

- EMPLOYEES SIGNING OFF INFLATTED / FICTITIOUS /DUPLICATE INVOICES

- RECEIVING KICKBACKS / COMMISSIONS / BRIBES- CREATION OF FALSE AND OR DUMMY COMPANIES- AUTHORISING PAYMENTS ON SAID COMPANIES- RECEIVING GOODS AND OR SERVICES FOR PERSONAL USE

IN RETURN FOR LEGITIMATE BUSINESS.

RECOGNISING CORRUPT ACTIVITIES

• BRIBERY • FRAUD • EMBEZELLEMENT• ABUSE OF POWER• FAVOURITISM• NEPOTISM• CONFLICT OF INTEREST• BREACH OF TRUST

Common Types of Fraud / Corruption

• Misuse of vehicle • Payroll Fraud: Ghost workers• Fraudulent claims: km travelled /

SNT/overtime• Irregular appointments• Procurement

RECOGNISING CORRUPT ACTIVITIES cont.

• DESTROYING OF RECORDS/INFORMATION• MISUSE OR SELLING INFORMATION TO EXTERNAL

AGENTS• INDUCEMENT TO AWARD A TENDER• FAILURE TO REPORT CORRUPTION BY A PERSON

WHO HOLDS AUTHORITY• DIVULGING CLASSIFIED INFORMATION

IMPACT OF FRAUD AND CORRUPTION

• POOR SERVICE DELIVERY• UNEMPLOYMENT• LOW ECONOMIC DEVELOPMENT• LOW INVESTOR CONFIDENCE• POLITICAL INSTABILITY

PROACTIVE (INITIATIVE)

• POLICY DOCUMENT ON SPESIFIC TASK/ SERVICE • CODE OF CONDUCT• REPORTING FACILITY: NACH 0800 701 701• EFFECTIVE INTERNAL CONTROLS • EFFECTIVE INTERNAL AUDIT• PREVENTION OF CORRUPT ACTIVITIES ACT 12 OF 2004• PFMA AND TREASURY REGULATIONS

REACTIVE MEASURES

INVESTIGATIVE AND LEGAL TEAM• CRIMINAL AND DISCIPLINARY PROSECUTIONS• CIVIL PROSECUTION FOR LOSSES INCURRED BY

DEPARTMENT

Reporting fraud / corruption

• Any corrupt activity should to be reported to • NACH ( National Anti – Corruption Hotline)

National Toll free - 0800 701 701• Personal visit to Investigation offices

or call 015 298 7196• Director General @ 015 287 6273/6263• CFO 015 298 7107/8

THANK YOU

QUESTIONS?