Upload
sheila-flaxman
View
218
Download
0
Tags:
Embed Size (px)
Citation preview
CIFAL DURBAN
Ekurhuleni Metropolitan Municipality(EMM) Case Study
Presentation by: Harold Chiloane
Table of Contents
Background EMM Anti Corruption Strategy EMM Investigation Unit EMM Fraud Hotline Challenges Experienced Business Integrity Framework (Way Forward) Concluding Remarks
Background The Ekurhuleni Metropolitan Municipality
(EMM) Anti Corruption Strategy was developed and adopted by Council in April 2009.
The principles of the Local government Anti Corruption Strategy were considered.
The Strategy was developed as a framework and a building process to effect a series of interrelated steps.
EMM – Anti Corruption StrategyThe implementation steps are: Development of a Anti Fraud and Corruption Policy Development of Code of Conduct:
o Set up of register of Declaration of gifts, interests etc o Set up register for permission to conduct other
business o Set up a register of third party transactions (MFMA
requirement)o Register of non payment municipal accounts by
officials and Councillors Information session about Corporate Governance
EMM – Anti Corruption Strategy Strengthening of EMM disciplinary processes; Review of the Loss Control Committee’s scope
and function; Promoting hotline within the EMM; Introducing employee screening before
appointment Defining the Municipal Public Accounts
Committee’s role.
EMM Investigation UnitWe have a dedicated team responsible for Forensic audits, accounting and fraud investigations, Management of a Disclosure Service (Fraud Hotline) and management requests.
AUDIT AREA HOURSForensic Audit, Accounting and Fraud Investigation 12 000 Disclosure Service 2 000 Management Requests 2 000 Loss Control 2 000 Public Service Commission (PSC) reports 1 000 Disciplinary support etc 4 000 TOTAL 23 000
EMM Investigation UnitPlanned Capacity
Staff LevelAvailable
hours
Expected productivity
(%)
Expected productivity
(Hours) Employees
Total Productive
HoursManager 2 032 67% 1 361 1 1 361Supervisors 2 032 70% 1 422 2 2 845Internal Auditors 2 032 70% 1 422 8 11 379
11 15 585Total
EMM Investigation Unit
The following are the statistics of management requests, EMM Hotline and National Hotline received over the past five financial years:Financial Year Management
RequestEMM Hotline National Hotline
2007/2008: 45
2008/2009: 52
2009/2010: 58 18 1
2010/2011: 79 122 6
2011/2012: 42 110 7
EMM Investigation UnitSUCCESSESThe unit has investigated over 230 cases since 2007 involving allegations relating to the following irregularities: Unauthorised, Irregular and fruitless & wasteful
expenditure. Fraud & Corruption, Misconduct of staff and suppliers and Non Compliance to peremptory requirements of
various Acts and regulations, policies and procedures.
EMM Investigation UnitThe problems that are prevalent in the EMM are in the following areas:
Lack of Good Governance o Weak administration due to failure to adhere to Council
Resolutions, existing policies and legislation, inadequate administration, finance, HR & IT policies
Procurement processes o not being followed in SCMo Irregular awarding of tenderso Collusiono Conflict of interests
Financial Mismanagemento Payments made for service that have not been rendered
Service Deliveryo Failure to ensure that goods and/or service are delivered (no
monitoring)
EMM Investigation Unit We have established a working relations with agencies
like SIU and the Hawks There are a couple of high profile cases that the SIU is
assisting us with. The Hawks has recently arrested two former senior
officials and a local business man for tender fraud amounting to a R32 million. More successes in this regard are imminent.
AFU confiscated 8 properties, 27 luxury vehicles and 14 trucks.
There are some employees that were disciplined and found guilty of fraud and misconduct.
Fraud Hotline The approved EMM Anti-Corruption strategy makes
provision for the development and implementation of whistle blowing mechanism.
The service was established and it has been provided independently.
The Services are provided by BE HEARD - an independent service provider.
Fraud Hotline Enables stakeholders (employees, customers and
suppliers) to report unlawful and inappropriate activities anonymously and confidentially
Operates 24-hours a day 7 days a week Calls are answered in most of the official languages Each matter reported is given a reference number
and can follow up reports All calls are recorded and stored on a database Reports are sent to a designated person
Fraud Hotline
Contact channels FreeCall - 0800-102-201 E-mail – [email protected] Website – www.beheard.co.za MaxiCall fax – 0861-BEHEARD
Fraud Hotline
Fraud HotlineINTERNAL EMPLOYEE AWARENESS Launch November 2010 Information Pack with whistle, pamphlet and cell phone
sticker Laminated Posters on notice boards Ekurhuleni TODAY Electronic Bulletin Dedicated Page in the Corporate Internal Newsletter Place number on Ekurhuleni 2011 desk calendars Induction Welcome Pack – Include information Competition amongst employees to name the fraud character
(orange character) - Previous character was known as “Franky Fraud”
Fraud HotlineEXTERNAL COMMUNITY & CUSTOMER AWARENESS Launch at January 2011 Council Meeting Stickers reflecting number to be placed in municipal
accounts External newsletters Inclusion of the number in all educational material Ekurhuleni Website Place number on all external publications where applicable Perspex display holders for all Rates Hall & Licensing
enquiry desks. Flyers / Pamphlets
Fraud HotlineMARKETING E-Mail Signatures Corporate Stationary Templates to display
number Intranet and internet Strong Radio Campaign Pull-up Banners Promotional Items –Media Launch Billboards (2011 / 2012 Financial Year)
Fraud HotlineSERVICE STATISTIC Since the launch of the fraud hotline in 2010 have
received about 250 reports. The nature of incidents reported are:
o Theft and Tender Fraudo Complaints about call centre number not workingo Complaints about manager treating employees badlyo Unethical behaviouro Officers soliciting bribeso Illegal electricity connections
We are now experiencing backlogs in dealing with matters report.
Challenges Experienced Integration and coordination of Anti Corruption Strategies
(ACS) activities is challenge. Lack of monitoring and evaluation mechanisms Consultation process during the development of ACS was not
adequate Investigated matter are not processed on time:o Disciplinary caseso Prosecutionso Civil Litigation
Case management capacity due high volume of reported cases
Lack of Reporting of success stories.
Business Integrity framework EMM is currently developing a Governance
framework which include the development of the Business Integrity Framework.
The focus will be on the design of proactive measures to:o Identify fraud and corruption riskso Identify system weaknesses, and o How such areas should be managed proactively.
Business Integrity framework Elements that will be incorporated into the Business
Integrity Framework: o Fraud and Corruption Risk Management policy, o Fraud and Corruption prevention plan,o Fraud and Corruption response plan o Alignment to Local Government Anti Corruption Strategyo Other aspects of good corporate governance, ethics and
King III requirements. The diagram below depicts the process and gives
clear and concise visual aid to understand the aspects to be covered in the Business Integrity Framework.
Business Integrity framework
Concluding Remarks
Take aggressive action when fraud is discovered. Take action on people that do not act when fraud is
discovered Impose stiff penalties “thorough prosecution send a
strong message to employees” Need to raise awareness about the costs of corruption
for the country's political and economic development Create anti corruption agencies that will monitor state
organs on how the manage deal with fraud and corruption when it occures
Questions ?