RISK MANAGEMENT AND ANTI-CORRUPTION LEARNING

WORKSHOP

01 JULY 2003

DEAT ‘s APPROACH

PROCESSES

EXPERIENCES AND COMPLIANCE

New in public sector and in private sectorNo benchmarking in governmentEngagement of consultants (repetitions and include

irrelevant areas)Models not compatible to government (RM)

DIVERSITY ABOUT THE DEAT

DEAT HAS FOUR BRANCHES (Headed by 4 DDGs)

they are:

Biodiversity and Conservation

Environmental Management

Marine and Coastal Management (MCM)

TourismCorporate Affairs

BACKGROUND ABOUT DEAT (CONTINUED)

DEAT HAS SIX PUBLIC ENTITIES UNDER ITS CONTROL

MARINE LIVING RESOURCE FUND (MLRF, under MCM Branch)

GREATER ST LUCIA AND WETLANDS

JOWSCO (has since from 31 March 2003 been

winding- up)

ACCOUNTABILITY MILESTONES

INTERNAL AUDITGoverned by

THE ACCOUNTING OFFICER

AUDIT COMMITTEE(Governed by

an Audit Com. Charter andChaired by an

Independent person to the organisation)REPORT

REPORT

DIRECT ACCESSTO BOTH

(i.e. communication)

Sec , 77 of PFMA, TR and the Audit Standards i.e. of IIA

FRAMEWORK OF DEAT APPROACH

PFMA, Act 1 of 1999 AND TREASURY REGULATIONS (as amended) COMPLIANCE DRIVEN

Milestones:CFO ‘s APPOINTMENT - in Year 2000

RISK MANAGEMENT1st Risk Assessment (RA)done in year 2000Approved by the Audit Committee and by managementThe risk assessment was the pillar of the businessoperations of the internalaudit division (i.e. the Internal Audit

1st RA was done with the assistance of consultantsThe approach was inthe form of a workshop, attendedby all/most senior managers of DEAT.

TURN - AROUND BY DEAT WITH REGARD TO RISK MANAGEMENT AND ANTI-CORRUPTION/FRAUD

INITIATIVES

CFO ‘SOFFICE

D: Proc

Sub D: RM&

PE’s

D: FM

RISK MANAGEMENT (CONTINUED)• Sub - D: RM & PE’s is now tasked with all risk

management responsibilities in consultation with the Internal Audit Division for DEAT, and reports to the CFO

• RA Update (as follows)

Managers ‘s confirmations with regard to the captured risks.

Report ‘s approval by DG for implementation

Risk management incorporated in

performance contracts

of managers

Risk Assessment 2nd done with theassistance of a Consortium

through interviews

RISK MANAGEMENT (CONTINUED)

Risk Assessment Review/update

Risk Management Committee (RMC)

(guided by a charter)

Risk Management Strategy/update

RMC Self Assessment(performance and compliance standards)

DEVELOPMENT OF POLICIES

• TO COMPLEMENT THE DISCHARGING OF RISK MANAGEMENT RESPONSIBILITIES

• AS MEASURES OF MITIGATION OF RISKS• TRANSFERING OF RISKS, e.g. Cellphone

Policy,• STRENGTHENING CONTROLS

FRAUD PREVENTION INITIATIVES

EXPERIENCES AND COMPLIANCE

New development in public sector No benchmarking in governmentEngagement of consultantsRisk based (including the fishing sector/industry,

under MCM regulation/control/monitoring)

AS PER THE FRAUD PREVENTION PLAN (FPP)

The CFO was appointed as the Fraud Risk Manager

Adding to that, a Fraud Risk Committee was established

Fraud Prevention Implementation Plan was developed based on the key initiatives identified in the FPP. One of the key initiatives was the “Tip-off” reporting hotline facility

HOW TO MAKE A “TIP-OFF”

USE• Telephone (free)

• Fax• Mail• E-mail • and internet

WHY OUTSOURCE IT?

• Managed by focused service provider as principal business

• Objective and independent• Less risk of victimisation• Access to skilled call receptionists and

sophisticated technology, etc

BENEFITS OF “TIP-OFF” FACILITY

• Strong deterrent yet simple and cost effective

• Protection from negative publicity (employees trust for the facility makes it a first option to the alternative – the media)

• Promotes culture of honesty and integrity in a very easy way

BENEFITS (CONTINUED)

• Tangible corporate governance initiative that promotes transparency and improves risk management responsibilities and weaknesses

• Ensures that state assets are used effectively, efficiently and economically

BACKGROUND: WHY “TIP-OFF” REPORTING HOTLINE FACILITY

• “The world is a dangerous place to live in, not because of the people who are evil, but because of the people who don’t do anything about it” - Albert Einstein

• This facility supports philosophy of whistle blowing• Improves the discovery of fraud and corruption at work• It is a demonstration of management ‘s commitment• It creates open culture where concerns are raised without fear

of victimisation• PFMA requirements are met• Secure measures against subpoena of information

EXPERIENCES (continued)

COMMUNICATIONS

INTERNALMinister ‘s Policy StatementMarketing strategy with D: ComSystems (on payslips)NewsletterTraining (Induction Programmes)

EXTERNALFishing Industry: Initially very negative(Malicious allegations and accusations fo the allocation of fishing rights)

Tourism sector: Provinces

FROM “TIP-OFFS” REPORTS

• A report is generated by the service provider• Furnished to the Department• Scrutinised: i.e. to evaluate if the “tip-off” is

not a hoax or malicious allegation (I.e. establish evidence)

• Investigation• Report issued to the DG• Disciplinary actions/sanctions as per LR

directive or recommendation

EXPERIENCES AND FUTURE PLAN

STAKEHOLDERS

TO HAVE THE ULTIMATE BENEFIT ACHIEVED, AND TO THE BENEFIT OF STATE,

STRONG PARTNERSHIP WITH OTHERS, e.g.PSC, DPSA, TR, NPA, and others

THOUGHTS AROUND……….

• RiskAssessment the solution?• Is the establishment of “Tips-offs” reporting

hotlines the ultimate solution?• Every Department having its own “hotline”

the R---- factor!!!!!!!!!!

SUCCESS OF OUR “TIP-OFF” FACILITY

395 reportsTotal reports

MARKETING INFORMATION

Caller became aware of “tip-off” from:

Colleague 1Newsletter 7Newspaper 28Other 43Poster 11Radio 1

SUCCESS OF OUR “TIP-OFF” FACILITYOFFENCE CATEGORY No of “Tip-offs”

calls

ALLEGED ILLEGAL ACTIVITIES CRIMINAL 1

COMPLAINT ENQUIRY 7

COMPLAINT TREATMENT ENQUIRY 1

CONCERN HUMAN RESOURCE 9

GRIEVENCE HUMAN RESOURCE 1

POACHING CRIMINAL 8

REPORT HUMAN RESOURCE 1

REQUEST HUMAN RESOURCE 3

REQUEST TO BE CONTCTED HUMAN RESOURCE 1

SUGGESTION HUMAN RESOURCE 1

SUSPICIOUS BEHAVIOUR CRIMINAL 1

UNETHICAL BEHAVIOUR CRIMINAL 57

Total 91

WHERE TO GET THE RELEVANT INFORMATION…….

• FROM OTHER DEPARTMENTS• AND THE FOLLOWING WEB-SITES:

www.treasury.nsw.gov.auwww.mpa.co.ukwww.bvpps.audit-commission.gov.ukwww.norad.nowww.glasgow.gov.ukwww.osa.state.nc.uswww.icac.nsw.gov.au/