SELECTED FINDINGS OF THE FIRST PUBLIC SECTOR SURVEY             Nine out of every ten persons questioned, positively state that they see fraud in the public sector as a major problem. In the various spheres of government, local government displayed the lowest fraud awareness factor (3.37) as compared to the highest level (3.75) in national government. A high fraud awareness factor normally results in relatively lower fraud occurrences. This supposition is supported by the data relating to the North West province. North West province has the highest fraud awareness factor (3.94) and also the lowest fraud occurrence factor. Departments are consequently advised to improve their fraud awareness levels as a first step in combating fraud. Respondents indicated that they have not experienced a significant change in the fraud awareness factors in their surroundings. They do, however, expect a relatively significant decrease in fraud occurrences in the year ahead. 60 percent of respondents are aware of fraud cases that occurred in their organisations. Fraud occurrences rise as the size of the organisation increases (large organisations have the highest level of fraud occurrences). Weak (or lack of proper) internal controls are seen as the most influential factor in creating a fraudulent environment. Bad management and lenient penalties are also seen to contribute significantly. Factors which are seen to not contribute substantially are: high work loads; i nadequate legislation and socio economic imbalances. There is a marked difference between the way in which the various governments view the contribution of low salaries towards fraud. Whilst national governments rate this as the factor contributing most towards a fraudulent environment, local governments rate this factor's contribution relatively low. Employee fraud represents the main fraud category, (making up almost 50%) followed by fraud by outsiders and lastly management fraud (20%). The research indicates the existence of different fraud profiles in the various provinces – a factor which should be incorporated in a successful fraud prevention strategy. Bribes and inventory theft are the most common types of employee fraud. The problem of "bribes" stands out in local authorities, larger organizations and the provinces of North West, Limpopo and Mpumalanga. Of all categories only one ranking exceeds the factor of 10, namely bribes in North West. The study identifies the category of "time fraud" (people not working a full days' work) as being a major fraud category amongst both employees and management. This aspect does not feature significantly in other studies conducted world-wide. The relative low ratings of wage fraud and salary fraud indicate that both management and other employees do not rate this as a big problem, thereby indicating that current systems are minimizing risks in this regard. Other relatively low ranked (management) fraud problems are asset theft and cheque fraud. These findings differ substantially from findings of private sector studies where theft of monetary and physical assets represent up to 80% of fraud losses. Dishonest acts such as changing of information, procurements fraud and misrepresentations rank high in the category of fraud by outsiders. The findings confirm the existence of blackmail. Although ranked in a lower position than most other types of fraud by outsiders, the seriousness of this crime merits special attention and strategies need to be designed to focus on this aspect. Whistle blowers play an important role in assisting organisations with the discovery of fraud. Internal control systems and internal audit are identified as the two major tools to prevent and to fight fraud. Apart from whistle blowers (number one position) internal control and internal audit are also seen as the major tools in detecting fraud. Internal audit plays a far more important role in fraud detection compared to external audit. It is only in the provinces where the role of the external auditor (Office of the Auditor-General) competes well with the internal audit components. The gap between the fraud detection role of internal and external auditors is largest amongst local authorities and public entities. In both these groups we find a more active involvement of Registered Accountants and Auditors (private sector auditors), with numerous public entities having private sector audit firms as their auditors. The external auditor's role in the discovery of fraud is rated higher in the public sector compared to the external auditor's role in this regard in the private sector. Organisations prefer internally orientated actions (internal investigations, disciplinary proceedings, etc.) to the involvement of outside parties (police, Auditor-General). The strongest actions to prevent fraud and to fight fraud, are internal controls; internal audit; Codes of Ethics and Fraud Prevention Plans. The research findings indicate that the Public Finance Management Act and related legislation is generally seen to have a substantial positive impact on the fight against fraud. The information gathered indicates that "inadequate legislation" is not a major factor contributing towards fraud. Participants hereby indicate that our country's legislation seem to be adequate in this regard. The perceived level of fraud in the public sector is 23% higher than in the private sector. No single category indicated that the private sector fraud level was higher than the public sector's. Fraud is seen by both private and public sector as a very serious aspect. The problem of fraud is viewed more seriously in the public sector, however the private sector is expecting a larger i ncrease in the occurrence of fraud. This seems to indicate a stance that fraud levels in the public sector cannot rise above the levels currently experienced. On average eighty percent of the respondents indicated that they did not receive training in respect of the department's fraud prevention plan. The lack of training also extends to other aspects such as the new Public Finance Management Act.
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