Fraud fighter found fiddling

3 November 2012

The British Serious Fraud Office has been found out making an unauthorised payoff to a former chief executive.

The National Audit Office has criticised the SFO for a £422,000 package paid to the chief executive when she “unexpectedly resigned”. Her salary was £120,000 together with £27,000 for “benefits in kind” to cover commuting costs and accommodation costs. The irregular payment authorised by the then SFO Director, five days before leaving office, did not have the necessary approval of the Cabinet Office.

The incoming SFO Director asked the Treasury Solicitors Office to conduct an inquiry into the unjustified expenditure. The National Audit Office has now qualified the SFO accounts because due process was not followed in making these redundancy payment arrangements.

 

The BBC reports that the chairman of the Commons Public Accounts Committee was “astonished” that the SFO had agreed to the severance payment.

“The SFO showed a total disregard for taxpayers’ money when they wrote out a five-figure cheque … (and)  ignored Cabinet Office rules …”

 www.nao.org.uk/publications/press_notice_home/1213/sfo_2011-12.aspx

www.bbc.co.uk/news/uk-20169306

 

Tis distance lends enchantment

2 November 2012 

In Public Finance, a British magazine published yesterday, the deputy editor asks whether  there really are “… valuable lessons to be learnt from one of the world’s most remote countries – with a population roughly three times the size of Kent, and a government small enough to fit into one building in Wellington – on how to do public service reform?”

 She queries why the “…British political class seems genuinely convinced that in the land of The Lord of the Rings, The Hobbit and Sauvignon Blanc, the public service grass really is much greener; that Kiwis have discovered the secret elixir that has eluded UK governments: how to deliver public services more efficiently, at the same time as driving out costs.”

 The article reports  the fascination which Francis Maude, the UK Cabinet Office Minster,  seems to have with accountability arrangements between departmental chief executives in New Zealand and their Ministers.  He thinks this is where government gets more for less. She sees this as part of “public service envy” that regularly strikes Westminster.

Apparently the NZ Deputy Prime Minister when in Britain recently described a uniqueness of public sector reform in New Zealand was that the aspiration was to get more for less, using the Better Public Services model, not to make cuts that would just result on getting “less for less”.

The are currently three reputable research groups looking into the New Zealand model. The Institute for Government is trying to discover “…by what strange alchemy New Zealand is so ahead of the curve. (An adjacent issue is why so many UK policy initiatives – from welfare reform to pensions legislation – seem to have antipodean origins.) …”

 But the Institute says that “… it is important to dispel some myths. In the corridors of power, people often invoke the name of New Zealand, without really knowing or understanding what happened there.”

The IPPR, researching a range of “successful” administrations as part of the British Government’s accountability review, seems more  sceptical, suggesting foreign models  risk getting lost in translation. “…People like the contractual civil service model, because it all seems quite simple, in a Hobbit-like, good and evil way. But in practice, New Zealand’s ministers turned out to be not very interested in managing contracts…The jury is out on whether a New Zealand-style accountability model is the answer.”

“…Back in the real world, beyond the arcane discussions in Elvish, there are some interesting ideas and bits of good practice to learn from. But no magic bullets – from New Zealand or anywhere else – can conjure up more from much, much less. With apologies to Tolkien, there’s no one public service ring to rule them all.”

http://www.publicfinanceinternational.org/features/2012/07/lessons-from-public-service-reform-down-under/

Halloween marks new anti corruption law in Italy

1 November 2012 

Italy’s “ill wind” is producing change. Expanding corruption, seemingly unaffected by generations of democratic government may now be contained by legislation promoted by the technocrats who comprise the Mario Monti administration. An anti corruption law enacted yesterday establishes a powerful investigative commission to target the €60 billion lost to government each year.

The penalties for corruption are increased and anyone convicted of corruption will be banned from public office. There is anonymity for whistle blowers. Agencies must have active anti corruption plans and their budgets and the cost of public works must be published on their websites. 

Transparency International reports that the law seems to have ”… the elements required to overcome the rampant cronyism and influence peddling in Italian politics.”

The new law establishes

  • An anti-corruption body
  • More accountable agencies with each required to appoint an anti-corruption manager responsible for anti-corruption    plans, and addressing any corruption-related loss of revenue.
  • Data publication obligations, including the agency budget and salaries of senior staff.
  • Anti-corruption training for agency staff.
  • Simplified prosecutions  and increased penalties in line with OECD recommendations.
  • Broader corruption definition that outlaws cronyism and bribery in business.

http://blog.transparency.org/2012/10/30/italy-corruption-vote-new-law-new-start/

Capturing the old spirit of service for the new outcomes focus

31 October 2012

Yesterday, Professor Peter Hughes delivered the final address in the “100 Years Perspective” series which the Institute of Public Administration NZ and the Ministry of Culture and Heritage sponsored to mark the centennial of the enactment of the Public Service Act 1912.  Professor Hughes’ topic was “The Present and the Future”.  He wrapped anecdotes around many of the themes developed previously by John R Martin and Professor Jonathon Boston.

He contrasted the Social Welfare Department that he joined in the 1970s with the Ministry that evolved from the reforms of the 1980s, and looked to imminent legislative changes to facilitate a whole of government focus on delivering outcomes if public services are to be truly effective. 

The picture he painted of the “old Public Service”, classification centric, regimented by departmental policies and constrained by a ubiquitous application of the Public Service Manual probably had less impact than intended as many in the audience served under that “old Public Service”.  Prof Hughes acknowledged as Prof Boston had done previously, that the changes of the 1980s were not necessarily making a better contribution than had been delivered by that unified, apolitical, career based, professional model.

The New Public Management reforms of the late 80s created the capacity to address public and political dissatisfaction with agency performance and to focus on service delivery – although the suggestion was that some departments were challenged in identifying precisely what their outputs were and what their purpose should be.

The attention given over the last 25 years to service delivery, on outputs with insufficient focus on outcomes, has defeated aspirations held for the New Public Management reforms.  Belatedly, Better Public Services commitments were stimulating the essential connection between service delivery and pan sectorial outcomes.

Proposals now before Parliament would legislate a framework to consolidate this outcome focus. Prof Hughes is enthusiastic about the progressive enhancement of government that will result.

 

http://ssc.govt.nz/better-public-services

Nobody in New Zealand knows about APEC anti corruption codes

30 October 2012 

A Transparency International New Zealand (TINZ) survey report published yesterday suggests a complacency among New Zealand companies trading in overseas markets.  Responses also suggest a naivety about dealing in corrupt societies.

The conclusions were drawn from interviews with ten exporters. UMR Research, which conducted the research on behalf of TINZ, reported that there was confusion about what was acceptable, such as gifts or facilitation payments on the one hand, and outright bribes on the other.

TINZ was critical of New Zealand companies for not showing the enthusiasm their British counter parts have for policies and guidelines about corruption, and a commitment to corruption training for staff exposed to dubious foreign business practices.

Interestingly,  neither the TINZ report nor any of the respondents showed any awareness of the APEC Anti Corruption Code of Conduct for Business.  The New Zealand Government committed to this code in 2008.  Of course New Zealand also committed to the APEC Conduct Principles for Public Officials at the same time, and they, too, go unpromoted.

The Anti Corruption Code of Conduct for Business covers all the issues about which TINZ is concerned.  These include;

  • Charitable Contributions
  • Gifts, Hospitality and Expenses
  • Facilitation Payments
  • Political Contributions
  • Monitoring and Review
  • Raising Concerns and Seeking Guidance
  • Training
  • Organisation and Responsibilities

The TINZ anxiety may be better directed to the agencies responsible for giving effect to New Zealand’s international commitments.

www.transparency.org.nz/index.php/resources/cat_view/69-indices-reports-a-submissions/33-new-zealand-reports?utm_source=PR%3A+Exporters%27+Experience&utm_campaign=ExportPR&utm_medium=email

 www.apec.org/Groups/SOM-Steering-Committee-on-Economic-and-Technical-Cooperation/Task-Groups/~/media/Files/Groups/ACT/07_act_codebrochure.ashx

 https://integritytalkingpoints.com/2011/03/31/anti-bribery-measures-in-apec-region/

Restating State Services integrity obligations

29 October 2012 

The State Services Commissioner last week updated guidance for Crown Entities – including Crown Entity companies – on the preparation of Statements of Intent “and any associated expectations”.

The guidance links to related resources.  Hearteningly, in revising the guidance, the Commissioner has not removed references to any resource materials published over the last ten years which explain the integrity expectations on agencies.  The pedigree is untarnished. Standards established under the former Public Service code of conduct and subsumed into the Standards of Integrity and Conduct for the State Services, continue as the underpinning “associated expectations”.  All guidance about those standards appears to have undiminished authority. 

The guidance on acceptance of gifts and hospitality at the bottom of the list below was issued in 2002.  

The guidance on Implementing the Code of Conduct, which has probably now fallen well below the radar in most agencies outlines policies and procedures required of agencies, including  giving effect to the” 6 trust elements”.

The Summary of Findings from the 2010 integrity survey reminds agencies of the need to familiarise staff with processes for reporting serious wrong doing, and the statutory duty – again, probably unrecognised in most agencies – to publish and periodically republish their Protected Disclosures policy.

The guidance of paramount importance relates to political neutrality.  Although explained in various ways in the documents in the following list, the underpinning principle to “keep politics out the job and the job out of politics” is unchanging.

The listed resources are:

Ironically, one of the linked resources is the list of agencies subject to the code of conduct. This should include Schedule 1 of the State Sector Act, listing the departments in the Public Service.  The link however brings up a schedule that omits the Ministry of Business Innovation and Enterprise, and the Minstry of Primary Industries. www.ssc.govt.nz/code-organisations

www.ssc.govt.nz/crown-entities

he linked

New Zealand still among world leaders for doing business

27 October 2012

The World Bank’s annual report on the Ease of Doing Business has again ranked New Zealand in third place, for the fifth consecutive year.    Singapore has kept the top place, followed by Hong Kong.  Some improvement in paying taxes and resolving insolvencies in New Zealand were offset by minor changes in trading across borders and enforcing contracts.

Australia has moved up one place this year and now ranks as the 10th easiest economy in which to do business.

    Starting a Business Dealing with Construction Permits Getting Electricity Registering Property Getting Credit Protecting Investors Paying Taxes Trading Across Borders Enforcing Contracts Resolving Insolvency
Singapore 1 4 2 5 36 12 2 5 1 12 2
Hong Kong SAR, China 2 6 1 4 60 4 3 4 2 10 17
New Zealand 3 1 6 32 2 4 1 21 25 17 13
United States 4 13 17 19 25 4 6 69 22 6 16
Denmark 5 33 8 14 6 23 32 13 4 34 10
Norway 6 43 23 14 7 70 25 19 21 4 3
United Kingdom 7 19 20 62 73 1 10 16 14 21 8
Korea, Rep. 8 24 26 3 75 12 49 30 3 2 14
Georgia 9 7 3 50 1 4 19 33 38 30 81
Australia 10 2 11 36 37 4 70 48 44 15 18

 

www.doingbusiness.org/rankings

www.doingbusiness.org/data/exploreeconomies/new-zealand/

https://integritytalkingpoints.com/?s=Doing+business

Just another hypocrite?

27 October 2012

An example of hypocrisy, China-style, was published this week.  The retiring Chinese Premier Wen Jiabao has amassed personal wealth of US$2.7 billion during his ten years in office. His salary is less than US$ 24,000.  The report by the New York Times has been condemned as a smear by Chinese news agencies.

The Premier has repeatedly championed measures to counter the growth of corruption, delivering a signature speech several times in each of the last few years about the importance of stamping out corruption and the damaging effect on the Communist Party of the abuse of power by officials.

He created an impression that senior Party leaders, committed to ethical reforms, were not involved in the corruption by lesser officials regularly reported by the media.

The Premier is the highest administrative position in the Government and is responsible for organising the ministries, departments, commissions, and agencies that comprise the civil bureaucracy.  The Minister of Supervision – responsible for discipline within the civil service and setting standards on matters like officials’ salaries, business interests, and offshore investments – reports to the Premier.

Controls precluding the family members of officials from acquiring assets seem to have had no application to Wen Jiabao. The New York Times reports that his mother, wife, son, daughter, brother and brother in law have vast business interests in banks, jewellers, tourist resorts, telecom companies and infrastructure projects, and substantial offshore investments.

Wen Jiabao’s condemnation of corrupt practices now seems to have been a con.  He was very popular in China because of his apparently genuine interest in “the people”.  ( I saw that appeal in 2009, when with 17 representatives of APEC member states on an anti corruption working group, we met with him in one of the provincial halls within the Great Hall of the People.)

Yesterday the Party expelled Bo Xilai from Parliament, removing his immunity from prosecution for offences widely reported earlier this year.

Will Wen Jiabao be next?

www.nytimes.com/2012/10/26/business/global/family-of-wen-jiabao-holds-a-hidden-fortune-in-china.html?pagewanted=all&_r=0

www.bbc.co.uk/news/world-asia-china-20091675

www.bbc.co.uk/news/world-asia-china-17673505

http://en.wikipedia.org/wiki/Wen_Jiabao

The spirit of service is being tested in UK

26 October 2012

Developments published this week confirm the British Government’s commitment to reducing the costs of the civil service.  

The Guardian has posted a schedule identifying staff reductions in most of the 118 central government agencies. The civil service has shrunk by 12% since 2010, with 34,621 jobs lost in the last 12 months. 

Restructuring the Border Agency with an 18% downsizing,  removed 8000 positions. “…The worst-hit departments in the last year are the Department for Work and Pensions, with 10.7% cut from 109,440 to 99,960; the Ministry of Defence, with a cut of 10% from 61,750 to 53,370 jobs. Even the Treasury is not immune, down from 1,330 to 1,070, a cut of 17%.”

The Public Service Pension Bill soon to be introduced will reduce the value of retirement benefits for civil servants.  The retirement age will be increased and the basis for the defined benefit pension scheme will change from final salary to career average earnings. Civil servants will have to make larger contributions than at present.

Although the revised superannuation rates are calculated to be “more valuable” than private sector schemes, they will reduce from the current benefit of 23% of the member’s salary at retirement to 15% when the reforms come into effect. Apparently about 85% of public sector employees in the UK are members of defined benefit superannuation schemes, while only 5% of the private sector is in a defined benefit scheme.

In New Zealand there are 13,000 contributing members of the Government Superannuation Fund  (closed to new members for 20 years) which is a defined benefit scheme ( based on the average salary over the last five years of service). There are 44000  members drawing annuities.  Most public servants are Kiwi Saver members with the same benefits as any private sector contributor. 

The 2012 Human Resource Capability survey released by the State Services Commission this week shows FTE staff numbers in the New Zealand public service dropped in the last year by 350  to 43,345 ( 0.6% compared with nearly 10% in Britain). There were 764 public servants made redundant during the year (down from 882 in 2011), with the average redundancy payment of $50,650.

www.guardian.co.uk/news/datablog/2012/oct/24/civil-service-numbers-cuts

www.publicfinance.co.uk/news/2012/10/public-sector-pension-pots-will-be-slashed-by-a-third/

ssc.govt.nz/hrc-survey-2012

www.ssc.govt.nz/sites/all/files/hrc-survey-2012-findings-summary.pdf

Levels of corruption and credit card fraud unrelated?

25 October 2012

Yet another international study has confirmed what seems obvious – in this case that people lose confidence in a credit card if, in using the card, they have been the victim of fraud.

But what may be more surprisingly, the study shows that experience of fraud is not necessarily reflective of the Transparency International Corruption Perceptions Index. 

Although credit card users in high integrity countries like Sweden and the Netherlands are less prone to fraud than in countries ranking further down the Index, the experience of people in Mexico and in the United States was very similar despite TI ranking the United States in 24th place and Mexico at 100th

In Indonesia, also ranked 100th on the CPI, credit card fraud is less than nearly all the other countries in the survey – all of which rank better on the CPI.  The fraud experience in UK (16th on CPI) is remarkably similar to credit card holders in China (75th on CPI).   Similarly, the experience in Singapore (5th on CPI) is not unlike that in South Africa (64th on CPI).

New Zealand was not included among the 17 countries, from which responses from 5000 people were collated.

 

 www.forbes.com/sites/halahtouryalai/2012/10/22/countries-with-the-most-card-fraud-u-s-and-mexico/

http://en.wikipedia.org/wiki/Corruption_Perceptions_Index