MANAGING CONFLICTS OF INTEREST AT SARS Presentation at the Second Session of the Anti- Corruption Learning Network Port Elizabeth 30 – 31 July 2009
WHAT IS CONFLICT OF INTEREST A conflict between the public duty and private interests of a public official in which the official has private capacity interests which could improperly influence the performance of his / her duties and responsibility.
INTERNAL MECHANISMS TO MANAGE CONFLICTS OF INTEREST AT SARS • Gifts Policy • Declaration of Private Interests Policy
GIFTS POLICY Defining a Gift: • A gift is an item of value that one person presents to another. • A gift may be offered as an expression of gratitude with no obligation to repay in kind or may be given to create a feeling of obligation. • A gift includes, but not limited to money, vouchers, entertainment, hospitality, travel, commodity, property, meals, beverages, sport and entertainment tickets, invites to function, cash and benefits.
GIFTS POLICY In terms of the Gifts Policy, SARS officials may not: • Accept or solicit any gifts. • Accept loans from a taxpayer or organisation. • Procure goods or services for personal use at a discounted rate not offered to the general public. • Derive any additional benefit or discount from vendors who do business with SARS.
GIFTS POLICY In terms of the Gifts Policy, SARS officials may: • Accept coffee, lunch and dinner invitations, on condition that they pay for themselves. • Accept such invitations if they are employed by divisions whose functions include building relationships with international tax and customs administrations or other entities. • Accept invitations to appropriate entertainment events on condition that prior approval is obtained from the Ethics Committee Office. All gifts and invitations, whether accepted or not, must be declared.
DECLARATION OF PRIVATE INTERESTS POLICY Objectives • To establish rules of conduct in respect of conflict of interest. • To minimise the possibility of conflicts arising between private interests and official duties and obligations. • To ensure the primary professional loyalty of all SARS officials.
DECLARATION OF PRIVATE INTERESTS POLICY Examples of possible conflicts of interest situation • Gifts and other forms of benefits. • Affiliations with for-profit and non-profit organisations, other government entities and government owned corporations. • Affiliations with political, trade union or professional organisations.
DECLARATION OF PRIVATE INTERESTS POLICY SARS officials Shall: • Refrain from engaging in any outside matter of financial or interest incompatible with the performance of their duties. • Not realise any personal gain of any form which shall influence the conduct of one’s SARS duties. • Not knowingly use SARS property, funds, information, position or power for personal gain. SARS officials must declare any private interests annually (April – May) or whenever new interests arise.
ADMINISTERING THE DECLARATION OF PRIVATE INTERESTS At SARS, the following steps are followed in administering the Declaration of Private Interests: •If the employee has no private interests, this fact should be declared to the Ethics Committee annually in the declaration of private interests form.
ADMINISTERING THE DECLARATION OF PRIVATE INTERESTS If the employee has private interests, the following steps are followed: •Declare the private interests to the Ethics Office annually. •Ethics Committee reviews declaration to determine if a conflict exists. •Ethics Committee will conduct investigation in an open, fair and honest manner. •Employee may clarify and/or appear before the Ethics Committee.
ADMINISTERING THE DECLARATION OF PRIVATE INTERESTS If the employee has private interests, the following steps are followed: •Resolution of the Conflict is minuted by the Ethics Committee. •Employee is notified of the Ethics Committee decision in writing. •Employee has the right to appeal in writing against the decision within 30 days of the date of the correspondence.
ADMINISTERING THE DECLARATION OF PRIVATE INTERESTS SARS responds to non-conformity in the following ways : •Disciplinary measures will be taken. •Through the suspicious activity report system. •Life style audits may be conducted on you. •Failure to declare is detected by the system
PRACTICAL CONSIDERATIONS TO BE TAKEN INTO ACCOUNT WHEN IMPLEMENTING CONFLICTS OF INTERESTS MEASURES • Manual processing of declaration forms for 15 000 SARS employees is practically impossible. • Electronic processing has been implemented at SARS. • Electronic version is more user friendly and makes sorting of data easier. • Need for Awareness workshops on Declaration of Private Interest. • Disciplinary action for non compliance.
SUCCESES AND CHALLENGES OF THESE MEASURES • Declaration of Private Interests keeps employees on their toes in terms of corruption. • 92% compliance rate by employees. • 100% compliance by EXCO and top management. • Capacity to conduct detailed verification of submissions lacking. • Lack of understanding of what the Declaration entails in some cases. • Incomplete declarations.
CONCLUDING REMARK • Awareness and training of employees regarding declarations of private interest is a continuous process as government continues to hire new staff. • The success of the declaration of private interests process requires the commitment of sufficient human resources.
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