Reporting corruption in Papua New Guinea s public financial management system. Amanda H A Watson, PhD Colin Wiltshire

Transcription

1 Reporting corruption in Papua New Guinea s public financial management system Amanda H A Watson, PhD Colin Wiltshire

2 2 Presentation overview 1. PNG s public financial management system 2. Method and data collection 3. Results and key findings 4. Policy implications and further research

3 3 PNG s public financial management system Reporting corruption from within the public financial management system Map of Papua New Guinea PNG is ranked 145 out of 175 countries by Transparency International. World Bank s Worldwide Governance Indicators PNG ranked lowest 15 per cent of countries Very little recent research on how public officials report corruption in PNG

4 Public spending at sub-national levels in PNG Effective utilisation of public expenditure is essential for PNG to achieve its development goals. Recent increases in public spending have put pressure on the performance of financial management systems at each level of government. There are significant weaknesses in PNG s decentralised political, fiscal and administrative arrangements. Governance structures in PNG 22 Provinces 89 Districts 313 LLGs More than 6000 Wards Adapted from World Bank (2013)

5 Increases in provincial and district budgets (B) K 4.0 K 3.5 K 3.0 K 2.5 K 2.0 K 1.5 K 1.0 K 0.5 K Provincial Budget Constituency Development Funds PNG has invested increased revenues into development and recurrent budgets for service delivery at sub-national levels. Constituency Development Funds for Open MPs have remained constant despite broader budget cuts. 5

6 6 Who manages the money? Provincial & District Treasuries The PNG Department of Finance has a central role in expenditure management practices. Department of Finance directly manages of provincial and district treasuries. operate in a diverse range of urban and rural contexts. This structure ensures a consistent approach to budget expenditure practices across PNG. District and provincial treasury staff responsible to the Secretary of Finance. Provincial and district treasuries have been rolled out across PNG over the last 10 years with mixed success.

7 7 Who manages the money? Provincial (and District) Governments Provincial and district treasuries are clients to provincial and local governments. PNG has decentralised the bulk of its service delivery functions to provincial and district administrations. Provincial and district treasuries approve spending and raise cheques National Finance, provincial and district treasury officers have a unique insights into corruption in PNG Well placed to report on corrupt practices taking place in PNG and ideal candidates for conducting this research. Corruption was defined by participants as misappropriation of public funds outside PNG s Public Financial Management Act.

8 Handling public expenditure at Sub National levels in PNG (1) PUBLIC ADMINISTRATION PFM SYSTEM National Departments National Department of Finance Internal Audit X 1 Focus Group Provincial Assemblies Reports to Reports to Provincial Administrations Provincial Treasuries X 1 Focus Group Reports to Reports to District Administrations District Treasuries X 2 Focus Groups

9 Handling public expenditure at Sub National levels in PNG (2) PUBLIC ADMINISTRATION National Department of Treasury Provincial Assemblies Submits budget Approves budget PFM SYSTEM National Department of Finance Warrants issued, cash to operational accounts Provincial Administrations District Administrations Raise claims for spending Approval and issuing cheque Raise claims for spending Approval and issuing cheque Provincial Treasuries District Treasuries Warrants issued, cash to operational accounts

10 Handling public expenditure at Sub National levels in PNG (3) PUBLIC ADMINISTRATION National Department of Treasury PFM SYSTEM National Department of Finance Joint Provincial Planning Budgets Priority Committee Decides on PSIP Projects Provincial Assemblies Provincial Administrations Raise claims for spending Approval and issuing cheque Provincial Treasuries District Development Authority (DDA) Decides on DSIP Projects District Administrations / CEO DDA Raise claims for spending Approval and issuing cheque District Treasuries

11 11 Reporting corruption from within the system In this context, the risks of formally reporting corruption are very significant for public officials. In this changing and sensitive financial and political context, the Phones against Corruption project (PaC) and subsequent research were carried out.

12 12

13 13 Phones against Corruption SMS system: 1. Anonymous. 2. Free. 3. Any handset. 4. Simple-to-use. 5. English and Tok Pisin options.

14 Phones against Corruption SMS questions: 1.Language choice. 2.Location. 3.Date. 4.Financial or non-financial. 5.Description of case. 6.. Feedback provided. 14

15 Phones against Corruption 15

16 Phones against Corruption 16

17 17 User experience research design Three aims of user experience research: 1. determine the effectiveness of the pilot; 2. determine whether or not the service should be opened up to the public; and 3. recommend any changes to the service.

18 18 User experience research design Key research question: What are the experiences of users of the Phones against Corruption project?

19 19 User experience research design Two research methods: 1. a survey conducted by SMS, and 2. a series of group interviews.

20 20 Findings: SMS survey Figure 1: Level of difficulty

21 21 Findings: SMS survey Figure 2: The time it takes to respond to SMS questions

22 22 Findings: SMS survey Figure 3: Willingness to use the SMS service again

23 23 Findings: SMS survey Figure 4: Confidence level regarding action by authorities

24 24 Findings: focus groups Focus groups completed in March 2015: 1. Internal Audit & Compliance Division, 2. Province-based DoF staff members, 3. District-based DoF staff members, and 4. District-based DoF staff members.

25 25 Findings: focus groups Internal Audit & Compliance Division Effectiveness: Effective at gathering information, but need to encourage sending of more specific details.

26 26 Findings: focus groups And specifically, if they can send the name of the particular company, if they make mention of the name of the person or if they specifically name the amount. Or if they could specifically mention the cheque number, the detail, that really helps us.

27 27 Findings: focus groups Internal Audit & Compliance Division Effectiveness: Effective at gathering information, but need to encourage sending of more specific details. Need more resources to investigate cases.

28 28 Findings: focus groups A couple of serious cases have been taken up already. And it also places some challenge on us on the part of the resources that we need to put into it, as we are faced with an additional task on our part.

29 29 Findings: focus groups It will put pressure on the resources that we have in terms of manpower and finance, to really undertake, immediately undertake some of these serious issues that have been SMS-ed through this program.

30 30 Findings: focus groups Internal Audit & Compliance Division Changes to the service: No changes recommended.

31 31 Findings: focus groups Internal Audit & Compliance Division Opening up to the public: Not yet. First, repeated awareness within DoF. Second, extend to other government agencies. Third, extend to the public at a later date.

32 32 Findings: focus groups Looking at the number of SMS coming in, assuming that it s going to go to public now, you just imagine the, the, the inflow of this SMS that will come in and our capacity to assess, you know what I mean?

33 33 Findings: focus groups It should include other agencies and also, on the other side, we should look at the constraints faced by our officers here. If we agree that it should include other agencies and then we see the number of our investigators here, how can they handle this huge number of?

34 34 Findings: focus groups When we extend, we have to have a program or an agency that, that will deal with these other issues.

35 35 Findings: focus groups At the moment let s keep it within finance first and let s see how effective, and then we can roll it out.

36 36 Findings: focus groups Province based staff Limited awareness of the service Generally agreed it was valuable

37 37 Findings: focus groups So with this project around, people will think twice of doing what is not right. So that is why I said it s a good project, good project. So in the long run, we ll cut down on corruption within the department.

38 38 Findings: focus groups Province based staff No changes to the SMS questions recommended But concerns about staff s fear of implications of submitting reports Suggested awareness about how investigations are conducted

39 39 Findings: focus groups Province based staff Opening up to the public: No. Extend to other government agencies: Yes.

40 40 Findings: focus groups District based staff None had heard of the service Suggested more awareness done at district levels

41 41 Findings: focus groups District based staff Opening up to the public: No. Extend to other government agencies: Should be strengthened within DoF before it is extended to other government agencies.

42 42 Findings: focus groups District based staff No changes to the SMS questions recommended All were very grateful for it High levels of corruption and pressure

43 43 Findings: focus groups Mipela i live wantaim, mipela wok wantaim, slip wantaim, dispela em wanpela hevi mipela karim. Mipela kam long wok, mipela laik wokim wok stret, tasol tingting bilong mipela, em hevi stap. Because every day mipela i wok wantaim dispela samting mipela lukim i no stret.

44 44 Findings: focus groups We don t want our identity to come out. 100% if it cannot be shown out to whoever, because it s risky. If we put anything out, you know, it s money, so can it be hidden? Noken tru people know. So many things to be reported.

45 45 Findings: focus groups District based staff Increased funding to district level

46 46 Findings: focus groups I think it came at a good time, where, um, gavman i pumpim planti moni i kam insait long district level, LLG, where we are really right with the people and some of us, we see that the money is not really going to what we should be expecting it to be. So mipela bai ting, how will we go that far, na tokaut long wanem samting?

47 47 Findings: focus groups District based staff can be threatened to process payments by the District Administrator, the District Treasurer, contractors, the MP, the MP s staff and even Assistant Secretaries.

48 48 Findings: focus groups This thing is going to be really helpful to us. We want to report, but they come at our back and threaten us or things like that. We appreciate this.

49 49 Findings: overall Service is working well Users find it easy and quick to use Users have confidence in the service Further promotion within Department of Finance is recommended by participants Expansion to other government agencies needs to be well planned

50 50 Practical implications of the research Trade off between further promotion within Department of Finance (including provincial and district treasuries) against investigation capacity Risk of Department of finance staff losing confidence in reporting corruption if no action is taken. Expansion to other government agencies needs to be carefully planned and targeted at the right levels Political commitment required to adequately resource internal audit officers

51 PUBLIC ADMINISTRATION PFM SYSTEM Internal Audit National Departments National Department of Finance Internal Audit Provincial Assemblies Internal Audit Provincial Administrations Provincial Treasuries District Administrations District Treasuries

52 POLITICAL PRESSURE PUBLIC ADMINISTRATION PFM SYSTEM Minister National Department Secretary National Department of Finance Provincial Assemblies Governor Reports to Provincial Administrator Provincial Treasurer Open MP Reports to District Administrator / CEO DDA District Treasurer

53 53 Practical implications: Investigations Safety risks to investigating officers. Potential safety risks to those that report corruption at their locations. Interactions between national authorities and local police.

54 54 Theoretical implications Typology of the use of mobile phones in government service delivery: 1. as an additional channel; 2. to extend services to others; and 3. to provide new services. Raja et al., 2012, p. 88

55 Policy implications Valuable system for reporting corruption Value of reporting from within the system Integrity of public financial management system Raises questions for how Australia and other donors support anti-corruption efforts? Should this corruption reporting mechanism be expanded? 55

56 56 Further research ideas Documenting processes for handling SMSs Determining resources required by Internal Audit & Compliance Division Further investigating processes at District Treasuries Conducting user experience research on other mobile phone projects in PNG

57 57 Reporting corruption in Papua New Guinea s public financial management system Amanda H A Watson, PhD amanda.watson@anu.edu.au ahawatson@hotmail.com Colin Wiltshire colin.wiltshire@anu.edu.au