Reporting Corruption In Papua New Guinea’s
Reporting corruption in Papua New Guinea’spublic financial management systemAmanda H A Watson, PhDColin Wiltshire
Presentation overview1. PNG’s public financial management system2. Method and data collection3. Results and key findings4. Policy implications and further research2
PNG’s public financial management system Reporting corruption from within thepublic financial management system PNG is ranked 145 out of 175 countriesby Transparency International. World Bank’s Worldwide GovernanceIndicators – PNG ranked lowest 15 percent of countries Very little recent research on howpublic officials report corruption inPNGMap of Papua New Guinea3
Public spending at sub-national levels in PNG Effective utilisation of publicexpenditure is essential for PNGto achieve its development goals. Recent increases in publicspending have put pressure onthe performance of financialmanagement systems at eachlevel of government.Governance structures in PNG22 Provinces89 Districts313 LLGsMore than 6000 Wards There are significant weaknessesin PNG’s decentralised political,fiscal and administrativearrangements.Adapted from World Bank (2013)
Increases in provincial and district budgets (B)K 4.0K 3.5K 3.0K 2.5K 2.0K 1.5K 1.0K 0.5K 0.02005Provincial Budget2014Constituency Development Funds PNG has invested increased revenues into development and recurrent budgetsfor service delivery at sub-national levels. Constituency Development Funds for Open MPs have remained constant despitebroader budget cuts.5
Who manages the money?Provincial & District Treasuries The PNG Department of Finance has a central role in expenditure managementpractices. 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 practicesacross PNG. District and provincial treasury staff responsible to the Secretary of Finance. Provincial and district treasuries have been rolled out across PNG over the last10 years with mixed success.6
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 provincialand district administrations. Provincial and district treasuries approve spending and raise cheques National Finance, provincial and district treasury officers have a unique insightsinto corruption in PNG– Well placed to report on corrupt practices taking place in PNG and ideal candidates forconducting this research. Corruption was defined by participants as misappropriation of public fundsoutside PNG’s Public Financial Management Act.7
Handling public expenditure at Sub National levels in PNG sNationalDepartment ofFinanceInternalAuditX 1 Focus GroupProvincialAssembliesReports toReports toProvincialAdministrationsReports toDistrictAdministrationsProvincialTreasuriesX 1 Focus GroupReports toDistrictTreasuriesX 2 Focus Groups
Handling public expenditure at Sub National levels in PNG (2)PUBLICADMINISTRATIONNationalDepartment ofTreasuryPFMSYSTEMApproves budgetWarrantsissued, cashto operationalaccountsSubmits sNationalDepartment ofFinanceRaise claimsfor spendingProvincialTreasuriesApproval andissuing chequeWarrantsissued, cashto operationalaccountsDistrictAdministrationsRaise claimsfor spendingApproval andissuing chequeDistrictTreasuries
Handling public expenditure at Sub National levels in PNG (3)PUBLICADMINISTRATIONPFMSYSTEMNationalDepartment ofTreasuryNationalDepartment ofFinanceProvincialAssembliesDecides onPSIP ProjectsJoint ProvincialPlanningBudgets ProvincialAdministrationsRaise claimsfor spendingProvincialTreasuriesApproval andissuing chequeDecides onDSIP ProjectsDistrictAdministrations/ CEO DDARaise claimsfor spendingApproval andissuing chequeDistrictTreasuries
Reporting corruption from within the system In this context, the risks offormally reporting corruptionare very significant for publicofficials. In this changing and sensitivefinancial and political context,the Phones against Corruptionproject (PaC) and subsequentresearch were carried out.11
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Phones against CorruptionSMS system:1. Anonymous.2. Free.3. Any handset.4. Simple-to-use.5. English and Tok Pisin options.13
Phones against CorruptionSMS questions:1.Language choice.2.Location.3.Date.4.Financial or non-financial.5.Description of case.6. . Feedback provided.14
Phones against Corruption15
Phones against Corruption16
User experience research designThree aims of user experience research:1. determine the effectiveness of the pilot;2. determine whether or not the service shouldbe opened up to the public; and3. recommend any changes to the service.17
User experience research designKey research question:What are the experiences of users of the‘Phones against Corruption’ project?18
User experience research designTwo research methods:1. a survey conducted by SMS, and2. a series of group interviews.19
Findings: SMS surveyFigure 1: Level of difficulty20
Findings: SMS surveyFigure 2: The time it takes to respond to SMS questions21
Findings: SMS surveyFigure 3: Willingness to use the SMS service again22
Findings: SMS surveyFigure 4: Confidence level regarding action by authorities23
Findings: focus groupsFocus groups completed in March 2015:1. Internal Audit & Compliance Division,2. Province-based DoF staff members,3. District-based DoF staff members, and4. District-based DoF staff members.24
Findings: focus groupsInternal Audit & Compliance DivisionEffectiveness:Effective at gathering information, but need toencourage sending of more specific details.25
Findings: focus groups“And specifically, if they can send the name ofthe particular company, if they make mention ofthe name of the person or if they specificallyname the amount. Or if they could specificallymention the cheque number, the detail, thatreally helps us.”26
Findings: focus groupsInternal Audit & Compliance DivisionEffectiveness:Effective at gathering information, but need toencourage sending of more specific details.Need more resources to investigate cases.27
Findings: focus groups“A couple of serious cases have been taken upalready. And it also places some challenge on uson the part of the resources that we need to putinto it, as we are faced with an additional taskon our part. 28
Findings: focus groups It will put pressure on the resources that wehave in terms of manpower and finance, toreally undertake, immediately undertake someof these serious issues that have been SMS-edthrough this program.”29
Findings: focus groupsInternal Audit & Compliance DivisionChanges to the service:No changes recommended.30
Findings: focus groupsInternal Audit & Compliance DivisionOpening 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.31
Findings: focus groups“Looking at the number of SMS coming in,assuming that it’s going to go to public now, youjust imagine the, the, the inflow of this SMS thatwill come in and our capacity to assess, youknow what I mean?”32
Findings: focus groups“It should include other agencies and also, onthe other side, we should look at the constraintsfaced by our officers here. If we agree that itshould include other agencies and then we seethe number of our investigators here, how canthey handle this huge number of ?”33
Findings: focus groups“When we extend, we have to have a programor an agency that, that will deal with theseother issues.”34
Findings: focus groups“At the moment let’s keep it within finance firstand let’s see how effective, and then we can rollit out.”35
Findings: focus groupsProvince based staff Limited awareness of the service Generally agreed it was valuable36
Findings: focus groups“So with this project around, people will thinktwice of doing what is not right. So that is why Isaid it’s a good project, good project. So in thelong run, we’ll cut down on corruption withinthe department.”37
Findings: focus groupsProvince based staff No changes to the SMS questionsrecommended But concerns about staff’s fear of implicationsof submitting reports Suggested awareness about how investigationsare conducted38
Findings: focus groupsProvince based staffOpening up to the public:No.Extend to other government agencies:Yes.39
Findings: focus groupsDistrict based staff None had heard of the service Suggested more awareness done at districtlevels40
Findings: focus groupsDistrict based staffOpening up to the public:No.Extend to other government agencies:Should be strengthened within DoF before it isextended to other government agencies.41
Findings: focus groupsDistrict based staff No changes to the SMS questionsrecommended All were very grateful for it High levels of corruption and pressure42
Findings: focus groups“Mipela i live wantaim, mipela wok wantaim,slip wantaim, dispela em wanpela hevi mipelakarim. Mipela kam long wok, mipela laik wokimwok stret, tasol tingting bilong mipela, em hevistap. Because every day mipela i wok wantaimdispela samting mipela lukim i no stret.”43
Findings: focus groups“We don’t want our identity to come out. 100%if it cannot be shown out to whoever, becauseit’s risky. If we put anything out, you know, it’smoney, so can it be hidden? Noken tru peopleknow. So many things to be reported.”44
Findings: focus groupsDistrict based staff Increased funding to district level45
Findings: focus groups“I think it came at a good time, where, um,gavman i pumpim planti moni i kam insait longdistrict level, LLG, where we are really right withthe people and some of us, we see that themoney is not really going to what we should beexpecting it to be. So mipela bai ting, how willwe go that far, na tokaut long wanem samting?”46
Findings: focus groupsDistrict based staff can be threatened to processpayments by the District Administrator, theDistrict Treasurer, contractors, the MP, the MP’sstaff and even Assistant Secretaries.47
Findings: focus groups“This thing is going to be really helpful to us. Wewant to report, but they come at our back andthreaten us or things like that. We appreciatethis.”48
Findings: overall Service is working well Users find it easy and quick to use Users have confidence in the service Further promotion within Department ofFinance is recommended by participants Expansion to other government agenciesneeds to be well planned49
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 reportingcorruption if no action is taken. Expansion to other government agencies needs to be carefully plannedand targeted at the right levels Political commitment required to adequately resource internal auditofficers50
DepartmentsNationalDepartment istrationsDistrictTreasuriesInternalAudit
sterNationalDepartmentSecretaryNationalDepartment ofFinanceProvincialAssembliesGovernorReports toProvincialAdministratorProvincialTreasurerOpen MPReports toDistrictAdministrator /CEO DDADistrictTreasurer
Practical implications: Investigations Safety risks to investigating officers. Potential safety risks to those that reportcorruption at their locations. Interactions between national authorities andlocal police.53
Theoretical implicationsTypology of the use of mobile phones ingovernment service delivery:1. as an additional channel;2. to extend services to others; and3. to provide new services.Raja et al., 2012, p. 8854
Policy implications Valuable system for reporting corruption Value of reporting from within the system Integrity of public financial managementsystem Raises questions for how Australia and otherdonors support anti-corruption efforts? Should this corruption reporting mechanismbe expanded?55
Further research ideas Documenting processes for handling SMSs Determining resources required by InternalAudit & Compliance Division Further investigating processes at DistrictTreasuries Conducting user experience research on othermobile phone projects in PNG56
Reporting corruption in Papua New Guinea’spublic financial management systemAmanda H A Watson, lin Wiltshirecolin.wiltshire@anu.edu.au57
Results and key findings 4. . system PNG is ranked 145 out of 175 countries by Transparency International. World anks Worldwide Governance Indicators –PNG ranked lowest 15 per cent of countries Very little recent research on how public officials report corruption in PNG 3 Map of Papua
132 9106120908990001 rendy wira pratama prov. papua 133 9106120304000002 richard samuel noya prov. papua 134 9106110810010002 rifandy berto carolus prov. papua 135 9106122104990002 rinaldy prov. . 211 9102010302000003 abdi ramti nagara prov. papua 212 9102010811990007 adi marura prov. papua 213 91020113
Detection, investigation, prosecution and adjudication of corruption offences and anti-corruption . corruption include the Penal Code, aligned with the requirements of the United Nations Convention Against Corruption, the Anti-Corruption Law, the Whistle-blower Protection Law, .
Constitution of the Independent State of Papua New Guinea. ARRANGEMENT OF SECTIONS. PREAMBLE PART I - INTRODUCTORY. Division 1 - The Nation. 1. The Independent State of Papua New Guinea. 2. The area of Papua New Guinea. 3. National symbols. 4. National Capital District. 5. Provinces. 6. Declaration of Loyalty. 7. Oath of Allegiance.
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